An interview with Jack Teetor, the Principal of Sojourn Media
JACK TEETOR: The digital revolution has been going on for a few years. DVRs and TiVos have changed the audience behavior to the extent that people can scan through commercials, record and watch when they want to watch. This has been a huge element in digital technology. Further, the distribution of TV shows through the internet, iPhones, web sites, etc.
The TV landscape has changed dramatically over the past decade. Think about in the early 80’s with only the major networks. When HBO came on the scene all changed. Now with 200 channels the audience has so many selections and thus the ratings for the big four networks have dwindled due to the success of all the available cable channels.
HORSCAR: From a filmmaker's point of view the digital revolution made it impossible to generate significant incomes from the DVD market. Which means that low-budget movies that usually go straight to DVD are not going to be produced as much. Because the main income nowadays is theatrical distribution. And what is the chance for a low-budget film without A cast and a big director or big studio name to get theatrical release?
The DVD market has been flat. Although Blu-Ray brought some new revenue, the DVD sales are not the bailout they were once for the studios. Studios planned on making back their investment with outstanding DVD sales. But they can no longer expect DVD to bail out their huge investments. The economic time now has changed the business. The high flying good times are all over. Studios are laying people off and getting rid of many deals and from very successful producers. Studios no long wish to pay their overhead and development costs. Thus, many great producers are on their own and must cover their own costs. It’s a sad situation. Studios are cutting talent deals and no longer providing the huge salaries, but demanding more backend participation. It’s all about money and lack of money.
The filmmakers and talents get a percentage share in the revenues. Currently, SAG is negotiating with the studios and demanding a larger percentage of the DVD sales as well as internet downloads for their members.
Low-budget movies will continue to be made regardless of going straight to DVD. Visit the American Film Market held each November in Santa Monica and you will find hundreds of low-budget films bought and sold for DVD, TV & cable distribution to international markets. Many of these low-budget movies will never find distribution, while maybe one “breakout” film will find a theatrical release in North America or may find better success in foreign theatrical markets.
The chance for a low-budget film without “A” cast and director obtaining a theatrical release is slim to none. But there are exceptions. Sex, Lies & Videotape (1989) was made for $1,2 M and was a theatrical success, and reached $36,7 M in worldwide gross.[1] Not “A” talent at the time, but all went on to success.
As budgets move upward generally the film has a better chance for theatrical distribution. Four Weddings and a Funeral (1994) was made for $6 M and got $257,7 M in worldwide gross. [2]
Take the current hit film Slumdog Millionaire. No name talent, but the film caught fire at several festivals and received many awards and Oscar nominations. Fox Searchlight picked it up for distribution. Produced for $15 M, the movie Slumdog Millionaire got 96,2 M in worldwide gross.[3]
As far as I know, the theatrical distribution and particularly international sales are not doing well even nowadays. Your thoughts?
Many films in 2008 generated huge theatrical box office in North America and internationally. In fact, 2008 closed out with a higher overall total theatrical than 2007. Further, we are seeing more success with 3-D films as audiences embrace the technology. In fact, 3-D films will become more prevalent in the marketplace, providing more enthusiasm for filmgoers at the theaters.
Are television channels still buying shows and movies? What about Showtime, Direct TV and HBO?
The advertising TV sales have taken a huge billion dollar hit with the weak economy. Local stations are in severe trouble as ad dollars have declined tremendously. Stations are no longer paying license fees for shows but only barter for advertising time. As for the film studios, money is tight and all studios are looking for financial partners.
For the major networks, the made-for-TV-movies are a thing of the past. The Networks are producing fewer pilots for dramas, comedy and etc. overall due to costs. Many reality shows have become popular over the years that have generated solid ratings and can be produced for much less. Examples are of course “Survivor” and “American Idol.” Also, the TV and Cable Networks continue to buy the rights for successful films.
Both HBO and Showtime acquire many movies for their channels. And both have had much success in their original programming, sports and concert events. DirecTV is a satellite delivery system, but has one channel for original programming that recently launched.
How much money can a filmmaker get from non-theatrical markets? What about online distribution / online television? Or other sources of income such as hotels, airlines, cruise ships, colleges… Maybe the film budgets should be extra low? In that case, what about quality?
Success in theatrical distribution drives the rates and income generated from non-theatrical markets. It all depends on the film and the genre. Blockbusters will do well in these markets while films that bomb in theatrical will generate much less or no interest. As an example, a blockbuster film might make $2M - $2.3M from the airline market alone. Thus, estimating the income is difficult without information on the film, stars, genre, in addition to the box office results.
I don’t know what income is being generated from online distribution now. I think this is a mystery to most people except for a few at the studios.
In terms of appropriate budgets, this again depends on the type of film and script. Studios and independents will make films with a variety of budgets and of course are always looking to shave budgets where they can. There is no magic number of what a film’s budget should be during difficult economic times. Again, it all depends on the film, package, outside financing, stars, locations, special effects, difficult action scenes, etc. It all starts with the script.
In terms of quality, you can have a low budget quality film as much as a big budget film. It starts with a great script, story, director’s vision, talent and the final cut of the film.
References:
1) http://www.the-numbers.com/movies/1989/0SLVT.php
2) http://www.the-numbers.com/movies/1994/04WAF.php
3) http://pro.imdb.com/title/tt1010048/boxoffice
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