PART II: Emerging Models
WITH THE RAPID AND SEEMINGLY CONSTANT CHANGES IN THE MEDIA INDUSTRY, IT IS IMPOSSIBLE TO PREDICT WITH CERTAINTY HOW SOCIAL ISSUE MEDIA PROJECTS WILL FARE IN THE LONG TERM. The often discussed switch from broadcast to narrowcast and the equally oft mentioned shift from “push” media consumption (appointment viewing) to “pull” media consumption (programming on demand) will lead some producers to lower their budgets and surrender to the fragmented marketplace by producing short documentaries that can be marketed to easily targeted and reachable niche markets. But there is little evidence to date that even niche markets will pay for nonpartisan, social issue media productions at a level that will support or significantly offset production budgets on a consistent basis. These projects will in all likelihood continue to need noncommercial underwriting. However, there are opportunities for producers to increase their effectiveness (thereby making underwriting more attractive in the eyes of funders). There are also strategies to increase earned income to lessen the need for funding somewhat, to offer more stability between productions, and to provide possible investments in new project development.
Production Dollars for Docs – Current Models
Producers usually raise production funding for social issue media docs from a combination of four sources: public dollars (NEH, NIH, CPB, ITVS, state arts programs), private dollars (national, regional and local foundations, wealthy family/individual foundations, advances from US distributors), international co-productions (preselling international rights to foreign, usually public, broadcasting entities in exchange for relinquishing some editorial control), and earnings from previously released films (royalties, speaking fees, awards). Securing production funding has become, in the words of one producer, “pitifully difficult.” We have identified six typical patterns for securing production funding. Some of these models are becoming less viable because of political and technological changes, while others work well for particular projects and producers but are not suitable for widespread replication.
1. Public Funding Model
The National Endowment for the Humanities offers planning grants up to $10,000 and scripting grants that average $50,000 to $60,000. The application and award timeframe means that producers are often not eligible for production support for two years. Occasionally, filmmakers can secure funding from the National Institutes of Health or the Department of Education (though in recent years such funding for social issue documentaries has all but ceased to exist). The NEH, working with the Corporation for Public Broadcasting (CPB) has undertaken special initiatives on history and culture. Because of the politics of public funding, both NEH and CPB avoid funding social issue documentaries that might be controversial. The exception to this is ITVS, which receives its funding from CPB (Corporation for Public Broadcasting).
2. The Medici Model
A public television executive we interviewed (who asked to remain anonymous when making this observation) described the rising practice of wealthy individuals or their foundations choosing to fund films that matched their particular interests as the “Medici” approach (a reference to the wealthy Italian family that bankrolled many Renaissance artists). This executive also expressed concern about this model. Examples of such individuals and foundations include the Bill & Melinda Gates Foundation (source of wealth – Microsoft), Paul Allen/Vulcan Productions and Clear Blue Sky Productions (source of wealth – Microsoft), Lynne and Harry Bradley Foundation (source of wealth – electronics) George Soros (source of wealth – investments), Sarah Mellon Scaife Foundation (source of wealth – industry, oil, banking), John M. Olin Foundation (source of wealth – chemicals and munitions), Jeff Skoll/Participant Productions (source of wealth – eBay), Sir John Templeton/Templeton Foundation (source of wealth – investments) and Philip Anschutz/Walden Media and Crusader Films (source of wealth – oil, railroads, Qwest Communications and Regal Entertainment Group). Examples of recent documentary films made by and/or supported by the above funders include:
• “Rx for Survival” – funded by the Bill & Melinda Gates Foundation and the Merck Company Foundation
• “Evolution” – funded by Clear Blue Sky Productions (Paul Allen’s company)
• “The Question of God” – funded by Walden Media (Philip Anschutz’s company)
• “The New Heroes” – funded by the Skoll Foundation
• “One Nation Under God: The History of Prayer in America” (forthcoming) – funded by the Templeton Foundation
• “Renewal: The Eco Religion Movement” (forthcoming) – funded by an anonymous single donor, through the Tides Foundation
Often, the media projects funded by these groups are based on ideas that are developed by the founder or staff members. The foundations will usually entertain proposals for ideas that are in alignment with
their agenda as well (not unlike traditional philanthropists, as described below). If funding for social issue media projects were abundant, then the addition of wealthy individuals to the donor pool would be of little concern. But when funding for these projects is scarce and the number of projects that secure sufficient funding for a national release is reduced, then the role these philanthropists play takes on additional weight. For some, the ability of billionaires to influence the public agenda by funding documentaries does little to serve the common good. Further, when wealthy individuals combine their underwriting with the underwriting of others, it lessens the perception and possible reality of individual underwriters having true editorial control.
3. One-Man-Band Model
The virtual end of the long-form documentary on public television (one that does not fit into an existing series like “POV” and is more than one hour long) has made it difficult for independent production companies to exist as much more than a one- or two-person shop, Ken Burns being a notable exception. This means all of the fundraising, corollary production for new media formats, publishing, outreach, educational materials and promotion must either be done by a partnering presenting station or not at all. Several interviewees have pointed to Arthur Dong as an exception to this rule. Cara Mertes of American Documentary noted, “Arthur Dong has a great model for doing films – he spends one year developing, one year producing, and one year doing outreach. He funds his own films (largely through earnings from previous films) and self-distributes DVDs and speaks on campuses (for which he earns about $2000 per appearance).” Mertes went on to say, “Not many people have that kind of discipline or skill set.” Sandi DuBowski, the producer of “Trembling Before G-d,” which presents the issues of gay people coming of age in Orthodox Jewish communities, has taken his film to over 150 cities and dozens of countries and for five years after finishing his film has done over 800 presentations. This kind of dedication and investment of time is not something many producers can match, even if the honoraria provide a source of revenue. Moreover, this model is very limiting to output. Nonetheless, if one could keep down costs, earn predictable revenue, and oversee most major components of each project, dependence on outside sources for new production funding could clearly be reduced over time.
4. Reinvest Back-End Earnings Model
Arthur Dong’s one-man-band model relies on keeping staff costs down and generating revenue through public speaking as well as sales. More and more, producers are coming to rely on direct-to-consumer DVD sales as a source of revenue. This assumes, of course, that somehow they found enough money to produce their first revenue-generating documentary and that the subject of the program garners interest and press and “viral marketing” that will fuel sales to a target group of consumers. Back-end revenues are generally used to support the filmmaker and perhaps a staff during the development phase of the next project. Production dollars after the R&D stage are usually raised from outside philanthropic sources. The best known example of this back-end revenue stream supplying planning money for the next front-end model is Robert Greenwald. In 2004, Greenwald produced “Outfoxed: Rupert Murdoch’s War on Journalism.” The film received financial backing from the activist Web-based organization MoveOn.org and from the progressive think tank Center for American Progress. Funding from such advocacy organizations makes it difficult if not impossible for his films to receive a national broadcast over public television. But the film had a brief theatrical release (earning $400,000 in domestic release and $450,000 internationally as well as nearly $500,000 in domestic video sales). In 2005, Greenwald produced a documentary on Wal-Mart. Within a few weeks of its release, “The High Cost of Low Prices” sold over 100,000 DVDs (at $12.95). [See sidebar on House parties]. As a side note, in early 2006, Greenwald announced two new projects to be released as television series. For these films he is relying on funds from advocacy organizations. One film is being funded by the American Civil Liberties Union, which has provided $1,600,000 in production funding for a Court TV/Link series called “The ACLU Freedom Files”; the other is being funded by the Sierra Club (which provided $750,000 in funding) and it is a nonfiction television series called “The Sierra Club Chronicles.” It is interesting to note that cable and satellite television now seem open to advocacy documentaries.
5. Moonlighter Model
It is extremely difficult for a producer to earn a professional wage in general, and it is particularly true for filmmakers focusing on social issue media. When public television was more open to long-form documentaries and allotted national air-time to them, this was less the case. During the 1980’s and early 1990’s, the larger budgets and extended production time enabled production companies such as Blackside, Roja Productions, Paradigm Productions, Stone Lantern Films, Lumiere Productions, Kartemquin Films and others to staff and manage their companies on an ongoing basis. As a consequence of this change, many filmmakers now make their social issue media documentaries on the side, while they earn a living making more commercial films, or, as is more and more the case, while they teach undergraduates and graduate students how to make documentary films. The New York Times reports on one documentary filmmaker who did a variety of jobs on the side, including an online radio show called “Sex with Emily.” Award-winning documentary producer Sam Pollard says, “I could never earn a living producing social issue films today.” His social issue films are only possible because he is a tenured professor at New York University and earns additional funds editing commercial films.
6. Message More than Media Model
Social issue media documentaries that are made today are often made to promote a particular message or messages of a foundation or a group of foundations. Independent producers, production companies and public television stations research the nonfilm program areas of foundations and develop programming that furthers the reach or impact of these program areas. In this model, the quality of the program, while often very high, is secondary to the message being delivered. Cara Mertes states flatly that “moving outside of media funders into grants from programmatic funders is a surefire way to get bad media.” Many would disagree, but the disagreement gets to the heart of the question: What is success in the field of social issue media? By whose measure is success to be judged? A project that wins awards and garners great reviews but leaves no visible trace of social impact may be a success from one perspective but not another. Foundations with program areas that occasionally underwrite national documentary projects include the Annie E. Casey Foundation, the Lumina Foundation for Education, the Wallace Foundation and many more.
7. International Co-productions
Structuring co-production arrangements with international broadcasters has become increasingly difficult, according to Tom Koch, the international programming executive at WGBH Boston. Koch estimates that today a US producer would need to bring in five foreign co-producers to achieve a sufficient budget. According to Koch, state subsidies are dropping and foreign broadcasters are giving less and less: “The eye of the needle is getting narrower and narrower.”
Additional Sources of Revenue for Social Issue Media Producers
Deloitte Touche Tohmatsu, an international consulting firm, wrote in its publication “TMT Trends: Predictions, 2005”:
This new model, with the broadcast being just a starting point for revenue, parallels the changes in the movie industry, in which box office revenue now accounts for about 25% of a film’s gross earnings. The real profit is made in DVD sales, rentals, ancillaries and international distribution. Of course none of these ancillary sales happen without the original production. Social issue media producers’ biggest problem is securing funding for the broadcast media project. But producers need to learn more about reformatting or “prepurposing” their projects in tandem with preparing a broadcast. This is important as a source of additional revenue and increasingly important as a vehicle for maximizing social impact.
Bearing in mind the danger of relying on commercial revenue as a source of funding, clearly there are lessons for social issue media producers to learn from innovations in distribution, and these new tools can help supplement funding or provide R&D funding for new projects. Below, we look briefly at several approaches to generating revenue after a project is produced or at least substantially produced.
Direct DVD Sales
Several of our interviewees have pointed out the surprising success many filmmakers are having in distributing DVD’s themselves directly to consumers. Robert Greenwald’s “Outfoxed” and “The High Cost of Low Prices” have earned his production company hundreds of thousands of dollars. Greenwald’s company, Brave New Films, is expanding his alternative distribution model. In March 2006 Greenwald announced that his company will be distributing a timely documentary produced by two filmmakers from Texas, “The Big Buy: How Tom Delay Stole Congress,” which will have minimal theatrical screenings and will be sold via the Web site and through the house party circuit. John Merrow, the producer and education reporter, takes a different approach to selling DVD’s. He sells them at close to cost, believing that this kind of distribution to a targeted audience significantly extends the impact of the work, and funders are pleased with the increased impact (and therefore more likely to offer additional funding for future projects). We spoke with Susan Conner of the Lumina Foundation for Education about this approach and she was enthusiastic. She noted, “We need to re-conceive our distribution as niche rather than mass market and package for the audiences we want to reach and use appropriate delivery.” With the average cost of pressing a DVD now down to less than $2.00, and marketing conducted largely through the Internet, breakeven is much easier to attain and profitability is more likely as well. By selling directly to consumers, the producer earns far more than a royalty that a video distributor would pay. The producer earns the entire amount of the sale minus the cost of duplication and packaging and minimal sales costs. However, the producer must have the time and skill set to distribute the DVD’s.
In late 2004, Wired magazine published an article called “The Long Tail,” which laid out a new way of thinking about distribution. The basic idea is that with the Internet’s efficiency and ability to transcend brick-and-mortar storefronts, retailers (and others) should stock a deep variety of inventory because now buyers can be found for even the most esoteric item – once they hear about it. This phenomenon works well with niche-oriented social issue media projects released on DVD. In any one community, the audience for that product may be minimal, but a person here, an organization there, from all around the country (or world) adds up significantly.
With the frenzy of the 2004 presidential election, a new word-of-mouth campaign developed via house parties (see sidebar). An interested party signs up to buy a DVD (via the Web) and to invite several other like-minded citizens to attend a house party where there is a screening and discussion. Often the DVD is available for sale at these screenings. This is a version of what has come to be commonly known as “viral marketing,” that is, the spread of information from peer to peer via electronic communication, blogs, emails, Web postings, and text messages. The approach has yet to demonstrate itself as a helpful tool for an inclusive democracy and nurturer of common ground. As one producer noted, “Though [viral marketing] screenings can create word of mouth, you’re essentially preaching to the converted.”
It is important to note that the “Long Tail” phenomenon and the viral marketing approach to distribution work well when a project is already completed, that is, when the production funds have already been secured and the project is delivered on budget. It is a strong source of back-end revenue, but not usually a sufficient source of production funding for the next project.
HOUSE PARTY DISTRIBUTION/PROMOTION
MoveOn.org has used documentary films to help organize house parties of like-minded citizens in communities across the United States. Earlier, Moveon.org worked with Meetup.com to launch house parties related to the 2004 presidential election. Meetup.com began in 2002 and garnered much attention when it became a core component of Howard Dean’s campaign for the presidency during the primary elections of 2003.
House party screenings began in earnest in 2003 when MoveOn.org worked with Robert Greenwald and his direct-to-DVD production “Uncovered: The Whole Truth About the Iraq War.” By the end of the year, MoveOn.org had held over 2,200 house parties. In addition to the screenings, the DVD was offered for sale via the Internet. Within a short period of time, nearly 23,000 people had ordered it.
In June of 2004, MoveOn.org gave Michael Moore’s documentary “Fahrenheit 9/11” a similar grassroots treatment, though the house parties were held with people who had agreed to see the film in theaters during its opening weekend. The Monday night parties focused on a live interview with Michael Moore. More than 110,000 people signed up and over 4,600 house parties were held.
MoveOn.org is not the only group to sponsor house party screenings. Others took up the house party approach to distribution and promotion shortly after the “Outfoxed” events. In early 2004, the Alzheimer’s Association held over 500 house parties in conjunction with the PBS documentary “The Forgetting: A Portrait of Alzheimer’s.” The producers of the film “Oil on Ice” (from Sierra Club Productions) held 1,800 house parties on what they dubbed “Arctic Action Day.” Robert Silvestri, of the Environmental Media Fund, told us that the project sold over 35,000 DVD’s. Also in 2005, Takebackthemedia.com launched house parties around its documentary “Rove’s War,” which it describes as “the Definitive Chronology of the Rove/Plamegate outing in DVD format.”
In 2006, Robert Greenwald’s company, Brave New Films, began distributing a film by two documentary filmmakers from Texas. The film is called "The Big Buy: How Tom DeLay Stole Congress" and it will be a direct-to-DVD release, promoted with house parties.
To date, perhaps the most effective house party distribution/promotion example comes from Robert Greenwald’s documentary about Wal-Mart, “The High Cost of Low Prices.” Brave New Foundation (affiliated with Brave New Films) reported that 100,000 DVD’s were sold in the first month, and over 9,000 house parties were held (see sidebar on “Measures of Success”).
Other highly organized house party screenings include:
“Coffee with the Taste of the Moon" house parties organized by Organic Consumers Association in conjunction with World Fair Trade Day.
“Take the Flame! Gay Games: Grace, Grit and Glory” house parties arranged in 2005 by the international group Federation of Gay Games.
“The New Heroes” house parties promoted by the Skoll Foundation, whose Web site declares, “Have a Party & Change the World.”
“Freedom Files” house parties.The American Civil Liberties Union is working with Active Voice and Brave New Films to hold house parties around the country in conjunction with this Court TV-based series.
“Operation Eagle Strike” house parties. The Web site rightmarch.com recruited 3,000 people to hold house parties to view this 20- minute film about conservative students who infiltrate an anti-Iraq war rally.
HOUSE PARTY DISTRIBUTION/PROMOTION CONT.
CONCLUSIONS: After World War II, women who had been employed in a variety of occupations were expected to “get back into the kitchen.” While postwar business was booming, women were largely kept out of the marketplace. In the late 1940’s, a retailer named Brownie Wise developed a direct marketing strategy for selling plastic food storage containers. Tupperware parties were held in the home of a host who invited friends and neighbors to view and purchase products.
The documentary house parties are a descendant of this marketing approach. Most of the documentaries that garner attention and direct sales of films through the house party/Internet method of distribution are those that do not have traditional distribution options. Controversial films that are kept out of traditional distribution in theaters or on television (or choose not to seek such distribution) benefit the most from this viral marketing approach. And sales of DVD’s made directly to consumers either at the parties or online offer a significant return to producers (relative to the traditional distribution method).
The obvious limitations of this approach are that attendees are usually already loyal to the cause being presented, and the film itself is inevitably being viewed as an advocacy tool rather than a spark for reflection and deliberation. Additionally, we have not found evidence that new organizations or associations develop when strangers get together for these house parties. “The High Cost of Low Prices” received an enormous amount of press attention in part due to the large numbers of house parties and public screenings. This model may be replicable with certain subjects, but as a phenomenon attracting press attention, it seems unsustainable.
While this method of distribution is not a solution to the challenges facing social issue media producers, the lessons of involving the public, using the Internet, and direct-to-consumer/citizen sales are refreshing and worth using.
Royalties
Unlike direct sales, which enable the producer to earn most of the dollars from each unit sold, a more traditional approach is for the producer to sign over video sales rights to a video distributor. One advantage of this approach is that it requires very little from the producer – the manufacturing, design, packaging, promotion, order processing and returns are all handled by an institution established just for this purpose. The disadvantage is that the producer earns only 15 percent of the net receipts, or $1.87 on a DVD that retails for $25.00.
For years documentaries have been sold at a premium price to educational institutions for classroom use and institutional screenings. This market is quickly diminishing. Eddie Wong, executive director of NAATA, notes that in 2004, sales revenue through institutional purchases declined by 35 percent.
NEW DISTRIBUTION STRATEGIES
Web-based Rental Services – Beginning in 2004, the PBS series “POV” began distributing many of its documentaries through the 2-million-subscriber company Netflix. Each film is available to Netflix members the day after its original broadcast. Most of the films are available for rental exclusively through Netflix for the first 45 to 60 days after broadcast. American Documentary (the producer of the “POV” series) has also arranged with Netflix to make available older documentaries that are rebroadcast under the name “True Lives” on select public television stations. The producer is given an advance from Netflix (between $5,000 and $9,000) for the right to rent the film. Additionally, the films are made available for sale through Docurama (and the producers earns a royalty on each sale). Typical royalties are approximately 15 percent of net. One analyst described this model as the “see it, rent it, buy it” model.
Digital Theatrical Distribution – Digital technologies allow for new distribution and exhibition opportunities that make it efficient and affordable to bring specialized films to digital theaters in small venues that are not served by independent theaters. By eliminating the cost of prints and shipping, this method does away with the most expensive component of theatrical distribution. Emerging Pictures has created a network of digital theaters in nonprofit arts and science institutions (and old movie theaters) and has begun distributing first-run independent films, documentaries, international films, children’s programs and educational programs. They are working with these institutions to create local “calendar houses” with a goal of 400-450 screens. This would offer significant reach in emerging media markets and the potential for outreach and community impact and promotion for DVD sales. With interactivity comes the possibility of folks in different communities talking with each other and the filmmakers after the screenings.
Subscription Clubs – A new initiative, entitled Ironweed, is offering socially relevant films-of-the-month to club members. For $14.95 per month, members receive a DVD containing one feature-length political film (often a documentary) and a few shorts. Ironweed pays participating filmmakers a flat fee based on the number of films sold, as well as a share in subscription fees. This approach bypasses the theatrical distribution hurdle that many independents face. As the Christian Science Monitor noted, “In order to serve increasingly fragmented interests, subscription clubs now cater to ideologies and specialties.” Ironweed is a progressive, left-leaning aggregator of films. Counterparts on the right side of the political spectrum are emerging as well. For low-cost, niche-market films, this approach is promising. For social issue media films that seek to address a broad public, the club approach seems less promising.
Multiplatform approach – Although there is currently little money to be found in producing for multiple platforms, it seems likely that multiple-platform programs will appeal to a broader variety of consumers, will generate unanticipated uses of the media and, one hopes, will be correspondingly attractive to funders because of the additional reach. Funders have expressed enthusiasm in seeing projects being posted in short, downloadable video formats on the Web, shorter-message formats for cell phones, and versions for video iPods as well as enhanced versions for DVD release. The multiplatform approach seems inevitable. WGBH’s Tom Koch told us, “To survive, work must be repurposed and reversioned.”
Not-for-profit Cable and Satellite (Link TV, OneWorldTV, CurrentTV) – To date this distribution method earns little or no direct revenue but increases distribution and indirectly increases unit sales. A producer could prepare a broadcast version and then alternative cablecast/Webcast/podcast versions of a social issue media doc. If the producer were selling DVDs, this could help increase revenue.
NEW DISTRIBUTION STRATEGIES CONT.
Web-based Distribution – MediaRights.org has led the way in Web-based video distribution for very short social issue films. Its online catalog plays an invaluable role for people searching for social issue films from a variety of distributors. Its Media That Matters Film Festival distributes a collection of sixteen shorts through online streaming as well as through traditional DVD distribution, screenings and broadcasts. Distributing clips of broadcast-length social issue films offers promotion as well as spreading the message of the film. Another distributor that takes orders on the Web but prints DVDs on demand is Indieflix.com. This company offers producers nonexclusive distribution contracts and pays them one-third of the gross. eIndieflix.com sells DVD’s on demand for $9.95. Customflix.com offers producers a similar service. Docurama, as mentioned earlier, is also a well-known distributor of documentaries in packaged DVD format (it carries docs from “POV,” the History Channel, IFC,and Arts & Entertainment, among other sources). A Canadian Web site, www.cineclix.com, will distribute downloadable documentaries that have been shown in film festivals. Cineclix.com charges customers 99 cents for downloads less than 30 minutes and $5.99 for those over 30 minutes. The producer earns 40 percent of all revenue. Former CPB executive Katie Carpenter believes that soon “you’ll be able to pay 99 cents for a doc for a month” (note: this interview took place shortly before Apple announced iPod video downloads for $1.99.)
Web-based distribution is beginning to blend downloadable video sales with DVD sales. Because of this, Peter Broderick, of Paradigm in Santa Monica, urges producers to hold on to the rights for selling DVDs from their own Web sites. Broderick told a reporter in a January 2005 issue of RealScreen:
“The key is negotiating a per-unit purchase price from the manufacturer of no more than $5.00” (wholesale is typically $12.00). “It's costing them about $1.25 to make that copy, so they're making $3.75 on the sale to you,” he adds. In turn, if filmmakers sell the DVD for $20.00, they'll make $15.00 to $17.00 profit per unit rather than the typical $2.00 per unit. Additionally, interfacing with purchasers allows filmmakers to gather information about their audience while cultivating a relationship with it.
In this vein, Boondoggle Films has had success with its documentary “Aardvark’d.” Boondoggle signed with Google Video, allowing the film to be downloaded for $3.99. Boondoggle also sells the film in a DVD format (for $19.95) on the Boondoggle Film Web site (as well as a CD soundtrack).
Production Dollars for Docs – Current Models
Producers usually raise production funding for social issue media docs from a combination of four sources: public dollars (NEH, NIH, CPB, ITVS, state arts programs), private dollars (national, regional and local foundations, wealthy family/individual foundations, advances from US distributors), international co-productions (preselling international rights to foreign, usually public, broadcasting entities in exchange for relinquishing some editorial control), and earnings from previously released films (royalties, speaking fees, awards). Securing production funding has become, in the words of one producer, “pitifully difficult.” We have identified six typical patterns for securing production funding. Some of these models are becoming less viable because of political and technological changes, while others work well for particular projects and producers but are not suitable for widespread replication.
1. Public Funding Model
The National Endowment for the Humanities offers planning grants up to $10,000 and scripting grants that average $50,000 to $60,000. The application and award timeframe means that producers are often not eligible for production support for two years. Occasionally, filmmakers can secure funding from the National Institutes of Health or the Department of Education (though in recent years such funding for social issue documentaries has all but ceased to exist). The NEH, working with the Corporation for Public Broadcasting (CPB) has undertaken special initiatives on history and culture. Because of the politics of public funding, both NEH and CPB avoid funding social issue documentaries that might be controversial. The exception to this is ITVS, which receives its funding from CPB (Corporation for Public Broadcasting).
2. The Medici Model
A public television executive we interviewed (who asked to remain anonymous when making this observation) described the rising practice of wealthy individuals or their foundations choosing to fund films that matched their particular interests as the “Medici” approach (a reference to the wealthy Italian family that bankrolled many Renaissance artists). This executive also expressed concern about this model. Examples of such individuals and foundations include the Bill & Melinda Gates Foundation (source of wealth – Microsoft), Paul Allen/Vulcan Productions and Clear Blue Sky Productions (source of wealth – Microsoft), Lynne and Harry Bradley Foundation (source of wealth – electronics) George Soros (source of wealth – investments), Sarah Mellon Scaife Foundation (source of wealth – industry, oil, banking), John M. Olin Foundation (source of wealth – chemicals and munitions), Jeff Skoll/Participant Productions (source of wealth – eBay), Sir John Templeton/Templeton Foundation (source of wealth – investments) and Philip Anschutz/Walden Media and Crusader Films (source of wealth – oil, railroads, Qwest Communications and Regal Entertainment Group). Examples of recent documentary films made by and/or supported by the above funders include:
• “Rx for Survival” – funded by the Bill & Melinda Gates Foundation and the Merck Company Foundation
• “Evolution” – funded by Clear Blue Sky Productions (Paul Allen’s company)
• “The Question of God” – funded by Walden Media (Philip Anschutz’s company)
• “The New Heroes” – funded by the Skoll Foundation
• “One Nation Under God: The History of Prayer in America” (forthcoming) – funded by the Templeton Foundation
• “Renewal: The Eco Religion Movement” (forthcoming) – funded by an anonymous single donor, through the Tides Foundation
Often, the media projects funded by these groups are based on ideas that are developed by the founder or staff members. The foundations will usually entertain proposals for ideas that are in alignment with
their agenda as well (not unlike traditional philanthropists, as described below). If funding for social issue media projects were abundant, then the addition of wealthy individuals to the donor pool would be of little concern. But when funding for these projects is scarce and the number of projects that secure sufficient funding for a national release is reduced, then the role these philanthropists play takes on additional weight. For some, the ability of billionaires to influence the public agenda by funding documentaries does little to serve the common good. Further, when wealthy individuals combine their underwriting with the underwriting of others, it lessens the perception and possible reality of individual underwriters having true editorial control.
3. One-Man-Band Model
The virtual end of the long-form documentary on public television (one that does not fit into an existing series like “POV” and is more than one hour long) has made it difficult for independent production companies to exist as much more than a one- or two-person shop, Ken Burns being a notable exception. This means all of the fundraising, corollary production for new media formats, publishing, outreach, educational materials and promotion must either be done by a partnering presenting station or not at all. Several interviewees have pointed to Arthur Dong as an exception to this rule. Cara Mertes of American Documentary noted, “Arthur Dong has a great model for doing films – he spends one year developing, one year producing, and one year doing outreach. He funds his own films (largely through earnings from previous films) and self-distributes DVDs and speaks on campuses (for which he earns about $2000 per appearance).” Mertes went on to say, “Not many people have that kind of discipline or skill set.” Sandi DuBowski, the producer of “Trembling Before G-d,” which presents the issues of gay people coming of age in Orthodox Jewish communities, has taken his film to over 150 cities and dozens of countries and for five years after finishing his film has done over 800 presentations. This kind of dedication and investment of time is not something many producers can match, even if the honoraria provide a source of revenue. Moreover, this model is very limiting to output. Nonetheless, if one could keep down costs, earn predictable revenue, and oversee most major components of each project, dependence on outside sources for new production funding could clearly be reduced over time.
4. Reinvest Back-End Earnings Model
Arthur Dong’s one-man-band model relies on keeping staff costs down and generating revenue through public speaking as well as sales. More and more, producers are coming to rely on direct-to-consumer DVD sales as a source of revenue. This assumes, of course, that somehow they found enough money to produce their first revenue-generating documentary and that the subject of the program garners interest and press and “viral marketing” that will fuel sales to a target group of consumers. Back-end revenues are generally used to support the filmmaker and perhaps a staff during the development phase of the next project. Production dollars after the R&D stage are usually raised from outside philanthropic sources. The best known example of this back-end revenue stream supplying planning money for the next front-end model is Robert Greenwald. In 2004, Greenwald produced “Outfoxed: Rupert Murdoch’s War on Journalism.” The film received financial backing from the activist Web-based organization MoveOn.org and from the progressive think tank Center for American Progress. Funding from such advocacy organizations makes it difficult if not impossible for his films to receive a national broadcast over public television. But the film had a brief theatrical release (earning $400,000 in domestic release and $450,000 internationally as well as nearly $500,000 in domestic video sales). In 2005, Greenwald produced a documentary on Wal-Mart. Within a few weeks of its release, “The High Cost of Low Prices” sold over 100,000 DVDs (at $12.95). [See sidebar on House parties]. As a side note, in early 2006, Greenwald announced two new projects to be released as television series. For these films he is relying on funds from advocacy organizations. One film is being funded by the American Civil Liberties Union, which has provided $1,600,000 in production funding for a Court TV/Link series called “The ACLU Freedom Files”; the other is being funded by the Sierra Club (which provided $750,000 in funding) and it is a nonfiction television series called “The Sierra Club Chronicles.” It is interesting to note that cable and satellite television now seem open to advocacy documentaries.
5. Moonlighter Model
It is extremely difficult for a producer to earn a professional wage in general, and it is particularly true for filmmakers focusing on social issue media. When public television was more open to long-form documentaries and allotted national air-time to them, this was less the case. During the 1980’s and early 1990’s, the larger budgets and extended production time enabled production companies such as Blackside, Roja Productions, Paradigm Productions, Stone Lantern Films, Lumiere Productions, Kartemquin Films and others to staff and manage their companies on an ongoing basis. As a consequence of this change, many filmmakers now make their social issue media documentaries on the side, while they earn a living making more commercial films, or, as is more and more the case, while they teach undergraduates and graduate students how to make documentary films. The New York Times reports on one documentary filmmaker who did a variety of jobs on the side, including an online radio show called “Sex with Emily.” Award-winning documentary producer Sam Pollard says, “I could never earn a living producing social issue films today.” His social issue films are only possible because he is a tenured professor at New York University and earns additional funds editing commercial films.
6. Message More than Media Model
Social issue media documentaries that are made today are often made to promote a particular message or messages of a foundation or a group of foundations. Independent producers, production companies and public television stations research the nonfilm program areas of foundations and develop programming that furthers the reach or impact of these program areas. In this model, the quality of the program, while often very high, is secondary to the message being delivered. Cara Mertes states flatly that “moving outside of media funders into grants from programmatic funders is a surefire way to get bad media.” Many would disagree, but the disagreement gets to the heart of the question: What is success in the field of social issue media? By whose measure is success to be judged? A project that wins awards and garners great reviews but leaves no visible trace of social impact may be a success from one perspective but not another. Foundations with program areas that occasionally underwrite national documentary projects include the Annie E. Casey Foundation, the Lumina Foundation for Education, the Wallace Foundation and many more.
7. International Co-productions
Structuring co-production arrangements with international broadcasters has become increasingly difficult, according to Tom Koch, the international programming executive at WGBH Boston. Koch estimates that today a US producer would need to bring in five foreign co-producers to achieve a sufficient budget. According to Koch, state subsidies are dropping and foreign broadcasters are giving less and less: “The eye of the needle is getting narrower and narrower.”
Additional Sources of Revenue for Social Issue Media Producers
Deloitte Touche Tohmatsu, an international consulting firm, wrote in its publication “TMT Trends: Predictions, 2005”:
The traditional network model is based on the idea of one-to-many broadcasting, with revenue primarily derived from advertising. At its heart is the notion of mass-market reach – the ability to deliver programming and advertising messages to a substantial portion of the population (nationally or even internationally) through a single broadcast.
In recent years, the number of media formats and channels has exploded, changing the way people consume content, and slowly but steadily dividing the mass market into many pieces.
While audiences are getting smaller, their fervor and dedication are rising. Many viewers are willing to consume content – and pay for it – multiple times, in a variety of formats. Thus a television program is no longer a one-time event, funded by one-time advertising revenue, but the beginning of an extended revenue stream that includes subscriptions, DVDs, toys, apparel, video games, product placement and more…
This new model, with the broadcast being just a starting point for revenue, parallels the changes in the movie industry, in which box office revenue now accounts for about 25% of a film’s gross earnings. The real profit is made in DVD sales, rentals, ancillaries and international distribution. Of course none of these ancillary sales happen without the original production. Social issue media producers’ biggest problem is securing funding for the broadcast media project. But producers need to learn more about reformatting or “prepurposing” their projects in tandem with preparing a broadcast. This is important as a source of additional revenue and increasingly important as a vehicle for maximizing social impact.
Bearing in mind the danger of relying on commercial revenue as a source of funding, clearly there are lessons for social issue media producers to learn from innovations in distribution, and these new tools can help supplement funding or provide R&D funding for new projects. Below, we look briefly at several approaches to generating revenue after a project is produced or at least substantially produced.
Direct DVD Sales
Several of our interviewees have pointed out the surprising success many filmmakers are having in distributing DVD’s themselves directly to consumers. Robert Greenwald’s “Outfoxed” and “The High Cost of Low Prices” have earned his production company hundreds of thousands of dollars. Greenwald’s company, Brave New Films, is expanding his alternative distribution model. In March 2006 Greenwald announced that his company will be distributing a timely documentary produced by two filmmakers from Texas, “The Big Buy: How Tom Delay Stole Congress,” which will have minimal theatrical screenings and will be sold via the Web site and through the house party circuit. John Merrow, the producer and education reporter, takes a different approach to selling DVD’s. He sells them at close to cost, believing that this kind of distribution to a targeted audience significantly extends the impact of the work, and funders are pleased with the increased impact (and therefore more likely to offer additional funding for future projects). We spoke with Susan Conner of the Lumina Foundation for Education about this approach and she was enthusiastic. She noted, “We need to re-conceive our distribution as niche rather than mass market and package for the audiences we want to reach and use appropriate delivery.” With the average cost of pressing a DVD now down to less than $2.00, and marketing conducted largely through the Internet, breakeven is much easier to attain and profitability is more likely as well. By selling directly to consumers, the producer earns far more than a royalty that a video distributor would pay. The producer earns the entire amount of the sale minus the cost of duplication and packaging and minimal sales costs. However, the producer must have the time and skill set to distribute the DVD’s.
In late 2004, Wired magazine published an article called “The Long Tail,” which laid out a new way of thinking about distribution. The basic idea is that with the Internet’s efficiency and ability to transcend brick-and-mortar storefronts, retailers (and others) should stock a deep variety of inventory because now buyers can be found for even the most esoteric item – once they hear about it. This phenomenon works well with niche-oriented social issue media projects released on DVD. In any one community, the audience for that product may be minimal, but a person here, an organization there, from all around the country (or world) adds up significantly.
With the frenzy of the 2004 presidential election, a new word-of-mouth campaign developed via house parties (see sidebar). An interested party signs up to buy a DVD (via the Web) and to invite several other like-minded citizens to attend a house party where there is a screening and discussion. Often the DVD is available for sale at these screenings. This is a version of what has come to be commonly known as “viral marketing,” that is, the spread of information from peer to peer via electronic communication, blogs, emails, Web postings, and text messages. The approach has yet to demonstrate itself as a helpful tool for an inclusive democracy and nurturer of common ground. As one producer noted, “Though [viral marketing] screenings can create word of mouth, you’re essentially preaching to the converted.”
It is important to note that the “Long Tail” phenomenon and the viral marketing approach to distribution work well when a project is already completed, that is, when the production funds have already been secured and the project is delivered on budget. It is a strong source of back-end revenue, but not usually a sufficient source of production funding for the next project.
HOUSE PARTY DISTRIBUTION/PROMOTION
MoveOn.org has used documentary films to help organize house parties of like-minded citizens in communities across the United States. Earlier, Moveon.org worked with Meetup.com to launch house parties related to the 2004 presidential election. Meetup.com began in 2002 and garnered much attention when it became a core component of Howard Dean’s campaign for the presidency during the primary elections of 2003.
House party screenings began in earnest in 2003 when MoveOn.org worked with Robert Greenwald and his direct-to-DVD production “Uncovered: The Whole Truth About the Iraq War.” By the end of the year, MoveOn.org had held over 2,200 house parties. In addition to the screenings, the DVD was offered for sale via the Internet. Within a short period of time, nearly 23,000 people had ordered it.
In June of 2004, MoveOn.org gave Michael Moore’s documentary “Fahrenheit 9/11” a similar grassroots treatment, though the house parties were held with people who had agreed to see the film in theaters during its opening weekend. The Monday night parties focused on a live interview with Michael Moore. More than 110,000 people signed up and over 4,600 house parties were held.
MoveOn.org is not the only group to sponsor house party screenings. Others took up the house party approach to distribution and promotion shortly after the “Outfoxed” events. In early 2004, the Alzheimer’s Association held over 500 house parties in conjunction with the PBS documentary “The Forgetting: A Portrait of Alzheimer’s.” The producers of the film “Oil on Ice” (from Sierra Club Productions) held 1,800 house parties on what they dubbed “Arctic Action Day.” Robert Silvestri, of the Environmental Media Fund, told us that the project sold over 35,000 DVD’s. Also in 2005, Takebackthemedia.com launched house parties around its documentary “Rove’s War,” which it describes as “the Definitive Chronology of the Rove/Plamegate outing in DVD format.”
In 2006, Robert Greenwald’s company, Brave New Films, began distributing a film by two documentary filmmakers from Texas. The film is called "The Big Buy: How Tom DeLay Stole Congress" and it will be a direct-to-DVD release, promoted with house parties.
To date, perhaps the most effective house party distribution/promotion example comes from Robert Greenwald’s documentary about Wal-Mart, “The High Cost of Low Prices.” Brave New Foundation (affiliated with Brave New Films) reported that 100,000 DVD’s were sold in the first month, and over 9,000 house parties were held (see sidebar on “Measures of Success”).
Other highly organized house party screenings include:
“Coffee with the Taste of the Moon" house parties organized by Organic Consumers Association in conjunction with World Fair Trade Day.
“Take the Flame! Gay Games: Grace, Grit and Glory” house parties arranged in 2005 by the international group Federation of Gay Games.
“The New Heroes” house parties promoted by the Skoll Foundation, whose Web site declares, “Have a Party & Change the World.”
“Freedom Files” house parties.The American Civil Liberties Union is working with Active Voice and Brave New Films to hold house parties around the country in conjunction with this Court TV-based series.
“Operation Eagle Strike” house parties. The Web site rightmarch.com recruited 3,000 people to hold house parties to view this 20- minute film about conservative students who infiltrate an anti-Iraq war rally.
HOUSE PARTY DISTRIBUTION/PROMOTION CONT.
CONCLUSIONS: After World War II, women who had been employed in a variety of occupations were expected to “get back into the kitchen.” While postwar business was booming, women were largely kept out of the marketplace. In the late 1940’s, a retailer named Brownie Wise developed a direct marketing strategy for selling plastic food storage containers. Tupperware parties were held in the home of a host who invited friends and neighbors to view and purchase products.
The documentary house parties are a descendant of this marketing approach. Most of the documentaries that garner attention and direct sales of films through the house party/Internet method of distribution are those that do not have traditional distribution options. Controversial films that are kept out of traditional distribution in theaters or on television (or choose not to seek such distribution) benefit the most from this viral marketing approach. And sales of DVD’s made directly to consumers either at the parties or online offer a significant return to producers (relative to the traditional distribution method).
The obvious limitations of this approach are that attendees are usually already loyal to the cause being presented, and the film itself is inevitably being viewed as an advocacy tool rather than a spark for reflection and deliberation. Additionally, we have not found evidence that new organizations or associations develop when strangers get together for these house parties. “The High Cost of Low Prices” received an enormous amount of press attention in part due to the large numbers of house parties and public screenings. This model may be replicable with certain subjects, but as a phenomenon attracting press attention, it seems unsustainable.
While this method of distribution is not a solution to the challenges facing social issue media producers, the lessons of involving the public, using the Internet, and direct-to-consumer/citizen sales are refreshing and worth using.
Royalties
Unlike direct sales, which enable the producer to earn most of the dollars from each unit sold, a more traditional approach is for the producer to sign over video sales rights to a video distributor. One advantage of this approach is that it requires very little from the producer – the manufacturing, design, packaging, promotion, order processing and returns are all handled by an institution established just for this purpose. The disadvantage is that the producer earns only 15 percent of the net receipts, or $1.87 on a DVD that retails for $25.00.
For years documentaries have been sold at a premium price to educational institutions for classroom use and institutional screenings. This market is quickly diminishing. Eddie Wong, executive director of NAATA, notes that in 2004, sales revenue through institutional purchases declined by 35 percent.
NEW DISTRIBUTION STRATEGIES
Web-based Rental Services – Beginning in 2004, the PBS series “POV” began distributing many of its documentaries through the 2-million-subscriber company Netflix. Each film is available to Netflix members the day after its original broadcast. Most of the films are available for rental exclusively through Netflix for the first 45 to 60 days after broadcast. American Documentary (the producer of the “POV” series) has also arranged with Netflix to make available older documentaries that are rebroadcast under the name “True Lives” on select public television stations. The producer is given an advance from Netflix (between $5,000 and $9,000) for the right to rent the film. Additionally, the films are made available for sale through Docurama (and the producers earns a royalty on each sale). Typical royalties are approximately 15 percent of net. One analyst described this model as the “see it, rent it, buy it” model.
Digital Theatrical Distribution – Digital technologies allow for new distribution and exhibition opportunities that make it efficient and affordable to bring specialized films to digital theaters in small venues that are not served by independent theaters. By eliminating the cost of prints and shipping, this method does away with the most expensive component of theatrical distribution. Emerging Pictures has created a network of digital theaters in nonprofit arts and science institutions (and old movie theaters) and has begun distributing first-run independent films, documentaries, international films, children’s programs and educational programs. They are working with these institutions to create local “calendar houses” with a goal of 400-450 screens. This would offer significant reach in emerging media markets and the potential for outreach and community impact and promotion for DVD sales. With interactivity comes the possibility of folks in different communities talking with each other and the filmmakers after the screenings.
Subscription Clubs – A new initiative, entitled Ironweed, is offering socially relevant films-of-the-month to club members. For $14.95 per month, members receive a DVD containing one feature-length political film (often a documentary) and a few shorts. Ironweed pays participating filmmakers a flat fee based on the number of films sold, as well as a share in subscription fees. This approach bypasses the theatrical distribution hurdle that many independents face. As the Christian Science Monitor noted, “In order to serve increasingly fragmented interests, subscription clubs now cater to ideologies and specialties.” Ironweed is a progressive, left-leaning aggregator of films. Counterparts on the right side of the political spectrum are emerging as well. For low-cost, niche-market films, this approach is promising. For social issue media films that seek to address a broad public, the club approach seems less promising.
Multiplatform approach – Although there is currently little money to be found in producing for multiple platforms, it seems likely that multiple-platform programs will appeal to a broader variety of consumers, will generate unanticipated uses of the media and, one hopes, will be correspondingly attractive to funders because of the additional reach. Funders have expressed enthusiasm in seeing projects being posted in short, downloadable video formats on the Web, shorter-message formats for cell phones, and versions for video iPods as well as enhanced versions for DVD release. The multiplatform approach seems inevitable. WGBH’s Tom Koch told us, “To survive, work must be repurposed and reversioned.”
Not-for-profit Cable and Satellite (Link TV, OneWorldTV, CurrentTV) – To date this distribution method earns little or no direct revenue but increases distribution and indirectly increases unit sales. A producer could prepare a broadcast version and then alternative cablecast/Webcast/podcast versions of a social issue media doc. If the producer were selling DVDs, this could help increase revenue.
NEW DISTRIBUTION STRATEGIES CONT.
Web-based Distribution – MediaRights.org has led the way in Web-based video distribution for very short social issue films. Its online catalog plays an invaluable role for people searching for social issue films from a variety of distributors. Its Media That Matters Film Festival distributes a collection of sixteen shorts through online streaming as well as through traditional DVD distribution, screenings and broadcasts. Distributing clips of broadcast-length social issue films offers promotion as well as spreading the message of the film. Another distributor that takes orders on the Web but prints DVDs on demand is Indieflix.com. This company offers producers nonexclusive distribution contracts and pays them one-third of the gross. eIndieflix.com sells DVD’s on demand for $9.95. Customflix.com offers producers a similar service. Docurama, as mentioned earlier, is also a well-known distributor of documentaries in packaged DVD format (it carries docs from “POV,” the History Channel, IFC,and Arts & Entertainment, among other sources). A Canadian Web site, www.cineclix.com, will distribute downloadable documentaries that have been shown in film festivals. Cineclix.com charges customers 99 cents for downloads less than 30 minutes and $5.99 for those over 30 minutes. The producer earns 40 percent of all revenue. Former CPB executive Katie Carpenter believes that soon “you’ll be able to pay 99 cents for a doc for a month” (note: this interview took place shortly before Apple announced iPod video downloads for $1.99.)
Web-based distribution is beginning to blend downloadable video sales with DVD sales. Because of this, Peter Broderick, of Paradigm in Santa Monica, urges producers to hold on to the rights for selling DVDs from their own Web sites. Broderick told a reporter in a January 2005 issue of RealScreen:
“The key is negotiating a per-unit purchase price from the manufacturer of no more than $5.00” (wholesale is typically $12.00). “It's costing them about $1.25 to make that copy, so they're making $3.75 on the sale to you,” he adds. In turn, if filmmakers sell the DVD for $20.00, they'll make $15.00 to $17.00 profit per unit rather than the typical $2.00 per unit. Additionally, interfacing with purchasers allows filmmakers to gather information about their audience while cultivating a relationship with it.
In this vein, Boondoggle Films has had success with its documentary “Aardvark’d.” Boondoggle signed with Google Video, allowing the film to be downloaded for $3.99. Boondoggle also sells the film in a DVD format (for $19.95) on the Boondoggle Film Web site (as well as a CD soundtrack).
