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LAFF Keynote Speaker Cinedigm CEO Chris McGurk: Production and Distribution Revolution

Photo of Anne Thompson By Anne Thompson | Thompson on Hollywood June 16, 2012 at 1:18PM

Continuing an honorable tradition, CInedigm Chairman and CEO Chris McGurk, who has been around the block a few times, from Disney/Miramax and Universal to MGM/United Artists and Overture Films, gave the Los Angeles Film Festival State of the Independents keynote speech Saturday morning. He sees this year as a watershed transition to digital: we are in the middle of a production and distribution revolution, he says.
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But if exhibitors want to really fill their lungs with the fresh air of independent film, I believe they’re going to have to consider revising some of their policies. Until now, exhibitors have uniformly opposed narrowing the window between the time movies are first released in theaters and the time they go out on DVD. I agree that this window should stay firm for wide-release studio movies. However, it is actually in the interests of exhibitors to now allow shorter windows for those indie films that are released on only, say, 250 screens. These films need quicker transition to ancillary markets in order to survive.

So, exhibitors have a choice: They can either stick to their current policies and, as a result, not get these smaller films at all because most will go straight to DVD … or they can adopt a more flexible approach and open up their doors to a whole new stream of independent content.

Which brings me to the Fifth Sign of the Indie Renaissance: Narrowcasting.

The fact is that, for the right program and the right price, those empty seats can be filled and that popcorn can be sold.

Everyone’s talking about the record-breaking performance of “The Avengers.” An incredible 22 million people in the U.S. and Canada saw the film during its first week. But that leaves 323 million people who didn’t!

I saw it. It’s a great film and it deserves all of its success. But there are a whole lot of people who aren’t so excited about watching highly pain-tolerant men save the world. They are instead interested in a wide variety of other subjects that they’d like to see up on the big screen.

For example, look at the success of live, digitally-delivered productions of the Metropolitan Opera, which have been booked into targeted theaters near where opera-lovers live. Or, at the other end of the branding spectrum, there is the Kidtoons series, which our company distributes, that are targeted to children and their families and play exclusively at weekend matinees.

The creative possibilities are endless:  Action sports series, comedy nights, educational extension programs during the day, ballet, Broadway and other cultural programming, and so on. The idea is to fill seats by precisely aligning content with avid audiences in a communal setting.  
 
In essence, the strategy is to program a targeted digital theater footprint by day and daypart almost like a TV network.
 
And it doesn’t have to be top-down programming. There are innovative new services like Tugg, Gathr and Cinedigm’s own crowd-sourcing platform that allow people to vote online for content they’d like to see in theaters. Once enough people sign on, the movie is booked and seats get filled.

All of this will require a modification of expectations on the part of filmmakers. They have been conditioned to believe that getting “validation” for their films requires a release into more than 500 screens. That model rarely works anymore because it’s very unlikely there will be a financial return on the cost of the big national TV media buy that’s required to support such a wide release.

The new narrowcast release strategy, combined with the kind of creative windowing we saw with “Margin Call,” will get filmmakers access to more eyeballs under an economic model that is more likely to generate real rewards.

Of course, narrowcasting won’t replace blockbuster filmmaking. The 20 million people who want to see Avengers 10  during opening week can still get their fix. But there are millions more who want something else. And they want to see it together in a theater. We can give it to them.

The Sixth Sign of the Indie Renaissance complements the Fifth: Targeted Marketing

Once you narrowcast into a theater, it is invaluable to then use targeted marketing to make the right people aware that the right programming for them is in their local theater.

And the best tool for doing this is social media.

Or, let me put it this way – Those of you who bought the Facebook IPO, hold on to your stock. Social media is still the future.

And movie marketers have a big advantage in this space. Just consider old-fashioned TV commercials. Nowadays, millions of people speed through them on DVRs. However, there’s one kind of commercial for which viewers regularly hit the stop button on their DVR – ads for upcoming movies.

This is because everybody hates commercials, but everybody loves movies. That’s why people stop to watch the spots for upcoming films. And that’s why people will also stop what they’re doing on a computer or mobile device to click on an appealing piece of movie marketing.

For distributors, instead of spending millions on blanket TV ads and billboards, we can target our messages much more efficiently, so that every marketing dollar has a high probability of putting a butt in a seat or a download in the cloud.

And that brings me to the Seventh Sign of the Indie Renaissance:

More dollars …  and, by the way, more euros and yen and pounds and pesos and rubles. Because, make no mistake about it, the same hopeful signs that we are now seeing at work in this country are at work around the world.

I’m sure you’ve all heard the truism that cinema exists at the intersection of commerce and art. Well, I’m originally a numbers guy and, in our business, there’s a foolproof equation: More commerce equals more art.

Now, I realize that there are those who think that the business side of the movie industry is crass, and that auteurs should just be free to do their thing. But, even with today’s reduced production costs, film is still the most expensive art form on the planet … unless you count the $10 million being spent to lift a big rock into the air at LACMA, but that’s another story.

Other artists just need to afford the cost of their canvas or clay, and then they can go create their art in solitude. By contrast, independent filmmakers need hundreds of thousands or millions of dollars, along with the collaboration of many other talented people in order to express their art.

So, if you like the art of film, you should like anything that helps the commerce of film. And that’s what all of the other six signs of the Indie Renaissance do: They help generate more of the money filmmakers need to make films.

•    The first sign makes it cheaper to shoot a film,
•    the second makes it easier and more efficient to distribute a film on multiple platforms,
•    the third brings in bigger stars to act in a film and better writers and directors to create it,
•    the fourth addresses exhibitor demand for independent film,
•    the fifth makes it possible to narrowcast a film into high-yield theaters,
•    and the sixth allows for targeted marketing directly to the people most likely to go see a film.

All of these add up to a more profitable business, which inevitably adds up to a more productive and expanded business. Which means that, as in the first golden age of independent film that started in the late ‘60s and in the second one that started in the late ‘80s, all of you movie lovers will have more movies to love at the multiplex … or on your TV or your computer or your iPad … or other devices yet to come that will provide even more digital canvasses for today’s cinematic artists.

Because we’re dealing with a bright Renaissance and not a dark Armageddon, I’m going to depart from apocalyptic tradition and add an eighth sign.

It’s really nothing new, and that’s why it’s so important. I hinted at it when I was talking about marketing, and it’s simply this: People love the movies.

I know, I know … time and again, we’re told by the Sky is Falling folks that film is an antiquated experience that’s being crowded out by all the new entertainment options that keep emerging.

But think about it: When you see someone and are looking for a conversation topic, what do you typically ask – “Have you seen any movies lately?” Invariably, you get one of three answers:
•    I saw “The Avengers” and loved it.
•    Or – I saw  “The Artist” and hated it.
•    Or – No, there’s nothing in the theaters I want to see.
I maintain that all three answers are positive for our business, because all three embody the emotion we feel for movies. We either love them or hate them or we wish there was a film in release that would draw us into the theater so we could either love it or hate it.

Yes, people love the movies.
This is why the Oscar broadcast is still one of the highest-rated shows every year.
This is why magazine covers still feature movie stars.
This is why, even with our big-screen high-def, surround-sound TVs, we still want to go out to watch a movie in the dark with a bunch of strangers who BOND with us over the film… laughing, crying, being scared together … in a social experience that is almost tribal in nature.

So, I will confidently predict that we are about to see cinema history repeat itself yet again. In the past, whether it was the arrival of sound or TV or home video, each time new technology came on the scene, it was initially viewed as the enemy. Instead, each time it led to new paradigms of success. I am confident that the same will be true of digital technology … and the sky will continue to remain right up there where it belongs. As all eight signs are predicting … an Indie Renaissance is indeed on the horizon.

On that note, I can now officially say, thank you Sean and Josh for inviting me … it really has been a pleasure speaking here today.

Thank you very much.
And now, if there are any questions…
 

This article is related to: Festivals, Festivals


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