There is a major consolidation of film and television distribution taking place – being brought on by the loss of disk revenue, challenges of digital distribution, and the growing problem of collecting money owed from customers. Let’s face it, foreign distribution is not what it once was; there are new players, new technologies and new financial hurdles that every film &TV distributor has to be concerned about. Even if you have good films/shows, you're probably not getting the sales out of them that you once enjoyed. Not to put too fine a point on it, there are just too many foreign sales organizations chasing too few good films. And, too few foreign buyers that actually pay their bills on time. You go to MIP, you go to AFM, you go to EFM, and what do you have to show for it?
Paper and promises.
If you ask the other foreign sales agents... they will put on a brave face and tell you that they are doing just great, and point out the one or two films that they are actually getting decent MG's on. But at its core they know that the market is rotten. Whole catalogs of past films are going unsold in major territories and too few company owners are looking at the underlying reasons.
It all comes down to the law of supply and demand. Demand has fallen off in almost every major foreign (and domestic) territory, while the supply of low budget flops and unscripted pabulum just keeps coming. So, what happens when supply (of even bad entertainment) does not abate, and demand falls through the floor? Prices evaporate and companies crumble, that’s what. It's happening, right now, all over the industry, and all over the world.
Those companies that have the financial resources should be looking to buy up their competitors, and grow their companies in the process. The entire industry would benefit from shrinking the some 200 foreign sales companies down to less than 100. Those surviving companies would have better market reach, better film catalogs (by dumping the junk) and more power with the film buyers.
Your firm may have had an excellent EFM, and I hope that you did, but that does not change the fundamental weakness in the current film distribution marketplace. We saw it last year at MIP; we saw it at AFM; we saw it at NATPE; and we just saw it again at EFM. Consolidation is the only solution to a chaotic marketplace. We need fewer, stronger, better financed distributors, able to purchase quality films, and let the flotsam and jetsam sink to the bottom, where they belong.
There is no industry more populated with wide eyed optimists than the entertainment industry. We are a hit driven business and we can always convince ourselves that the next movie, the next documentary or the next television serial will be the one that makes everything alright. Is it getting harder and harder to believe that old yarn?
Have we learned nothing from what happened in the music industry and more recently the book industry? Those companies that acted early, with dispatch, have survived; while hundreds of their slow reacting competitors have disappeared. Both of those industries have gone through a major upheaval that the film industry is just now waking up to. Filmed entertainment is a commodity, just like every other consumer good. It obeys the laws of supply and demand slavishly, and the companies that are smart and are aggressively doing something about their situation are going to be the winners.
There is no "business as usual" in the film industry anymore. The game has fundamentally changed and the players will soon be dwindling down to the few. . It's not about getting by in 2014, it's about still being in business in 2016. Ask yourself, with honesty and clarity, if your company has the staying power, and is taking the necessary steps to survive the challenges that are wracking havoc in the film industry
If the answer to this question is "no" or "I'm not sure", let’s get together and see what we can do about that.
Stephen J. Kerr
President
Business Marketing Consultants
Paper and promises.
If you ask the other foreign sales agents... they will put on a brave face and tell you that they are doing just great, and point out the one or two films that they are actually getting decent MG's on. But at its core they know that the market is rotten. Whole catalogs of past films are going unsold in major territories and too few company owners are looking at the underlying reasons.
It all comes down to the law of supply and demand. Demand has fallen off in almost every major foreign (and domestic) territory, while the supply of low budget flops and unscripted pabulum just keeps coming. So, what happens when supply (of even bad entertainment) does not abate, and demand falls through the floor? Prices evaporate and companies crumble, that’s what. It's happening, right now, all over the industry, and all over the world.
Those companies that have the financial resources should be looking to buy up their competitors, and grow their companies in the process. The entire industry would benefit from shrinking the some 200 foreign sales companies down to less than 100. Those surviving companies would have better market reach, better film catalogs (by dumping the junk) and more power with the film buyers.
Your firm may have had an excellent EFM, and I hope that you did, but that does not change the fundamental weakness in the current film distribution marketplace. We saw it last year at MIP; we saw it at AFM; we saw it at NATPE; and we just saw it again at EFM. Consolidation is the only solution to a chaotic marketplace. We need fewer, stronger, better financed distributors, able to purchase quality films, and let the flotsam and jetsam sink to the bottom, where they belong.
There is no industry more populated with wide eyed optimists than the entertainment industry. We are a hit driven business and we can always convince ourselves that the next movie, the next documentary or the next television serial will be the one that makes everything alright. Is it getting harder and harder to believe that old yarn?
Have we learned nothing from what happened in the music industry and more recently the book industry? Those companies that acted early, with dispatch, have survived; while hundreds of their slow reacting competitors have disappeared. Both of those industries have gone through a major upheaval that the film industry is just now waking up to. Filmed entertainment is a commodity, just like every other consumer good. It obeys the laws of supply and demand slavishly, and the companies that are smart and are aggressively doing something about their situation are going to be the winners.
There is no "business as usual" in the film industry anymore. The game has fundamentally changed and the players will soon be dwindling down to the few. . It's not about getting by in 2014, it's about still being in business in 2016. Ask yourself, with honesty and clarity, if your company has the staying power, and is taking the necessary steps to survive the challenges that are wracking havoc in the film industry
If the answer to this question is "no" or "I'm not sure", let’s get together and see what we can do about that.
Stephen J. Kerr
President
Business Marketing Consultants
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