By robert pratten, December 18th, 2009

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

"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: GreatHow 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

"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

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

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

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Posted in audience-building community crowdsourcing marketing movies social media transmedia video

robert pratten Robert Pratten is CEO and Founder of Transmedia Storyteller Ltd, an audience engagement company and provider of Conducttr, an pervasive entertainment platform. He has more than 20 years experience as an international marketing consultant and has established himself as a thought-leader in the field of transmedia storytelling. He is author of the first practical book transmedia storytelling: Getting Started in Transmedia Storytelling: A Practical Guide for Beginners. http://twitter.com/robpratten

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COMMENTS

  • I also agree with this blog and these are quite true words contains by this site. Really I was looking forward to read about it. Thanks for this allocation. :P)

  • I agree with Tony Lee:One point about your comments… As a fan of genre movies, indie or otherwise, I think it’s vital that instead of a plan to “evolve the feature to meet the audience expectations” new film-makers need to think about exceeding audience expectations if they really want a hit film, not something that’s just average entertainment.

  • Hi Rob, Thanks for the article! I think it's brilliant and totally in line with what we will be trying to do with our current transmedia project 'Panzer Chocolate' in Spain, and Horror movie which will include an ARG, motion comic, flash videogame and mobile interactivity. We've already shoot a 1 minute Teaser and are about to launch the website of the project where we expect to draw attention and continue building an audience.... We'll see how it goes... but we also think that for indie filmmakers without previously feature film making experience and contacts this may be the only way to move forward. Thanks again!

  • Hi Rob,

    Thanks for your response. Hope you don't mind me continuing the conversation.

    The Age of Stupid may not have raised all their money online, but they did take money from a crowd of people, with initial investments being as little as $100 from some people. Whether all their money comes from this manner or just some, I don't think it matters - the ultimate goal was achieved with the help of crowdfunding.

    To my mind crowdfunding isn't just about raisng the money to make a film, it has additional value in establishing a crowd of people who have some sense of ownership in the film that will make them willing accomplices in building word of mouth, trying to secure success for the flm. This secondary value can of course be done in ways that don't require the crowd to put money in upfront, but if the crowd are enthusisatic enough to financially back some or all of the production, indie filmmakers would have to be crazy not to capitalise on it.

    I wouldn't be silly enough to suggest that crowdfunding (or funding online) is by any means easy, but working in the Australian industry where there is next to no private funding in the industry, and the government funding has strict criteria to do with "culture" and limited funds, and our local audience frequently complaining that the films that do get made aren't to their interest - means it is smart to consider all options, and one that puts the audience at the forefront by making them willing participants is not a bad idea.

    I haven't yet seen a perfect crowdfunding / crowdsourcing business model, but I am learning from a whole heap of different indie filmmakers who are trying different things, and I don't think it will be long till there will be a clear step by step model that has a good chance of success (providing your content is on target to audience needs).

    I suspect the best model will be a mix of freemium content, where people aren't forced to pay to participate, but have a number of upsell options that raise money through clever merchandise sales, different levels of membership, dvd presales, profit share for premium investment, etc.

    If you look not just at feature films, but also short content, you can see that people are raising a lot of revenue through secondary methods online. Eg. Red Vs Blue (merchandise and optional membership fee) & Beached Whale (merchandise).

    Sure, there are also the projects that tank. Same goes with the traditional film industry. And I'm not talking about indie vs 'middlemen' in terms of crap vs quality. People have all kinds of interests and what I like you might think is crap and vice versa, that is true of both indie and mainstream films. That isn't my arguement at all - it's about who controls the creation of content.

    It's more a case that people like me have been working our arses off for years trying to break into the traditional mould, and it gets to a point when you realise you could spend your whole life doing it and still not get anywhere because the traditional mould is overly heirachial, nepotistic, and I have no control in that situation - it is up to luck if you don't have the right contacts.

    Further, in the Australian industry, even our best filmmakers have a crap shoot trying to raise the money to make a film. Average gestation in Australia is 7 years for a film to get up, not counting the thousands that just don't get made. Some argue we don't have a film "industry" because just about no one earns a living out of it, but rather have to have a second job, whether that is teaching, or moonlighting in TV or advertising, or some completely different job like driving a taxi.

    I doubt anyone would bother crowdfunding if they had a someone (a middle man, an investor, whatever) willing to write our a cheque, but in the absence of that, you've got to try something. And I am heartend by some of the exciting things that I see people doing, as I see these as moving in a good direction, even if the business model has not yet been perfected.

    BTW have you checked out the million dollar home page? If there are enough people out there happy to pay $1 a pixel to raise $1,000,000 for a UK uni student who wants his studies paid for, plus a life of leisure, without having to get a job, there is no reason why there won't be people willing to back a film that aims to meet their needs. People purchase virtual gifts, trade in Second Life, etc, our notion of value is not black and white.

    If someone put together the same dedicated business plan for their film that they would to gain a normal investor's money, but worked in elements of freemium, transmedia, crowdsourcing, etc, and then targeted the most relevant crowd to their film, it is perfectly possible that they will be successful in raising the funds - and be building an audience at the same time that will increase likeihood of boxoffice (or digital distribution) success.

    Or, alternatively, by building groundswell, such as "Panic Attack" and "Paranormal Activity" did, you may then have the Hollywood big boys knocking on your door where before they ignored you.

    The aim is to get your movie made, seen by an audience, and yourself fed - by whatever means necessary.

    Thanks again for your articles, look forward to reading more :)

  • Imagine my surprise when reading the best article I've found on the net about transmedia and crowdfunding and I read this: "Having said that, the best crowdfunding I’ve seen is http://www.thecosmonaut.org/ It’s unique, it’s got kudos and it’s got cool merch – including the “welcome pack” which is really just a donation in disguise." from the writer himself :)

    A breath went through my spine!

    Thank you very much, Robert. Things like this is what keep us going.

    Best,
    Nicolas, director of The Cosmonaut.

    PS: do you mind if we translate your article to post it in our blog? you'll keep all the rights on the spanish text too :)

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