Monthly Archives: May 2011

Guest post by Lila Yomtoob: The Added Value of Blogging

Posted on by Jon Reiss

The Added Value of Blogging – by Lila Yomtoob

Lila contacted me via the web – introducing herself and I asked if she would like to write a blog post – and she offered to write a post  about:  blog posting! Not only the importance of it – but how to do it effectively.   Thanks Lila!

Lila Yomtoob is a producer specializing in marketing and distribution. She has 12 years of experience in different parts of the industry, including directing, editing, teaching, curating, and consulting. She has been a member of the Academy of Television Arts and Science as a result of her Emmy Award, and was a card-carrying member of the Motion Picture Editors Guild until she went rogue. You can read more about her at www.yomtoob.com and contact her at lila@yomtoob.com.

Blogging is not dead, and should not die.

No one reading this is a stranger to the multitude of ways to get the word out about a project. Recently, I’ve seen articles suggesting that blogging is dead and that Facebook and/or Twitter is sufficient. In this article I will make a case for blogging, recommend some ways to go about it, and present a few case studies.

Blogging is a great way to root your project in a community, create a tone for your project that extends beyond the actual film, and can even attract press.  A blog allows you to create original long form content that lives on your website, as well as aggregate news about topics surrounding your film, and make announcements about the status of your project. Having a blog that is embedded into your website (via WordPress, Tumblr, or Blogger) allows people who visit your films website to find out more about what the project is about, without having to leave the site. It sets a personal tone, one that may allow a visitor to get just a little bit more excited about your project.

Foreclosure (Narrative, psychological horror)

I co-produced “Foreclosure” through development and pre-production, and I insisted we start a blog early on. The director did not want to spill the beans about the themes of the film, which may be seen as controversial, so we created parameters on what we would write about. As a result, our blog was about the art of horror, including quotes from different filmmakers on filmmaking, reviews of esoteric films, and artistic and intellectual items that influenced the filmmaker. We rarely discussed the actual film. This gave a visitor “a peak into the director’s mind” and, unbeknownst to us, we created a compendium of intelligent horror content.

Once we had around ten entries, we posted a short and simple trailer and sent press releases about the film to all of the horror blogs and websites we could find. We were thrilled and very surprised by the response. The director was interviewed for a few of the larger horror sites, and we began relationships with film writers who continued to write about “Foreclosure” as it progressed. We were still in development – hadn’t even set a shoot date, and already we had press.  The writers often commented on the content of the blog, hinting to me that it left a positive impression on visitors.

Subsequently, “Foreclosure” attracted Michael Imperioli (“Soprano’s”) to star, and a top sales agent before production began. It would be silly to say that this was because of the blog, but the blog was clearly one step in the right direction.

The Bang Bang Club (Narrative Feature, based on a true story)

I recently visited the website for The Bang Bang Club, a new narrative film based on real events about a group of journalists in South Africa during apartheid. The trailer and story were compelling, but I was on the fence about the film. I noticed they had a blog, and so I clicked on it. There were stories of journalists covering wars around the world now being detained, recovering from injuries, etc, and the films’ timeliness and urgency hit home. It gave me a frame of reference, and made me want to see the film just a little bit more.

Hidden Battles – feature documentary

I started working on “Hidden Battles” when the film was finished, and we were working on a self-distribution strategy. For this blog, we had to be very careful, because of the subject matter of the film. “Hidden Battles” follows five soldiers as they understand their combat experience. The film stays away from making any judgments, and is consciously apolitical, and the director wanted to make sure not to politicize the film in anyway. So we created parameters: the mission of “Hidden Battles” was to educate people on the mental health issues facing veterans. We were only going to be supportive and caring. Largely, the blog reports on organizations that help veterans, new things the government is doing to help, and statistical reports on the status of mental health amongst soldiers and vets. We set up Google alerts with keywords like “veteran,” “PTSD,” “military”, which made it easy to find stories to write on. This also allowed us to find organizations to forge partnerships with, who have subsequently helped publicize the film.

We also share news about the films progress on our blog. Most content is also shared on Facebook and Twitter as well. A distributor approached us and when I asked him how he heard about the film he said, “Twitter.”

Fresh – feature documentary

I spoke with Ana Joanes, director of “Fresh,” a documentary about food production.   After a few years of successful grass roots self-distribution, and a limited theatrical release, she is now concentrating on creating original content for their blog. For years they have aggregated news relevant to their community through their blog, Facebook and Twitter, but now they want to go a step further and become a resource to the community they’ve created. In essence, they are planning to extend the life of the project through the blog. I asked Ana, if they set parameters for what they blog about, and she said no – they just go with their gut. They have posted stories that have gotten bad reactions, but she doesn’t find it to be problematic.

A few tips for getting started

• If you don’t have a clue about how to start a blog, check out mashable.com, they have lots of  “how to” articles that might help you get started. Or enlist/hire a web savvy person to set it up and explain it to you.

• If you don’t know what to blog about, imagine yourself as a potential viewer of your film. What would you want to hear about? OR take a chance and write about what you want to write about! Until you are ready to create original content you can start by reposting relevant news stories and comment on them. Set up Google Alerts, or start an RSS reader to aggregate stories from reliable sources to get ideas.

• Cross post your content on your other social networking platforms. Your blogging platform may have an option to do this automatically, but I find that it’s often problematic. Take the 5 minutes to do it manually, write a short description and add a link back to your blog.

• The most difficult part of this might be setting aside time to do it, especially if you don’t fashion yourself a writer. Independent film involves a lot of juggling of time and resources, and blogging may easily be the thing that falls off the to do list. Fair enough. This is why a lot of filmmakers hire someone (or have an intern) to work 10-12 hours a week on their social networking. “Fresh” had a full time person working on their social networking, which may account for their 4000 grassroots screenings. Just keep that in mind when you decide not to do it.

I don’t have any metrics to back up my case studies, because I don’t believe that the number of people that sees your site amounts to success. It’s about getting the right people to see your site and your film. And sometimes this takes a long time. Be patient. Do what you can do. Good luck.

Guest Post by Jon Fougner: Cinema Profitability Part 5

Posted on by Jon Reiss

This is Part 5 of Jon Fougner’s guest series on Cinema Profitablility – today he continues the discussion of marketing as well as margins.

Marketing Continued:

Once the site is in good shape, let’s get people to it. Today, a user may be unlikely to find the website in the first place, since none of the Big 3 has successfully SEO’ed its site for current releases (e.g, searching for “Wolfman showtimes” on Google). One side benefit of the affiliate program described above will be improved search rankings for this common and valuable query type, since affiliates will be linking to the site. Besides common sense, the reason for optimism that each of the Big 3 should be able to get above-the-fold on Page 1 of search results is that the bar has been set low; here’s the above-the-fold part of the Google SERP for “avatar tickets” from a San Francisco area IP address on 1/17/2010:

In the organic results above, Movietickets.com and the Big 3 are MIA, and Fandango is getting beaten by 2 less relevant sites. In addition to such “universal organic” SEO, the Big 3′s sites should optimize for the increasing array of data type-specific search results modules, most notably, showtimes and local.

Google’s showtimes module exemplifies the importance of offering publishers an appealing, open affiliate program; Google hyperlinks Fandango showtimes, but not Movietickets.com. When a consumer is looking at movie showtimes, only some of which are hyperlinked to a POS, I suspect that he often believes that the non-hyperlinked times are not available for sale online anywhere6. Therefore, when he values pre-ordering (i.e., when he anticipates a sell-out), non-hyperlinked theaters will suffer. I anticipate that Google’s showtimes module will gain adoption, as a clean alternative to the cluttered UIs of the online brokers. Therefore, with respect to the Big 3, barring a private affiliate deal between Google and Movietickets.com, I believe that AMC’s Loews will lose pre-order market share.

The Big 3′s core customers are Facebook users. For any of the Big 3, creating a Facebook Page for each theater offers a free re-marketing channel for both brand and direct response. Even if it already has a “master” Page run by corporate, it’s worth trying localized Pages as well, since the share of user attention that (say) Regal could command is not fixed: users can fan both a national Page and a local Page. These could be managed centrally, via a 3rd party Page management dashboard, or locally by the theater manager (with assets and guidance from HQ). Giving many local teams a chance to shine in friendly competition with one another will engage employees’ creativity and help best practices bubble to the top. Two easy ways customers can connect to a Page for (say) Alamo Drafthouse Cinema are:

As the Harvard Business Review pointed out in an article demonstrating the loyalty value of Facebook Pages, one should avoid “if you build it, they will come” thinking; most of your customers aren’t yet your fans on Facebook. It’s key for a given cinema to present the opportunity to connect when the consumer is enjoying its products. For instance, these two methods to connect could be publicized on:

What’s more, when these consumers connect with the Page, their friends will learn about it and have the opportunity to connect as well. Turning these fans into repeat customers hinges on direct response best practices. The linchpin, of course, is experimentation. Facebook shares advice and updates regarding Facebook Pages, Facebook Ads, and brand marketing.

Once a Facebook strategy is humming along, it may be worth trial-and-error forays into other leading social media platforms, most notably, Yelp, YouTube, and Twitter. The proliferation of UGC (including negative reviews) across these and other sites is spurring a reputation management industry serving frustrated local business owners; Marchex is emerging as an early leader. Besides outbound marketing, these tools can help identify which locations and employees are undermining the brand promise of customer service.

Margins

Most of the commonly suggested concessions ideas forget that the food gross margin is already heroic. Even alcohol is not a slam-dunk, since its gross profit per sale won’t be much more than soda; I believe that the main benefit would be to increase the overall beverage sell-through rate (albeit at increased costs7).

I believe that the most effective strategy to improve the ticketing gross margin is to demonstrate to the studios that one has profitable alternatives to their products, as described above. Perhaps counter-intuitively, a given Big 3 player would want his 2 peers –against whom he bids for films — also to discover these profitable alternatives, so that their demand for studio product is similarly attenuated.

AMC has decided to invest in large theaters in highly trafficked neighborhoods of dense population centers. I believe that its industry-leading average ticket price, box office per screen, and revenue per theater are a result of this decision. (Increasingly, in the future, the fraction of screens that are 3D and IMAX will influence these KPIs more than they did pre-Avatar.) I believe that cinemas tend to be anchor tenants, bringing customers to nearby restaurants and shops. They should try to internalize those positive externalities in the form of subsidies from their landlords and/or local governments.

What’s Next

I continue to believe that digital and 3D are the most important near-term innovations for the Big 3. Avatar’s $2.6bn worldwide take will accelerate DCIP’s roll-out. Next highest on the strategic priority list, I’d:

If they can move fast, they might just keep seeing us at the movies.

Footnotes

6 Since these links are not labeled as sponsored but are, in effect, sponsored by Google itself, I would not be surprised to see Google, in the interest of organizing the world’s information and making it universally accessible and useful, hyperlink even showtimes that do not offer affiliate commissions.

7 These costs may be high. They include explicit cash costs (alcohol licenses, janitorial, insurance, etc.) as well as implicit costs of undermining the customer experience for those distracted by their fellow customers. That latter risk will be particularly acute if the service model is as casual as at baseball parks.

Cinema Profitability Part 4

Posted on by Jon Reiss

This is Part 4 of Jon Fougner’s guest series on Cinema Profitablility – today he focuses on the marketing.

Marketing

The last time you went to a movie, how did you decide where to see it? If you’re like most Americans, you simply went to the nearest theater showing it. (Of course, if you’re reading this, you may be a cinephile and therefore a bit more discerning in your choice!) That’s even less brand loyalty than you might show in where you buy commodities like gasoline.

The cinemas have historically deferred to their vendors, typically owned by large media companies, to advertise their products. (Of course, the cinemas have done the crucial re-marketing work of on-site merchandising for the products, in the form of movie trailers, but I doubt that those trailers do much to engender loyalty to the particular cinema (chain) in which they’re shown.) That’s extraordinary; even in verticals where the manufacturers typically buy a lot of media, such as auto, CPG, and QSR, the retailer typically advertises as well, both to complete the bottom of the demand generation funnel and to take share from competing demand fulfillers.

It’s extraordinary, and it may have to change. The good news: many of the needed tactics don’t require paid media. A few are laid out below.

The Big 3 should build low-touch customer relationship management systems anchored by e-mail. A few of the places to capture e-mail addresses from:

Around each e-mail address, build a CRM profile, including:

Send customers highly-customized e-mails, measuring success by value of tickets sold. (This measurement requires conversion data from the online POS, which should be a show-stopping negotiating demand in any agreement with a 3rd party broker.) Some of the blocking and tackling of optimizing these e-mails is obvious. For instance, the preview field in a major Webmail provider like Gmail shouldn’t tell people to unsubscribe:

And, for instance, no clickable film title (in the screen below, “A Single Man”)…

…should land on a page whose above-the-fold content makes no mention of it:

Some of the fruits hang higher, but tips from entertaining decks like DJ Waldow’s will help spot them. Most of the benefit, however, will come from relentless testing, likely through an e-mail marketing agency.

The promotional engine of this CRM system should be a loyalty program. Unlike AMC and Regal, Cinemark doesn’t even appear to have a loyalty program in the U.S.:

The program should leverage game dynamics, such as points collection, leveling up, social status, rewards, and randomization. As CRM gold standard Harrah’s knows, variable positive reinforcement is key. AMC owner Apollo co-owns Harrah’s and could choose to share some of its CRM playbook. The rewards should be meaningful. At a 58% weighted-average gross margin with 90%+ wasted admissions inventory, it’s hard to understand why AMC spends less than 1% of revenues from loyalty customers on their rewards. (For 10 ticket purchases = $83, you get 1 small popcorn, with COGS less than $83 x 1% = $0.83.)

The company’s website will serve several purposes: loyalty program, e-ticketing, gift cards and more. Modeling the value of users’ interactions with these features is the first step towards prioritizing amongst them and optimizing for the highest value conversions while culling all else. Today, if a user visits the Big 3 sites, she’ll experience:

Experts like SiteTuners.com offer consultation and testing in order to identify and remedy problems like these.

END OF PART Four  Tomorrow:  Marketing 2 and Margins

Guest Post by Jon Fougner: Cinema Profitability Part 3

Posted on by Jon Reiss

This is Part 3 of Jon Fougner’s guest series on Cinema Profitability – today he focuses on the channels:
Channels

Do the Big 3 have channel strategies? The vast majority of their tickets are sold either at the box office or via 1 of the 2 online brokers: Comcast’s Fandango with 9mm monthly uniques (used by Regal and Cinemark, plus the legacy business of AMC’s Loews) and AOL-related MovieTickets.com with 3mm monthly uniques (used by AMC ex Loews, plus some legacy business from theaters now owned by Regal). My Gmail is chockobloc of order confirmations from both of these brokers. And yet, I’ve never as a result received targeted e-mail marketing from either of them nor the Big 3 whose inventory (among others) they represent. What a missed opportunity to share anticipated, personal, and relevant marketing! Instead, apparently indifferent to its own brand, Fandango indefatigably pushes irrelevant co-marketing offers (“Get your free credit report and credit score in seconds”), exit pop-ups and all. My inference is that the Big 3 have failed to negotiate an e-mail marketing partnership with their brokers, who, left to their own devices, have strayed off into unsavory lead generation rather than fishing where the (cinephilic) fish are.

This doesn’t make sense. The brokers are in a weak negotiating position, since they need at least to show the Big 3′s showtimes (as they currently do) to appear comprehensive to users. The Big 3 should get out of exclusives with the brokers so they can use them but simultaneously rep their own inventory online, as the airlines do. This would take a bit of SEO, so consumers find their O&O sites when they search on movie titles. The Big 3 tend to invest as consortia, but it’s time for a go-it-alone adventure here.

Website optimization is a separate topic I’ll touch on later, but while on the subject of online ticketing interfaces (whether 3rd party or O&O): there’s no excuse for missing out on free social marketing tools. For instance, implementing Facebook Connect could make it easy for a customer to broadcast his ticket purchase to all his friends, at no cost to the ticketing site. Better yet, when he arrived on the site, he could see which friends were going to which screenings of which movies. Movie-going, after all, is social.

Once a Big 3 player builds its own ticketing site, it should build an affiliate program, giving away most of the service fee as commission. Fandango runs an affiliate program through Commission Junction; its paltry $0.10 per ticket commission pales in comparison to that of leading programs such as Amazon Associates on both a %-of-revenue and a %-of-gross-margin basis, because Fandango knows it has only 1 competitor, whose affiliate program appears to be private. The main partners of such a program would be film sites, the websites of newspapers and local TV news programs, and the long tail of cinephile amateur bloggers. Critics tend to prefer highbrow (think New York Film Festival) and middlebrow (think Oscars) films to mainstream Hollywood fare, so a potential consequence of such a program is the emergence of a viable top-to-bottom marketing funnel whose lack heretofore (along with the expenses of physical prints) accounts for the paucity of “art” films in Big 3 houses.

END OF PART Three  Tomorrow:  Marketing

Guest Post by Jon Fougner: Cinema Profitability Part 2

Posted on by Jon Reiss

This is Part 2 of Jon Fougner’s guest series on Cinema Profitablility – today he focuses on the products that cinemas offer:
Products

Cinemas’ suppliers have leveraged the proliferation of alternative retailers for their products: DVD, cable, VOD, Netflix, iTunes, Hulu, and more. Cinemas, meanwhile, have barely experimented with sourcing alternative product. The result is an oligopoly5 (the studios) selling to a captive market (the cinemas), a game theoretical nightmare for the buyers, even if they are an oligopoly of their own. That translates to a 55% revenue share back to the studios on tickets. (The other half of gross profit comes from food, sold at an 85% gross margin.) And the theaters know it could get worse, as more films go day-and-date or nearly so.

The good news is that the pending deployment of digital projection will reduce the fixed cost of showing a given product on a given screen to nearly zero. Without having to recoup the cost of manufacturing and shipping a physical print, it’s economically feasible to experiment with niche content that you might exhibit only a few times. Translation: the cinemas can throw scores of more tests against the wall, and arrive at an equilibrium with a greater diversity of content. Many industry watchers would not have predicted that the digital broadcasting of the Met would have done so well. Let’s try other marquee fine arts (Broadway plays and musicals, ballets, etc.), live sports (Olympics, pro sports, NCAA, etc.), prime-time network TV, other films (classics, independents, etc.), even university lectures. My personal favorite: content with built-in intermissions, so patrons go to concessions during the breaks. Since these productions’ cost structures are already supported by existing revenue streams, and the marginal cost of adding cinema distribution is low, their producers’ negotiating leverage should be low. Although channel-partnering with cinemas is an obvious win for the Met, since the geographical constraints of its audience means it doesn’t have to fear cannibalization, TV execs might hesitate longer. However, it becomes a no-brainer for even them if the cinemas are willing to show their ads — which makes more sense than relying on National Cinemedia, since the TV ad market enjoys so much more liquidity. Many of these alternative content trials will fail. For instance, competing with sports bars without selling alcohol may be a tough sell. That’s fine. Only keep the winners.

A skeptic might ask: isn’t there a big opportunity cost of borrowing a screen from first-run films to test these alternatives? The Big 3′s screens gross only $44 – $57 / hour (including concessions), or about $100 / hour if you count only noon to midnight. At $7.50 ticket revenue plus $3.50 food revenue per patron, that’s an average of just 20 butts in seats during operating hours (estimating that screenings average two hours apiece). At a wild guess of 200 seats / screen, about 90% of inventory is wasted. During daytime and weekdays, wastage is obviously highest, so these periods are ripest for experimentation. In order to maximize combined profits of the content producers and exhibitors, I suspect that it’s optimal to lower ticket prices for some of this alternative content, since the concessions gross margins are so lucrative. (To do that mental exercise, pretend you are CEO of a holdco that owns both the content developers and the exhibitors, so the content rev share is a wash to your bottom line.) The trouble is, to get to that Pareto-efficient outcome, I bet that the content owners would turn the conversation to revenue-sharing the concessions, which I imagine would make the exhibitors’ heads explode. Rev sharing the concessions is unnecessary to make this work, since there’s so much admissions gross profit being left on the table.

I hope but am led to doubt that each of the Big 3 has built a detailed, quantitative model projecting the total revenue stream of each picture it evaluates for rent. Back in 2006, Malcolm Gladwell was enamored of the team at Epagogix working on this problem. More recently, on the production side, Ryan Kavanaugh has become one of Hollywood’s fastest rising moguls, in large part through his number crunching acumen. (Now even amateur B.O. modelers can put their money where their mouth is, via the “Hollywood Stock Exchange“.) The models are often set up as complex regressions whose right-hand side variables include genre, format, release date, actors, directors, studio marketing budgets, and so on. One risk with such models is that they be over-fit, due to the large number of RHS variables and wealth of historical data. Their analytical approach is typically not experimental, since they don’t have the levers to run the experiments. Averaging 5,000 screens across 400 cinemas, each Big 3 chain has the luxury of being able to run controlled experiments. For instance, suppose Regal is evaluating two prospective titles, Picture A and Picture B, each of which it projects to gross $20k per screen over its run of April 1 to May 1. It could randomly assign each of its theaters to bid on either A or B, and then look for statistically significant differences in the total revenues of Picture A and Picture B theaters. Besides direct revenue from A and B ticket sales, such an approach would capture indirect effects, such as cannibalization, sell-out spillover, and concessions. (Once most transactions are tied to a specific customer (see below), it will be possible to directly measure such effects: e.g., hypothetically, each “Transformers 3″ ticket might generate 1.5x the concessions sales of a “White Ribbon” ticket.) The same experimental design could also be applied to other proposed products, such as new concessions.

So there’s a science here, but there’s also an art — just ask Tim League. His Alamo Drafthouse chain in and around Austin, TX is one of the highest revenue-per-seat cinemas in the United States. Tim has built loyal communities around his theaters, which are the social anchors of their neighborhoods. Revelers pack the house for singalongs, “quote-alongs”, film festivals and more. And they gorge on good food and alcohol. Does it help to be in a college town that’s an anchor of the independent film movement? Of course. Is Tim’s the most profitable theater, per screen, in the country? Maybe not — his costs are high, too. But I’m told that Tim is getting offers to franchise around the country. And if I were one of the Big 3, I’d sweat that.

Assigned seats. Real food. Alcohol. Ticket stub ad inventory for local restaurants’ coupons. Video game tournaments. Subscription products (“Monday Night Comedies”, etc.). Demographic-targeted titles that follow the Netflix rental maps. Ancillary revenue streams akin to how Live Nation makes its gross margin: “VIP” access and film-specific merchandise and media (not necessarily fulfilled on-site). We’ve seen small pilots of some of these. AMC has even promised its lenders some innovations. Which of these products can be meaningfully accretive to margins at scale? We’ll never know, at least not until one of the Big 3 conducts a good ol’ fashioned experiment.

Notes:

5 I say “oligopoly” in the game theoretical, as opposed to legal, sense.

END OF PART Two  Tomorrow:  Channels

Guest Post by Jon Fougner: Cinema Profitability

Posted on by Jon Reiss

I had the fortune of meeting Jon Fougner, who is the Principal, Product Marketing Monetization at Facebook at Sundance this year (he was showing filmmakers how best to use Facebook to connect with audiences). He works with the ads engineers and Product Managers to define products that will be successful in the marketplace. I mentioned Think Outside the Box Office and he said «Hey, I wrote this white paper on how movie theaters could be more profitable if they would experiment more, especially with online and social tools. Would you like to take a look at it?»  I immediately jumped at the chance to read it and publish it with my good friend Ted Hope.   The original is 4000 words – so we have broken it into 5 sections which we will run consecutively through the beginning of next week.   Jon will be appearing at the American Pavilion at Cannes on May 13th as well as the Produced By Conference in Los Angeles on June 4th.  He’s at facebook.com/jfougner.  Note that this draft was written last year; its qualitative and quantitative descriptions of the landscape are still fairly accurate, with at least one key exception: AMC has since revamped their loyalty program.  And as Jon predicted in April 2010, Blockbuster’s equity capital was wiped out.”

Here is Jon’s Post:

Introduction/Abstract1

The role of film exhibition in our imagination dwarfs its role in our economy. Dolby surround sound, residual awe of movie-going as children, proclamations of Hollywood’s sway — all this industrial light and magic create the illusion that movie theaters are a big industry. In fact, cinemas represent only 0.1% of the $14 trillion U.S. GDP. State lotteries rake in 4 times as much. Ticket sales barely outpace inflation, and wispy margins bounce around the single digits. Whether family- or sponsor-owned, their mandate has been to spit off cash.

The result is a space that has attracted an anemic level of innovation, led by three scaled chains: Regal, AMC, and Cinemark. Together, the “Big 3″ control 43% of the U.S. market. I say “together” because the three tend to act as consortia and exhibit (no pun intended) parallel behavior. Some adjacent innovation offers hope. For instance, as Avatar demonstrated, the studios’ development of 3D may prove one of several sorely needed silver bullets. But most adjacent innovation — in particular, high-resolution flat screens for home viewing, and Internet-based distribution vehicles to supply them with video — is an existential threat to the cinemas.

I believe that, without innovation, at least 1 of the Big 3 exhibitors risks losing its equity capital2 in the next five years. To be sure, their plight facing looming debt maturities is not as dire as Blockbuster’s. What’s more, there is a lot of low-hanging fruit. What I lay out below is an array of product, channel, marketing, and (in less detail) cost control tactics to get the ball rolling. More important than any one of these tactics, however, is the overall strategic mentality: to think more like a technology company. They need to embrace the scientific method to experiment, analyze, and iterate. They need to distribute to the edges of their employee base permission, responsibility, and incentive for delivering great products (think Starbucks or Nordstrom) and generating new ideas (think Best Buy or Google). And they need to move fast.3

Here’s a summary of where they stand4:

Footnotes

1 My employer is Facebook. This article represents my thoughts, not its. Thanks to Zakia Rahman, Colin Darretta, Harry Chotiner, and Jared Gores for providing helpful comments on a draft. The usual disclaimer applies.

2 In the case of Apollo-owned AMC, it’s possible that, instead, value will be transferred from debt holders to equity holders, as was the case with Harrah’s, which Apollo and TPG own.

3 Some of these insights may be applicable to smaller cinema businesses, too.

4 Does not yet reflect 4Q 2009.

END OF PART ONE  Tomorrow:  Products

Back to Writing – 3 More Books

Posted on by Jon Reiss

I have embarked on writing again and have two new books in the works and one more on the horizon.   First off, I am writing a book on the Producer of Marketing and Distribution or PMD.  In the tradition of Think Outside the Box Office, the book will define the role and responsibilities specific to the PMD, lay out best practices for those wanting to be PMDs,  lay out the tasks for a PMD over the lifecycle of a film, provide guidance on how to fulfill those tasks.  This includes developing a marketing and distribution plan and budget, the PMD in prep, production and post, audience engagement, timing of rights, as well as different marketing and distribution options available to films.  The book will cover education of PMDs and will propose a curriculum of study for PMDs.    I will be tweeting my progress on this book starting next week.

Secondly, I am working with The Film Collaborative and Sheri Candler on an electronic book of film case studies.    Each of us are drilling down to the specifics of a number of films distribution and marketing paths and providing hard numbers on their successes (and failures) to help filmmakers make informed decisions about the releases of their films.  This project was generated by The Film Collaborative who brought Sheri and I on board and is part of their educational initiative.  (as you know from my book and previous writings I am a big fan of what TFC does – and you know I’m a big fan of Sheri’s as well!).   We are currently locking down the title – and would love your input:  Please participate in our on-line survey.

On the horizon – I am writing a book about how all the art forms: music, film, art, photography, book authorship, journalism, dance,  comedy, gamers and expanded storytellers (etc) are all utilizing similar techniques to get their work made, marketed and distributed.   I came upon this idea while researching examples for my TOTBO workshops and discovered that many of the other art forms (music especially of course) were much further ahead than film in using these techniques.  But I also discovered that while some people used some of the techniques available, many would leave numerous opportunities unexplored – didn’t even know those opportunities existed.  As a result I saw a purpose for writing a book in which I would adapt and expand the system that I outlined in Think Outside the Box Office for all the arts.  This project will allow artists to learn from others and create opportunities for themselves that they may not have thought of by the nature of the traditional paths of their respective fields.   It will also provide a guide in how to use these techniques.   Over the next months, year, I will be interviewing a wide range of artists on this topic and I will be sharing excerpts on this blog.  I look forward to your input and feedback!!  (Look out for a revamped website and FB page in the future as well).