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

by Anne Thompson
June 16, 2012 1:18 PM
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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…

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More: Festivals, Festivals


  • geraldine winters | June 19, 2012 9:24 AMReply

    Indies' and their unique visions and artful ingenuity are sorely needed to offset the cliched' recycled drab plot lines that are fed to the audience, studios promoting a product thinking FX makes up for a one note bore of a story! That is why only big action or kids cartoons are being seen. No one wants to see that dumb love story or half rate comedy and waste their time and $.

  • David Thrasher | June 19, 2012 12:10 AMReply

    Although I agree with Mr. McGurk that there is much about this digital revolution to give hope to independent producers, I did notice two issues that weren't addressed:

    Who exactly is going to control this new digital pipeline into movie theaters? If the only distributors with access to it are the same ones dominating traditional distribution on film, any potential opportunities may be only through them and any potential profits through the savings may be negated by the same sort of distribution fees that make it so hard for producers now.

    The other issue, as far as theatrical distribution is this: Distributors are still taking a very large percentage out of the gate receipts. 80% during the first week is typical. Exhibitors have been forced to make up the difference with increased concession prices. The combination of this with generally high ticket prices have caused most people to stay home and the trend has only continued over the years. When was the last time you saw a line in front of a theater for any movie - even the big tentpole franchises?

  • Clorine Jackson | June 18, 2012 2:44 AMReply

    Thanks for the speech Chris, it was good to hear you speak positively on the subject and I agree with you as one of the people who didn't want to go see "The Avengers", I like to see films like Scott Hicks "The Lucky One' here in Australia. I'm a writer and go to see Indie films when I can, and I hate it when I go into a cinema and see so many empty seats. I loved watching "Samson and Delilah" the aboriginal love story, and another I can't remember the name of about an elderly Black African tribesman who wanted to go back to school and get an education. It had soul! I also enjoyed Johnny Depp in "Dark Shadows" recently and I think it's good to have such diversity in cinemas. As a writer who is always struggling to get somewhere, it's good to know that you are of the opinion that Indie films are needed!

  • MA | June 17, 2012 6:42 PMReply

    Most indie filmmakers still won't have their films screened in traditional theaters. For those that will be able to that is wonferful but it's still a small share of the overall group. For most indie filmmakers their market is still home video where a lot of distributors are looking to take advantage. What digital distribution means is that indie filmmakers no longer need distributors when it comes to home video. They can do the final piece of the process for their film themselves. And in doing so avoid being ripped off financially and actually have gross sales that reflect the actual gross sales. Without being sold a bill of goods. #1 problem indie filmmakers face when distributing to home video - the honesty and integrity of many of the distributors.

  • Paul Bright | June 18, 2012 12:09 AM

    Bingo. Except as indie filmmakers we still can't access some of distribution outlets such as Netflix or iTunes without a distributor. I can manufacture the DVD (and do), I can put it on streaming sites, I can market the hell out of it. But I still need a distributor to reach most cable channels and wholesalers who put it in video stores.

  • JC | June 16, 2012 6:45 PMReply

    Finally. Someone "entrenched" in the industry (i.e., a suit) who isn't spreading fear. Refreshing, actually. And you know why? Every single doom & gloom prediction of the past few years has been absolutely WRONG, including Mark Gill's infamous comments 4 years ago. (At the same festival, in fact.)

    Indie film will never die, just as American ingenuity has never died (and will die).

    J. Courshon
    "THE SECRETS TO DISTRIBUTION: Get Your Movie Distributed Now!"

  • JoeS | June 16, 2012 6:19 PMReply

    It's great to be hopeful, but this speech oversells the effect Digital will have on the industry. A lot of these supposed advances are just new ways of selling old wine into a new digital bottle. And, to paraphrase Neil Young when he talked about music on CD's - this is the first time that a new generation of technology is of lesser quality than the one before. Digital is cheaper, but it still doesn't have the resolution of properly photographed and projected 35mm film.

  • Laurie Kirby | June 16, 2012 5:17 PMReply

    This is the best piece I have read on the state of cinema in a very long time. Kudos to Indiewire for posting it! And Chris, your kids are wrong. You are very cool!

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