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Even If You're On The Right Track...

6/28/2014

4 Comments

 
Picture
Will Rogers said, “Even if you're on the right track, you'll get run over if you just sit there.”

No film or television distribution company can afford to just keep putting one foot in front of the other and hope to survive this chaotic business.  You need to move.  Which direction to jump is another question.

It seems that most film distributors and sales agents are moving in one of four directions.  Some that I know are moving ‘upstream’, that means that they are helping to finance films earlier than ever before.  Some at the script stage.  They are doing this to secure the long term distribution rights to films by producers that they know and trust.  Also, many distributors were once (and still are) movie producers in their own right, and this is a comfortable path for their companies to take.  By supplying production, or finishing funds for films, the distributor secures the distribution rights, gets executive producer credit and often back end participation (if any).  It is a smart move if you can afford it, but it takes deep pockets to do this.

Another large group of distributors are moving ‘downstream’, that is, they are developing channels of distribution to sell films directly to the consumer, be it via Hulu, YouTube, etc. or their own internet portals. These film distributors see the benefit of bypassing the traditional markets to go directly to the end user.  They still attend all the major film markets, mostly to acquire product and cement international relationships, but they are not there to necessarily sell films to the foreign buyers.   Most of these distributors have deep catalogs in specific genres; perhaps horror, sci fi, Christian/family, classic movies/TV, or documentaries.  The problem with the move ‘downstream’ is that revenues have not yet caught up with the costs.  You need to have staying power to build a brand and hold out until the consumers finds your channel(s) and are willing to pay for the convenience.

The third way that I see distributors jumping is (in keeping with the stream theme) to the left or right bank of this business.  On the left bank (Rive Gauche) is the vertical integration model.  In this model the sales agent, turned full service distributor, acquires all rights to the films they sell, both foreign and domestic… or they simply buy some films outright.  The distributor handles everything, including television, HBO/Showtime/Cinemax, RedBox, Amazon, Netflix, foreign sales at the markets, and even DVD.  This is what I call soup to nuts distribution.  All markets, all mediums, all world.  In the vertical integration model the distributor also handles the theatrical release of the movie (if any).  Many distributors have found the financial rewards of doing day and date releases for their films. It is a way to get better exposure for their movies to foreign buyers, and to potentially hit a home run in North America. 

The fourth jump out of the typical sales channel is to the right (Rive Droite). In this move the foreign sales agent or distributor chooses to partner up with other compatible film and television distributors, sales agents, producers, or even their biggest customers, into something of a coalition. In some cases they simply merge.  Many of these companies have downsized as much as they possibly can and some have even given up their fine offices in favor of working out of their homes.  Gone are the big staff and acquisition team, in favor of a more streamlined operation.  These companies have been living off of market fees and meager commissions (sometimes for years) but have now seen the wisdom of creating a partnership with other companies that provide a synergistic service to the industry.  This is taking advantage of the power of long term relationships and segmenting the channels of distribution.  We see this most often in the digital distribution space, where a US company will partner with a European company, or perhaps a Chinese company, to gain market access and create a supply chain that both companies need.  There is often strength in numbers and no independent sales company can be all things to all people.  But, by partnering up with companies of common interest, you can complete a loop that benefits the producers, the buyers and the consumers. 

Will Rogers was right. You can’t just sit down on the tracks and wait for the money train to run you over.  Every company in this industry has to be on the move.  Some are moving upstream, some are moving downstream, some are jumping to the right and some are jumping to the left… and unfortunately, some will be road kill. 

Which way are you moving?   


4 Comments
Anonymous (Sales Agent)
7/2/2014 04:10:27 am

As a Sales Agent, our biggest issue is to find "Commercially Viable Product." DVD is extinct in most all territories in the world, and nothing has come close to filling that void. Most Sales Agents are going in all directions listed above, and far beyond. However, one of the major drivers is a lack of titles being created independently that are sellable. At least if we're involved at the beginning, we're able to influence the shape of a film to be produced that Buyers WANT.

Reply
Steve Jasmine link
7/15/2014 06:59:06 pm

Sales Agent, you might find my work on movie popularity interesting in terms of creating sellable movies. It is discussed in detail on my website. www.stevejasmine.com. Steve.

Reply
Christopher Davis
7/22/2014 05:36:10 am

I might not be such a hot idea to bury DVD/BD just yet; margins be damned you can still purchase CD’s at major retail. The market has a very unique way of letting us know what it is willing to purchase, at what cost and in what form.

What Stephen rightfully points out is the multi-dimensional aspect revenue securitization via various distribution arrangements; association, partnerships, balkanization etc. What may be missed however is the ‘winner’ will be the forward thinking company most willing to adapt to continually shifting market demands and refashion itself accordingly.

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bel âge médias ≈ sarah nean bruce link
7/3/2014 04:25:17 pm

Dr. Stream Love, Or: How I Learned to Stop Worrying and Love the Film Distributor & Sales Agents Biz
…:…:…

I can highly recommend reading (and sharing) this excellent, and succinctly, written article by an associate of mine, Mr Stephen Kerr, President - Business Marketing Consultants, titled: “Even If You’re On The Right Track…”

The complex and seemingly mysterious subject about how film distributors and sales agents work and are moving these days is not only easy to understand, but memorable. Kerr’s metaphor of the (revenue) stream is picture-perfect in my opinion.

I now have a better, and more visual, idea and understanding of how this side of show business has evolved, and is moving in
because of his interpretation, and simplification, of it going in four directions: upstream, downstream, Rive Gauche and Rive Droite.

Exemplary Excerpt:
“Another large group of distributors are moving ‘downstream’, that is, they are developing channels of distribution to sell films directly to the consumer, be it via Hulu, YouTube, etc. or their own internet portals. These film distributors see the benefit of bypassing the traditional markets to go directly to the end user.
…
The problem with the move ‘downstream’ is that revenues have not yet caught up with the costs. You need to have staying power to build a brand and hold out until the consumers finds your channel(s) and are willing to pay for the convenience.” ~ Stephen Kerr, President - Business Marketing Consultants


> Sarah Nean Bruce

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    Author

    Stephen Kerr is president of BMC (Business Marketing Consultants), a subsidiary of Bel Age Medias. 

    He has 30 years experience in the media and entertainment industry. 

    ​See more on his LinkedIn profile.

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