My 7 stage plan for the film industry

<Image Last Curtain is Falling by Alex//Berlin http://flickr.com/photos/15082599@N08/2710899029/>

Alan Parker, Kenneth Branagh and assorted British film people wrote an open letter to the Times warning that piracy is undermining the creative industries. On the radio yesterday I heard the producer of Quantum of Solace stating how in the far east they don't make any money on DVD sales because everyone watches illegal copies. He bemoaned all the promotion and distribution costs they have to bear.

Sigh. They still really don't get it do they? They have one model which they keep returning to, again and again. They're supposed to be creative, so get creative about your own industry. Interestingly, they put forward the opposite argument back in the 1980s when home video first came on the scene. Then the argument was that it would detract from cinema revenue and result in the collapse of the film industry. Then they realised that they could make as much, if not more, money from video rentals and sales and now they see it as some hallowed right to retain. Just as they were slow to understand the potential for home video so they are being slow to appreciate what the online world offers. Their only response to the internet at the moment is to think of it as another distribution medium - DVD online, for the same fee.

So, if any executives want to hire me on an expensive consultancy, here is my seven stage plan for what they should do.

1. Accept the inevitable, don't fight it. When content becomes digital it will be freely distributed online. It's not as if they haven't had enough advance warning from the music industry about this. So don't waste your energy in trying to invent ever more restrictive DRM (which some teenager will hack the following week), or more aggressive legislation (which alienates your audience and can never be fully effective), or putting political pressure on Governments (who understand the issue even less than you do). Instead put your effort into finding a workable solution in the new landscape.
2. Look at some of those costs. Distribution? Packaging? They're going to disappear. Marketing? Will need to be redirected. Actors? Well, maybe they are demanding $20million per picture because they know the profits you are making. If you're making less, they'll get less. A lot of your current costs are based on your current model - the model shouldn't exist just to justify these costs.
3. Be the iTunes of film. Develop a super- cool, massive bandwidth, good social interaction site with a huge database.
4. Make downloads or streaming cheap enough that some people will pay over downloading pirates eg. $1 a film. 
5. Use advertising. Make downloads free, but with some obligatory, can't be skipped adverts at the start.
6. Offer subscription service which gives extra functionality - commentaries, webcasts from the crew, sneak previews, invites to pre-screening, etc.
7. Make the cinema the experience - films still have the cinema as their main source of revenue. This is not a zero-sum game: A lot of people who download a film have either already seen it in the cinema, or wouldn't go and see it there anyway. Not every download is a cinema seat lost. Cinema going is still a social activity (what else would teenagers do on first dates?), and they should utilise this even more than they do currently.

Comments

[Jo Badge]

Watching traditional media panic at rise of the internet is good fun for a while but does indeed get frustrating. We went to watch quantum of solice at our fancy new cinema de lux in Leicester and it was a great experience - their directors lounge is the way to go (though pretty expensive), fancy leather seats, limited numbers, direct access to the bar - fancy version of other great art-house type cinemas (phoenix and the fabulous savoy in nottingham complete with double love seats and original bar)

[mweller]

Jo - yes we've got a Gallery at our Odeon which is similar. Free snacks! Plus you can take a drink in with you. Very civilised. It almost (but not quite) made Sweeney Todd bearable

[Phil Greaney]

Games consoles have taken to new models quite well and report some success. Both Xbox 360 and PS3 offer film rentals through downloads, and some films you can buy there.

Interestingly, and not coincidentally, both formats have switched to a 'Second Life'-style virtual environment. In the PS3 version you and your avatar can go and watch movies in the virtual cinema (there are only trailers at the moment, but movies are expected). Here, the online world attempts to succeed by approximating the 'real' world. Strange business, eh?

I think films there are relatively pricey still, but then I'm a cheapskate (who used www.someecards.com for all his Christmas cards this year).

[Claudia]

Anyway, if the majors think people do not go to the cinema because they download illegal copies they are quite wrong. I go to the cinema perhaps once a year and just as sort of "social event" (often an evening out with colleagues). The reason being that I find 9 euros ticket (where I live) for one movie outrageous. I normally wait for the DVD to come out and go down in price, normally around 8 euros after one year from the cinema release. Then not only I watch it with my husband but also loan it to friends and family and so they do as well, so let's say that in a group of 4 couples the "price" go down to 2 euros per couple. The only movies I download are the ones available legally on line because the copyright expired for example (for example from www.archive.org)
If the majors think I or other people are going to pay such a price to go to the cinema so they pay their actors milions of dollars they can think again. This is my explanation of why less and less people go to the cinema!

[Michael Palombo]

Great post and all good points, but Know real viable model being offered or provided that's going to put filmmakers first and pay the filmmakers first, and yes pay-per-view streaming video should be cheaper. But for right now somebody has to pay for the stream, and if the content is good enough I think people will pay 2 to 3 bucks to see a great indie film on your big screen tv, and if you like it enough you might even purchase the DVD just to say you own it. There is one working model that http://fansoffilm.com offers, I think if filmmakers and fans got behind would change everything. One that does put filmmakers first, and the filmmakers makes all the profits. Fans Of Film is a site that uses high quality paypal streaming video that filmmakers manage just like a YouTube account in a Ning social setting. Really Fans Of Film is taking what indiegogo.com has done, but taking to the level of actual distribution. Even though Fans Of Film is only a mouth old and still in the development and designing stage, Fans Of Film is making waves on twitter and already has some films.
http://twitter.com/fansoffilm

[jeff paul internet marketing]

really a nice post .