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Fourth Workshop Report — 16 – 18 September 2014 — Štiřín (Czech Republic)

Module 2 – Distribution – Who and What to Support

Introduction

Responsibility for distribution no longer lies with the distribution companies alone. Today the distribution of a film (VOD platforms, theaters, producers, etc.) involves newcomers on the scene: a different expertise and a specific distribution strategy must be adapted to each film.

Or, in other words:

• Whom to support and what kind of expenses to finance?

1. The Nordisk Film & TV Fund (NFTF) new initiatives

Please see also Petri Kempinnen’s general presentation of the Nordisk Film & TV Fund (PDF)

In 2013, an extensive survey among distributors of all sizes, film funds and ministers was carried out. The objective was to discuss the distribution of Nordic films on different platforms. Based on that survey, in 2014 the NFTF set upfour new distribution initiatives in order to:

• boost the number of choices available to our audience;
• make Nordic films available all the time, not only during the short period of a window.
• reach the under-25 audience

The four new distribution initiatives (2014)

Digital distribution support

• Aimed at improving circulation by reaching audiences through digital platforms
• Available for distributors showing Nordic films on VOD platforms
• Covering the promotion and marketing costs of the platform but not the producer.
• Ensures an addition or alternative to traditional distribution by TV, Cinema, VOD, mobile phones, etc.
• Annual support amount: 250 000 €

Support for recruited audience screening

• Meant for test screenings to assess market potential of non-national Nordic films.
• It covers the cost of screening and subtitling
• Single maximum support: 4,900 €

Nordic Film Marketing

• The third scheme came out of the extensive discussions with distributors who wished to make more ambitious marketing plans, but did not have enough expertise.
• The grant covers the cost of hiring or developing marketing specialists working exclusively on the theatrical and/or VOD release of up to three Nordic films. The grant covers the salary of a specialist hired for a period of 8 to 9 months
• The grant is a complement to single- and slate-project support
• The focus is mainly on social media and young audiences
• Annual amount comes to 115 000 € and is non-recoupable

Nordic film promotion for exhibitors

• We decided to tour the Nordic countries to present a showreel of upcoming titles that will be ready in the upcoming 6-month period, and the distribution support schemes that the fund offers.
• The trade conventions of the distributors/exhibitors will take place in four Nordic cities: Malmo (SE), Joensuu (FI), Oslo (NO) and Copenhagen (DK).

2. Case studies of projects allocated Digital Distribution Support

Case study # 1 / TriArt (Sweden) – www.triart.se

• TriArt is a medium-sized distribution company with experience primarily in cinema releases. As both distributor and platform, it is widely known in Sweden. They also invest in domestic Swedish films by supplying MGs, and have plans to expand to other Nordic countries. However, they do not own any cinemas.
• Their online platform TriArt.se combines international and Nordic titles for which TriArt holds the VOD rights. In the summer 2014, they decided to do a pilot project with four Nordic titles. These they released on VOD on May 31, 2014. They partnered with two major newspapers from two Swedish cities to promote TriArt.se through their website and print editions.
• Those titles are:
  • The Finish film “Concrete Nights” by Pirjo Honkasalo.
    The film was released in cinemas two months before its VOD release on TriArt.se. As one of the very few Finnish films ever released in Sweden it got good reviews, but only 5000 admissions in cinemas. The VOD release included related interviews, reviews and other complementary material. On VOD, the film scored the same as in cinemas, but did not do as well as expected.
  • Three other titles were from 2012 and 2013: “All that Matters is Past” by Sara Johnsen was released on VOD a week after its theatrical release, “Sex, Drugs & Taxation” by Christopher Boe and “A Hijacking” by Tobias Lindholm were released directly on VOD. They also had smaller audiences than expected. In Sweden, similar films usually attract around 5000 viewers, but these films had around 1000 to 1500 rentals. The price of a rental was approximately 4 Euros for a 48-hour access. However, TriArt has recently teamed up with one telecom operator, and the new campaign with new Nordic titles is expected to start in November .

Case Study #2 / Greenlight (Iceland)

• Iceland is a small territory of only 350,000 people. Top VOD results are about ten thousand rentals, but the average number of rentals is one to two thousand. The top cinema result is 50,000 admissions, but already 10,000 is considered a success. In addition, Icelandic people often (almost four times a year) go to the cinemas.
• Greenlight is an art-house distributor with a lineup of Nordic films. It is owned by an exhibitor (cinema network), which makes it much easier for them to experiment with the releases. They shared the same challenges with TriArt when it comes to obtaining the rights from some of the bigger distributors, but the results are much more convincing.
• Greenlight did Day-and-Date release:
  • “The Keeper of Lost Causes” by Nikolaj Arcel (cinema + VOD) and got 3,500 rentals from VOD and the same number of admissions in cinemas.
  • “Nymphomaniac,” another successful example of Day-and-Date release by Lars von Trier. It got around 5000 admissions in cinemas, which is a good number considering the genre and theme of the film and the fact that in much bigger markets, like Sweden and Finland, it got only 10,000 admissions. In Iceland it also scored 4000 rentals on VOD.
  • “Pioneer”, “Nordwest” and “White Snow” are other titles using the same strategy but that did not work as well: they only got up to 500 rentals

3. Conclusions

• Distributors have been satisfied so far, feeling that new distribution schemes have brought about a crucial change in our fund. The audience and the press responded well also, but cinema owners consider themselves damaged by the new schemes.
• Both case studies are our first projects and first results. In both Iceland and Sweden, it was the first time platforms launched marketing campaigns and partnered with media and audience to better market the Nordic films. We all learned something from these first trials. We are expecting new applications from Denmark, Norway and Finland.
• The markets in Nordic countries are very different and that needs to be respected.
• Distributors almost never consider DVD releases, because DVD is almost dead in the Nordic countries, except for Sweden (in Norway it is almost non-existent). VOD is cheaper. DVD releases cost more, and the distributor has to invest more in making them.
• Revenues are decreasing with transitions to new platforms. The production side is now in trouble because distributors cannot invest as much money as before. TV stations are also getting more hesitant to invest in film since the emergence of VOD. To us as a fund, this new situation poses a big challenge ahead.

Outcome of group discussions

1. Increasing audience through more regional/national collaboration

Challenges

• In most of the European regions, in spite of a common cultural and linguistic background and collaboration within the film business, films fail to reach their audiences. Some examples:
  • Dutch films never cross the border to Belgium, and vice versa, although remakes of each other’s films show excellent results.
  • It is easier for a Norwegian film to get distribution in Germany than in Sweden
  • There is a recent example of the Danish live-action, superhero children’s film that worked even in the US, but that the Swedish distributor in charge of all Nordic territories did not want to release in cinemas

Actions that could be taken by the funds:

• Funds must be more proactive in communication with both national and regional distributors and try to set regional rather than only national goals. In this context the innovative NFTVF distribution scheme is groundbreaking.
• Extend the existing multilateral treaties to distribution funding schemes (like the one between German-speaking countries) in order to open up borders and define collaboration with neighboring countries

• Inspire a regional (and also international) collaboration in the context of driving the industry towards new platforms.
• Promote films abroad as regional rather than only national films

Regarding the Producers

• Producers can partly take responsibility for distribution. They should be encouraged to find the audience for their films by themselves, already during the development phase of a project.
• Producers should be allowed to apply for digital distribution.
• Producers of niche films can become full-time distributors. They can hire experts who help them bring the film to the audience for a one-time fee and without selling rights.
• Funds should empower producers by granting more money to distributors, on the condition that they ensure a 10-15% corridor to the producer, in addition to the normal share.
• Producers should have more power in negotiating with global platforms like Netflix and iTunes.

Regarding the Distributors

• They should be less conservative and not strictly bound to theatrical releases and the distribution of blockbusters. There are examples of progressive distributors in Europe, like Magnolia (Germany).
• Distributors with a track record and with big and interesting catalogues could be empowered to make better deals with powerful global platforms. They could condition the rights for a big film by taking rights for ten niche films, for example.

2. The role of Platforms within the distribution scheme

Challenges

• Global platforms like Netflix do not fit the standard revenue models. They offer fees, like TV stations, for making the content available for a certain period. But they pay less than a TV channel. So producers prefer to sell the rights to a TV station rather than to Netflix. Platforms can try to pay more than TV stations.
• Developing too many platforms in Europe threatens to further fragmentize the European market. Meta searching engines like Flimmit exist, but they are still nascent and incomplete, with an insufficient number of titles. Very often, they fail to list a film in which you are interested or that you wish to access.
• Platforms do not send back revenues to the industry. iTunes, for example, channels the money out of the region, unless they are forced otherwise. Integrating national providers into the film business may be a solution to this challenge.
• Funds do not give money to support new and small platforms. They remain completely dependent on the good will of distributors who dictate the conditions

Actions that could be taken by the funds:

• National laws, European Communication and other acts strictly regulate the funding policies of national film funds. It takes two years for a public fund to make a change within a support scheme. It is urgent to find a way to respond faster and act more radically. The case of the NFTVF can set a good example.
• Distribution support needs changes. Such support is often automatic, which makes the funds consider the films' box office over their quality. If a film does not work at all in the cinemas, it does not get any funding and vice versa.
• The funds invest in the production of numerous films, but only few of them turn out to be for a wider audience and cinema screens. Their audience may be somewhere else and can be targeted through the release on another platform. Should the funds be the ones that propose and choose the release model? Should the level of distribution supports be proportionate to the individually tailored film distribution strategy?
• To access distribution support, funds could require distribution companies to show a detailed business plan where they do not rely solely on public subsidies.
• Funds should introduce separate schemes for funding platforms, to open up the distribution support schemes designed solely for distributors.
• There should be more national responsibility for formatting and distributing the local content in order to fit the new media. International/global platforms like Netflix have little room for national content. It is not only an expense-related problem but a real challenge for funds.
• National funds could follow the new distribution schemes of Creative Europe, whereby distributors can get support for a slate of films on VOD platforms. At least thirty films from five different territories are required.
• The question remains: what platform(s) to support? Only established platforms? New ones? Platforms that in the past worked as distributors? The ones with a good track record that already profiled themselves as stable, active players?

Promotion, Distribution and Success Evaluation

• Module 1 – The Role of Public Funds in Promotion
• Module 2 – Distribution – Who and What to Support
• Module 3 – Vod Platforms as Potential Friends of the EU Cinema
• Module 4 – Release Windows
• Module 5 – Finding and Addressing Audiences
• Module 6 – How to Evaluate Success

• List of Participants (PDF)
• MEDICI Fourth Workshop Full Report (PDF)

Illustrations by Mišo Duha

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