The Falling Value of Film Entertainment

Forty years ago, people who wanted to see a movie on a Friday night had just a few options. They could watch what was on TV, they could go to the local drive-in, or they could go to the local movie theater. The advent of video stores that sold hundreds or thousands of movies on video tape/DVD gave people new alternatives. They could watch this week's new movie at the movie theater, or take in last winter's box office smash in their own home. The technology required to burn tapes and DVDs subsequently turned every home in to a lending library for film and video. The rise of two-hundred-channel cable companies gave us two-hundred channels with something on. Now the best selling studio and independent films are available for download from from sites like video.google.com, www.movielink.com, www.unbox.com and www.itunes.com.

As the rise in movie viewing options has increased, the average box office value of new films has fallen. That's hard to believe isn't it.

Block busters like Lord of the Rings or Harry Potter mask the truth that more movies are being made by more people than ever before and yet the estimated revenue for each film is actually falling. Tens of thousands of feature films and documentaries are now available for sale through a variety of venues. A growing number of producers are making their movies available for free online in the hopes that they will develop a following that will result in "sell-able films" later on.

The falling value of the average movie has dramatic implications on the lives of people who make movies for a living.

Five Survival Strategies

Consider selling your products directly to viewers without going through standard distribution channels. A producer investing tens or hundreds of thousands of dollars on film for distribution on DVD should set aside a quarter or more of that budget for a media campaign that targets the market for the film. If they spend that budget wisely, customers will be looking for the film. Producers who find a solid, reliable international storefront for their films keep the percentage usually allocated to a traditional film distributor. For example, if you post your film on www.CustomFlix.com, your customers will be able to buy your DVD through Amazon (and soon download it through www.UnBox.com). You receive 60%-70% of product sales every month and retain complete control over your content, rather than waiting months or years for distributors to send checks.

Be very careful when choosing more traditional film distributors. Many distributors will evaporate in the months and years to come due to competition from turn-key distribution solutions offered by large, well funded competitors. You do not want distributors to have control over your content when they go under. Work with distributors who deliver cost-effective, fast-launch, flexible multi-national multimedia distribution and marketing solutions for their customers. Make sure there's an escape clause if they go into bankruptcy or fail to provide timely payments or accounting.

Work directly with community theaters, activist groups and social networks to have your films shown. "Four-walling" which used to be considered an amateur filmmaker's trick was demonstrated to be a sound business strategy by Mel Gibson's block buster The Passion of the Christ. That movie was premiered to Christian communities across the United States and their word of mouth drove it to be one of the most successful independent films ever made.

Work with your screenwriters to focus on less expensive, more character-driven films that target under-served market segments. There are tens of thousands of writers trying to write a great tent-pole film. The competition is fierce, the number of producers/studios who can fund that film is small. There's are far fewer writers/producers focusing on writing Christian science fiction or Christian mysteries although the Left Behind books and the DiVinci code indicate those markets exist and spend money.

Find funding through angel investors rather than through more traditional lending and investment mechanisms. Movies are a risky business, and they are growing more risky all the time. Fortunately the cost of making them is also falling fast. Angel investors will often pay to have a movie made as part of an artistic statement or act of community involvement while other investors will be driven more directly for a desire for profit. Producers will assemble groups of angel investors who fund projects, and those investors may elect to make their money available as grants rather than as loans or stock ownership. "Rich Patrons" may well be on their way back and they are certainly worth cultivating.

Evolve to Survive

Some trends are irreversible. Horses gave way to cars. Silent movies gave way to talking pictures. The movie industry is changing radically.

Those who want to make and sell movies for a living must revise their methods accordingly. They must make more films for less money, and the films they make must be better targeted so they are more cost-effective to sell. The good news is, great scripts, exceptional acting talent, strong technical skills and good business sense will be enough to give many producers the great careers they deserve and many viewers will end up with "new classics" to watch.