I’ve been working with two entertainment properties and a media start-up the past couple of months and I wanted to share the business models I developed to explain where we’re heading.

Here’s what we already know:  pulling in an audience is tough but pulling in finance is tougher.

The Old Days

In the “old days” – as shown in Figure 1 – raising finance was what you did first. You needed that money to make the movie and then you’d sell the movie to a distributor whose job it was to sell it to the audience. Hell, you might even get presales in which case you’d killed two birds with one stone.

The important point from this is that as the filmmaker you only had to convince a limited number of people (investors) that you had a movie worth making (because it would make money). You didn’t have to convince them it was worth watching.

One reason you didn’t have to prove you had an audience waiting to see your movie was because it couldn’t be proven. Instead, one might use (often bogus) comparisons with other movies and of course, whenever possible, outliers like The Blair Witch Project or Fahrenheit 911 or Sideways etc.

When the finished movie failed to find an audience it was the distributor’s fault. They didn’t know how to position the movie correctly. They didn’t spend enough money on P&A. The box art was crap.

Figure 1

"Old" Filmmaking Model

Having worked with our distributors in some markets and selling directly at some horror conventions, it’s very sobering to get a firsthand experience of audience expectations.

Me: It’s about love and sacrifice and how you don’t notice you’re onto something good until it’s gone.

Horror fan: Great. How much T&A is there?

The New Model

When MySpace, Facebook, YouTube etc. arrived it became possible to raise awareness of the movie and start building an audience before the movie was released. But still it felt like something peripheral to the marketing of the movie. The audience building was an industry-side activity that you could take to the distributor with your one-sheet and your reviews: look we have several thousand fans. Most of whom in all likelihood were other independents flogging a movie or a book.

Today, most filmmakers – maybe not Culture Hacker readers – but most filmmakers still have the mindset towards social media that it’s a new spam tool. Look, now I can pester people to be my “fan” and I can get them to pester their friends to be my “fan”. Please Digg me up. Please Stumble on me. It’s the worst kind of networking: “please help me” they bleat.

Worst still are the crowdfunders: “please give me money”.  I’m not against audiences paying upfront – as with the Kickstarter model – so it’s not the principle, it’s typically execution I have a problem with. And I totally believe in the power of social media but I don’t like it when it’s so often used in an unproductive, disappointing way.

So enter the new model of filmmaking as shown in Figure 2:

• there’s a genuine affection… nay, anticipation… between the audience and the movie
• the affection is leveraged to pre-sell to the audience while still raising finance in the traditional way
• when the movie is available for viewing, it might be that only a subset of the audience will pay for it. So they’ll be simultaneous free exhibition and sales.

At this time it’s hard to believe that serious money is going to be raised to finance a movie through crowdsourcing. Some money? Maybe. Millions? I doubt it. And so for expensive feature films there’s still a place for large-ticket or savvy investors.  Please forget about Obama’s fundraising blah blah blah. It’s an outlier. And where’s his socially networked audience when he needs them to fight for healthcare? They’ve gone missing. Maybe Obama’s massive email list isn’t really his personal fan base? Maybe the people on that email database were fans of his first movie but don’t like his second?

What this says as to us as filmmakers is that we’re going to be only as good as our next movie. Don’t expect your 1000 mythical spending fans to follow you from movie to movie regardless of what you propose to make.

Figure 2

"New" Filmmaking Model

My point is that independents are going to have to start audience building early and prove that there’s an appetite for their movie. And so this brings me to my final model.

The Transmedia Model

Raising awareness and audience building is tough. It’s tough enough when you have a finished movie but try doing it for a movie that’s yet to be made.

And that’s why I think we’ll move to a transmedia model for filmmaking in which the filmmaker uses his own money to make some (low-cost) content to build an audience ahead of doing anything else.

There’s long been a school of thought that says to get finance for your feature you should shoot the trailer or shoot a short film based on the feature. I know this can work but I’ve never been a fan of this approach if only because I know finance is most often raised without it. Amazingly though this week, as I write, this short film Panic Attack secured a movie deal.

What transmedia storytelling offers however is not the  Cinderella story of “big investor swoops to finance movie” but a genuine, low-cost, grass-roots audience building.

Right now, (online) comic books seem to be the order of the day – offering an excellent way to engage audiences in the story and show some visual flare or at worst nice eye candy to grab attention. But there’s lots of untapped potential for simple social games utilizing Twitter and social networks without the need for coding:  we just don’t have enough reference cases to illustrate all the possibilities yet.

A small word of warning: the content has to have value. It can’t be a trailer or marketing fluff – you have to produce the real McCoy if you’re going to capture audiences.

Transmedia Filmmaking Business Model

In the transmedia filmmaking model, the financing, exhibition and fundraising work together in tandem with the potential for the feature film to become self-funding. Remember that it’s not all for free! Free is your loss-leader to generate the money. Even if it’s “real content” you might still effectively look at it as a marketing cost – it can help to position it in this way to investors. And note that what’s free and what’s paid will be in flux – maybe changing over time and from media to media.

So in the ideal scenario the filmmaker bootstraps the movie with the low-cost media, the website, presumably some merchandise but then it’s up to the audience to decide what happens next.  The filmmaker will use a basket of financing initiatives: free, pre-paid, paid, paid+, investment and sponsorship (including brand integration/product placement) to finance the movie.  [Paid+ is where buyers can opt to pay more than the base price – usually via a drop-down menu of price points.]

This model has several implications:

• If you do it right they’ll be demand for more content… which maybe you can’t afford to make in the early days. Or at least can’t afford to make alone. And that’s why collaboration of all kinds is important to the indie – with audiences and with other filmmakers.  Collaboration platforms like Wreakamovie are going to save the indie.
• Sponsorship in the form of cash (rather than products for free) from brands won’t solely go to properties with big audiences. If your story reaches the audiences that other marketing finds hard to reach then that’s going to work too. The one significant problem I can see is that few brands want to be associated with edgy content… unless it’s “edgy” in the Green Day plastic-punk, manufactured sense rather than the raw, authentic Poison Girls/Flux of Pink Indians edgy. Counterbalancing this is fans who may appreciate that you’ve rejected the brands… maybe
• Filmmakers are going to become familiar with audience needs and they’ll learn how to captivate them. It won’t be anyone else’s fault that you don’t have an audience. There’s no opportunity to finish the movie and then throw it over the wall to someone else to find the audience for it
• Free media is a feeler gauge: collect comments, listen to feedback, evolve the feature to meet the audience expectations
• It’s going to be a long commitment to the audience so be sure you pick a story you really want to tell.  Indies that follow this transmedia model will be offering an evolving service rather than a one-off product and that means audiences become customers that need to be listened to, responded to, cared for and managed
• If you perfect this evolving transmedia ecosystem you may ask yourself if you still want to make a feature after all.

A final sobering thought: I know we’d all like to believe that story is king but audiences will only discover the story if you hook them in. Don’t expect anyone to delve deeply into your storyworld looking for brilliance. You have to provide “satellite media” that orbits the core: it’s easy to digest and looks cool or fun. Celebrity cast or crew and genre are going to get attention and convey credibility – just as they always have.

I’ve illustrated this in the figure below where I’ve taken the sales funnel model and used it to illustrate how you want to pull in audiences, turning casual interest to hardcore repeat purchases.

Matching Content to Audience Commitment

To summarize then, filmmakers will move to transmedia storytelling because it’s going to be the way you build audiences. And building an audience will unlock the financing – either from fans, sponsors or investors. But it’s going to demand new skills.

Rob