IFH 351: The Future of Making Money with Your Indie Film

Alex Ferrari 3:04
Now, it's no secret that, you know, the whole industry is really going through a major change right now. film, film distributors, film studios, everyone's trying to figure things out because that the landscape is changing almost on a monthly basis. In regards to streaming in regards to sell through DVDs, blu rays, SVOD, TVOD, AVOD, all sorts of different models are being tried. It is a crazy time. It's it's very much like the wild wild west and film distributors are having a hell of a time trying to generate revenue because the ways that they used to do it, which was just to go to AFM or sell huge territories or pre sales to get your movies produced or there's so many different things that was being that were being used before that are not as relevant today. You know, DVDs used to be the saving grace of this industry. We were they were just selling so much. We're making so much money on DVDs, and then blu rays that you know, it just stopped. You could always make money with the movie. Those days are gone. DVD sales are anemic at this point. Do they still sell Yes, but they've been in decline year after year, for many, many years. And now, a lot of people always talk about self distribution and like, that's the For independent filmmaking, and there is an element to that without question controlling your movie, controlling your IP controlling your projects. And the revenue that comes in for those projects is key without question. But self distribution is not what at all was what it was all cracked up to be, if this entire debacle with disturber has shown anybody, you know, you trust the company to put your movie out there. And if that company goes down, what happens to you your money's lost, you can't get access to your movie. You know, think about this, guys, do you think this is the only time this is going to happen? Don't you think that this is a possibility that we're going to be here again, five years from now with another company, or another huge distribution company that's happened before distribution companies have gone down, filmmakers have lost money, with distributors and with aggregators. Now, specifically, so I always find it very weird putting my hard work into somebody else's hands. I am an entrepreneur by nature. And I've been self employed a freelancer for most of my career, as I've said multiple times, I was fired from both jobs early on in my career as an editor, you know, because I, I just, it wasn't for me, I was very proud of my firings. So I can't understand the process of a filmmaker spending three, four or $500,000 on a movie, which is considered low budget. And after it's all done, they literally just hand it over to a film distributor, a sales agent, in hopes that they'll get some money back for it. Where in the world that we're living today, and moving forward, nobody knows anything. There are no guarantees anymore. There. You know, there's very little things that work constantly with every situation, it doesn't, it's not existent anymore. So by doing this by handing your movie over to someone who says, I know best, they don't know best, it's proven. Some of these big distributors, I'm not talking about the studios, they're in a different place. I'm talking about the independent world, many of them are just trying to make it work. They're trying to make it happen. That's why a lot of these predatory distributors, and even some very well known distributors, who will remain nameless In this episode, but are very well known in the indie film community are offering 15 year deals 15 year deals. Why? Because they have no idea how they're going to recoup their money that they spend, or they have no idea. They're even going to generate money. They're going to they're trying to play the long game. They're like, well, maybe between now and 15 years, we'll figure something out, while the filmmakers left holding the bag. That is the world we live in today. And by the way, guys, I want to make this very clear, all of the problems that independent filmmakers are having film distributors are having sales agents to generate revenue in today's world and model is happening in a fairly good economic time. We are still in a good economic time, we are not in a recession, or depression, or financial collapse or crisis like we were in 2008. And the years afterwards. So I hate to break the news to anybody listening. We're do we're actually late for another economic turn. We're probably a few years late. So do you think that this growth is going to keep happening in the rest of the economy that it's just going to be money, man, there's already indicators, saying, guys, watch out, something's gonna happen. It's something's gonna happen. And the way the world is today with there's so much uncertainty with, you know, things happening in Europe, things happening here, domestically in the US. It's just a very unstable time in many ways, but our economy seems to be holding up as of right now. But what do you think's going to happen to all of these distributors, sales agents, production companies, film aggregators? What do you think is going to happen to them in a huge economic turn? Let's say 2008 happened again, I'm not wishing it by any stretch. I'm just kind of sounding an alarm and it's not a conspiracy theory. anybody listening out there like, Oh, this Alex has gone crazy. He thinks it's a conspiracy theory. No, there is sound economic knowledge behind this. Look it up with there's a lot of indicators that are saying it and just on a historical standpoint alone. Things are it goes in cycles every eight years, every 10 years. There's some sort of economic downturn. So we're do we're late for our economic downturn. So it could happen tomorrow. It could happen in two years. But I think something's going to happen within these within that time. period, something somewhere is going to happen. So how do you think it's gonna affect us? How do you think it's gonna affect our industry? Do you think that film distributors, film aggregators, and sales agents, you think these guys are going to be able to withstand a 2008? Again, or God forbid something even worse than what happened in 2008? Do you? I'm honestly asking everybody, I want you guys to answer the question in your own head. What do you think's going to happen? Because right now everyone's having a tough time in a good place in a good economic environment. So what can we do? You know, I don't want to be doom and gloom and everything here. I wanted to bring this out. And I wanted to kind of put it out into the, into the ecosystem of independent filmmaking. So people start talking about this, because this is something that's going to really hurt all of us in the future. If we don't figure out how to make money, how to generate revenue from our film projects, we will not survive your dream of being a filmmaker. Your dream of making a living, from your art from what you love to do is in jeopardy, because the models that work before are not working now, two years ago, I was able to make 1000s of dollars through t VOD, selling, renting and selling. This is Meg. Those days are gone. The numbers from distributors that I've talked to, you could just see the absolute downturn of iTunes. iTunes is generating no money, barely any money for independent filmmakers for independent films. Are the studio's still doing well with T VOD, as of at the moment? Yeah, there they are. But I think that model will eventually go away as well. Right now, there's just not a lot of money being made in T VOD, where two years ago it was. Now the new thing is s VOD, and a VOD. That's where a lot of money is being made. If you put your money up your movie up on prime on amazon prime, you're going to probably make more money than if you put it up on you know, rentals and purchases though if you're going to do proper distribution, windowing and things like that. You could put it up for two, three weeks or a month for buying and renting to see if you can generate any sales. And after that you can put it up on on Amazon Prime because, again, the numbers and the data that I've been seeing is that money is being made more so on s VOD. And the new up and coming way of making money with films is a VOD, which is advertising video on demand places like to be. And the reason why is because people are starting to get tired of all these subscriptions. So they're just watching. You know, they get their ruku they they open up to b and they're watching movies or watching shows, and they're just dealing with the commercials. But that's where a lot of money is being made right now. But who knows what's going to happen in the next six months to a year that could dry up there's just always something there's always a new technology a new way the customers the customer is his his watching habits or their watching habits are changing. It's just so crazy. It there's so many things next year, we're going to have Apple TV plus Disney plus NBC Universal on I think Warner Brothers is coming out with one Comcast is coming out with their own. There's multiple big time streaming services that are going to be coming out how many of these streaming services do you think are going to people are going to pay for like at a certain point, it's going to be like 150 200 bucks if you get everything, which is actually much more expensive than your old cable bill, which is what everyone cut the cable for? Because they didn't want to spend so much on satellite and cable because it just got ridiculous. So I'm putting all this I'm putting this out on the table for you guys. So you can kind of see what where we are right now and where we're going. Now the thesis that I am throwing out there into the into the filmmaking community. The thing that I believe, to the core of my existence is the future of independent filmmaking is the future of the survival of independent filmmaking as we know it today. Is the entrepreneurial filmmaker, the film trip earner. There's no question about it. Because if you're able to generate multiple revenue streams from your movie, if one dries up, your whole revenue is not dead. So this is the problem and it's this is this is economics one on one. This is investing one on one, you should never put all your eggs in one basket. You need to diversify your portfolio you need to diversify your revenue streams. So when you hand over a movie, wholeheartedly to a distributor, which is great. And there are, like I said, I've spoken about many great distributors out there that do good work. And they are, they can be a part of the model that I'm about to present to you. They absolutely could do things because they, you know, people like indie writes and filmhub. And these kinds of distributors are great, and they can get to places that you can't get to in a self distribution model. You know, you cannot get into 68, English speaking territories on Amazon, Amazon primer for rental or, or purchase, you just can't buy yourself, even if you upload to Amazon by yourself, you know, to direct amazon video direct, you get to territory's three, I think at tops. So there are benefits with working with a traditional distributor, but as part of an entire ecosystem. And that is what I'm presenting to you. So with a movie, you have to look at it as a complete ecosystem, how can I generate revenue from this movie, you can't just look at it the way we've been taught for years and years and years, the old model is dead. The old model is not built for us. It's not built for independent filmmakers the model of make a movie, give it to a distributor and pray that you'll get paid one day, that model doesn't work for us. It might work for the studios, because they're the studios. And they have their own infrastructure. And they have their own distribution. So it works for them because they controlled their entire ecosystem. globally. Globally, Disney has distribution in England and in Europe, in an Asian there, they have it all. So they can make things like that work. We can't, we're dependent too much on outside, outside companies outside sources. So you have to diversify your revenue streams. So there are multiple ways of doing that. And I won't go into every single detail in this episode, but I want you to start thinking about how I can how you can generate more revenue from your films. And I argue that this conversation needs to be happening at the beginning stages of your movie. At the very beginning stages of your movie, you need to start thinking how am I gonna be able to make money with this. And that's the problem with a lot of artists like myself and every filmmaker, we don't want to think about that. We just want to make our art. And hopefully we'll get some money back at the end of the day. And that's great. But unfortunately, our our canvas and our paint brushes are too damn expensive. Okay, we're just too expensive. So you have to think you have to think about the economic impact of what you're doing. If it's your money, you don't care, God bless be an artist. But if it's somebody else's money, my God, you better have some sort of fiscal responsibility to that investor, or to the people who believed enough in you to put money into whatever you're doing. So I'm sure you ask Alex, how do you create more revenue with your movie? If you're smart about how you present your movie, if you're smart about how you put it all together, how you position the project, who is your niche audience who is the audience that you're focusing on? And you can start creating products for that audience based on your movie products, like obviously, the low hanging fruit, t shirts, hats, things like that. You can use the like I use this example all the time if you're making a horror movie, and you've been able to to build out a community around your horror film. Would it make sense that if you made an 80 slasher film, that you would make a hat that says I love 80s Horror, like Drew marvic did with his film bloody massacre, bloody pool massacre Pool Party massacre, I forgot which one I think is bull berry massacre. He was able to do that he was able to create multiple product lines that still generate revenue for him. Is he retiring off this? No, you don't have to. That's not. That's not the way business works. So many filmmakers think that they have like every one movie is the lottery ticket that has them put them away for life. Does that happen every once in a while? Sure. Once every decade. You know seriously. People still bring in a paranormal activity, people still bring a Blair Witch or a mariachi for God's sakes. Those are outliers. Man, they're not what that's not the way it works for every Uber or for every Airbnb that explodes or beyond meat. Now with the plant based burgers for every one of those companies, there is 1000s of now hundreds of 1000s of companies who try and fail. And there's also 10s of 1000s of companies who are able to generate revenue and build and support their families and grow and some of them will grow to massive scales, other of them We'll stay making money for many, many years to come. And that's how you have to look at it, you have to look at this as the long game, guys. We'll be right back after a word from our sponsor. And now back to the show. You have to look at this as the long game. So you can start building revenue by creating different product lines. So low hanging fruit, t shirts and hats. How about online courses, you can build out for different things, educational products, you can build out based on your niche, a specific product lines, like if you had a swimming documentary, you can create. You can create swim cat swim caps, that are specific to that audience that have your logo on it, people will buy that. If you have a spiritual movie or spiritual documentary, does it make sense to build out meditation products, yoga products, things like that things that that audience would be interested in? Sure, how about building out services, or selling services like Brad Olsen, the filmmaker behind off the tracks, which is a documentary about Final Cut Pro X, for God's sakes, you know, not a very broad spectrum movie. But hell, he was able to make not only money with it, but he's able to sell his services, he's able to establish himself as a thought leader in his space in the world of editing. And he's been able to generate revenue by getting gigs, it doesn't all have to be so black and white, you've got to think creatively. And this by doing what I'm telling you guys, if you start thinking like film intrapreneurs, you are going to be in much better shape. When something happens to our industry, when something happens economically or an economic downturn, or something happens, you will be more resilient, your projects will be more resilient, because you're diversified. And if you're able to do 234, or five of these kinds of projects, and own all of them, put them all in your portfolio. And you're able to generate multiple revenue streams from all of these projects. And I'm not talking you have to have half a million dollar movies. Look at me, this has meant cost me I think between five and eight grand somewhere along those lines. And this end on the corner vehicle desires cost me around three grand. And I'm able to generate revenue from both of those films and continue to generate revenue from them multiple sources of revenue from them here and they're doing different things. I'm talking about them right now on this podcast, which has helped me generate revenue through my sponsorships. There's so many ways you have to think about how you can make money with your movie. And I know out there, there's right and I've already had these conversations with filmmakers. They're like, Oh, Alex, I'm a filmmaker, I don't want to think about building an online course for my movie. Great, don't if you don't want to don't go with God. Godspeed to you, my friend. If that's not what you want to do, don't do it. But don't complain, when you're not able to generate revenue in the old model. Don't complain when you're never able to make another movie again, because you didn't think of the economic, the economics behind what you're doing. If you're thinking about making movies purely as an artist, understand that that revenue, the money that you're the budget that you're putting into that money is at risk, it's a risk anyway. But if you're cool with that, then Godspeed man, I'm not telling you, you have to do anything. But unless you have independent sources of income, first of all, and independent sources of money that can finance all of your creative endeavors, you're gonna have to figure out some sort of business model that's going to be able to sustain you throughout your career. Again, if you're rich mommy and daddy's paying for it all the time, God bless, man, you got a trust fund, do it. You made a lot of money in real estate, and this is what you want to do. Now you don't care about making money. They're cool. Fine, but for the rest of us. We're trying I'm trying to put out a model I'm trying to put out a method of a way for filmmakers to make money real money every month. If it's $5 here, $20 there $100 here $5,000 there every month coming in. That's what I want. For every single filmmaker, everybody in the tribe that wants to make a movie. That's what I want for you. To make a living doing with what you're doing what you love to do. making a living, not being super wealthy, not living in the Hollywood Hills somewhere or in a mansion or driving or flying out and private jets. sure if that happens, great. But if it doesn't, can you put food on your table? Can you pay your rent? Can you support your family Or yourself? And can you do the art that you want to do and you can you make, and that's what you dedicate your life to, is just doing your art. Man, I think that's a win. I don't know about you, but that's a win for me. You can get paid to do what you love to do, and support your family and make split a little money away and, and pay the bills and do what you love to do, man. Isn't that the dream? And wouldn't it be amazing that when you make one product, that product still generates revenue for you years down the line? It just continues to generate revenue for you if you set everything up, right. And then as new technologies come up, and new opportunities come up to generate revenue, you can bring that that out of your portfolio and start creating other revenue sources again. You know, who does this guys, the studios. I mean, look at Disney, Disney is still making money with Snow White, every single day. Someone somewhere in the world is buying a T shirt, or a product that has Snow White on it, or is bought the movie rented the movie, or is watching it on a streaming platform is somewhere probably going to be on Disney plus. But they're still generating revenue off of their entire portfolio, their library of films. Why can't we do something similar? The world is in a place where we have more access than ever before access to affordable technology that makes our films look very high quality, much more so than years ago. So we have access to affordable high end cinema production. We have access to the consumer. We have access to the consumer we can self distribute our films. Or we can partner with strategic partners, like film hub, or indie writes, to help us get the movies out into certain platforms where then we can in turn, use that momentum to sell ancillary products or services. It's here guys, we can do it. You have to also understand marketing you have to understand crowdsourcing crowd, crowdfunding, possibly audience building social media, networking, social media, marketing, all of those things. These are all elements that a film shoprunner needs to understand. You might not have to be perfect at it. You can hire people to do it, but you need to be educated in every aspect of it. This is the new world guys. This is the new world for independent filmmakers. The world that I was raised in the world of Robert Rodriguez, Quentin Tarantino, Richard Linklater, Kevin Smith, john Singleton, Steven Soderbergh, in the 90s. Growing up in the Sundance era, or in the film festival era, those filmmakers that time is gone. Just like Scorsese, Coppola, Spielberg, Lucas De Palma, melius, that time is gone. Those were windows of time that are gone. Now. The window that we're in right now is the era of the film trip earner, the era of the filmmaker who knows how to generate revenue with their films, outside of this legacy model that is not built or designed to benefit us in any way. Before you could throw a movie star on a poster and sell it. Those days are nil to none. I mean, Brad Pitt just opened a movie a week or two ago. Brad Pitt, one of the largest, biggest movie stars in the world. I'm a huge fan of Brad Pitt. But you know what? Downton Abbey beat him Downton Abbey British movie about? I don't even know because I'm not downing on the fan. But it's like, you know, very British things in the castle. And they beat them with no major stars in it. Why? Because it was a niche. It's a niche audience, an audience that was passionate about them passionate about that TV show. And that overpowered any star power that Brad Pitt might have had. So those days are not well, I mean, you could put Tom Cruise in a movie. You could put Will Smith in a movie. There's there's a handful there's not many of these, these these movie stars around anymore that really do any major things. I mean, everyone talks about Robert Downey Jr. Robert Downey Jr. who is amazing, but you put him outside of the Iron Man suit. It's a challenge. He's had movies outside. Same thing with Chris Evans. Same thing with Chris Hemsworth. All of the guys of the Avengers, you put them outside of the the Marvel Universe and they don't have the same impact. So that model is not what it used to be, I remember that you could put Arnold Schwarzenegger, Sylvester Stallone on a movie, and a guaranteed $30 million opening weekend, just purely because of their face. Those days are gone. These models that we were raised with these models that we grew up with are no longer valid, especially not valid for independent filmmakers. You have to think differently, you have to think outside the box, you have to think like a film trip earner, you have to think about how you're going to make money with your movie, if you intend to move forward and make a living doing this. I want this to become a movement, I want this to become the law, just like the French New Wave, just like Sena Verity. Just like all these different kinds of movements in film, I want film shoprunner to become a movement, the movement of one filmmakers took control of their own destiny, and started to make the art that they wanted to make without any interference from outside sources, and able to self sustain their own career. And imagine the art that we can create as a community. If money was not as big of an issue, as it is today, if we can create businesses, we can create systems where we can just generate movie after movie, doing whatever we want, aiming it at a niche audience, because by the way, the future is not broad guys, for independent filmmaking, if you're not making a movie for a niche audience, for an audience that's specific that you're trying to target that you can actually target. And don't tell me romantic comedy is a niche, or horror by itself is a niche, it's too broad. You've got to go down, you've got to niche down. And I explain all of this in my new book, and I'll talk about the book again in a little bit. But there's, without understanding that concept, you will lose I think the feature I think in general, the whole industry is going to go towards a a curated niche style of content delivery. Because look at Disney plus Disney plus, which is coming out next year is going to be arguably a niche. Anybody interested in Disney Star Wars Marvel, Pixar, or National Geographic style shows and movies. Those are five niches all under one complete package, which is Disney plus, they're not going to be doing massive giant, you know, horror movies or act that's not the brand, they're going to be aiming at the family niche. Now that's a very large niche, but they're Disney, they can do something like that. These very broad broad services are going to have a tough time. I don't know what the future is of Netflix, they're spending a heck of a lot of money on original content. And they're doing great work. And they're allowing filmmakers to do cool stuff. We'll see. But unlike Disney, Netflix has, arguably one revenue stream that's all that company really has is one revenue stream, which is subscriptions. So if the fit hits the Shan and subscribers go down, the company goes down. Sure they have some merchandising for Stranger Things and some other shows. That's nothing comparative to what their main revenue stream is, which is subscriptions. But Disney is so diversified, through 1000s 10s of 1000s, hundreds of 1000s of products and revenue streams throughout its entire ecosystem. That if Disney plus folds, they could take a hit. They're fine because they're diversified. So be aware of that. Be very, very careful about that same thing happens for any business that is dedicated on one revenue stream in one revenue stream alone, there is a potential for it to go down. So these film aggregators, if their entire business plan is based around film aggregation, selling those services, if for whatever reason, that dries up, those companies go down. They go down and they take anybody with them. They take anybody that signed up with them down with them, it happens with distributor, it will happen again we will be back here again in another flavor. within the next five or 10 years it will happen again. So if you have a diversified revenue stream portfolio, if you will, based off your movies, if money coming in from rentals and sales and s VOD and a VA dry up for whatever reason. You're still able to generate revenue from other places. How my first little short film broken, I'm still making money with. I got so many I built an entire post production company based around a short film in 2005. And completely was focused on independent filmmakers of like micro budget and low budget filmmakers doing visual effects editing, color grading, post, supervising all that kind of stuff for them, I built an entire business that kept food on my table and my rent paid for over a decade like seeing what, 15 years now almost 14 to 15 years that kept food on my table off of one short film, because I diversified my revenue streams. That is kind of the origins of being a film entrepreneur. For me. That's when the model was created in my world. So I hope this episodes really kind of woken you up a little bit, and I really hope it shakes you. I really do this is one of those semi tough love episodes, because I don't want to see what's happening out there right now to so many filmmakers, because of this distributor. Horrible, devastating situation, I don't want to see this happen. Again, I don't want to see everybody put all their eggs in one basket, I want them to be able to have a diversified revenue plan for all of their films, and to think of it in that manner. And if you don't want to do the work, I'm sorry, this is just the realities of where this is going. If you don't want to do it, like I said before, don't do it. But you'll be better positioned, being a film entrepreneur, than you will be just being a filmmaker. And working in the old legacy model. I hope this makes sense to you guys. I hope you take no offense to it, I want you to use this, these ideas to help you on your path. So I've put all of my ideas down in my new book, Rise of the film intrapreneur how to make your independent film into a money making business. It's coming out in November, early November. I've already handed it over to my book editor. She is working on it feverish Lee. And we will be releasing it in November after my bootcamp. So that book has it's an entire blueprint on everything I've talked about, I go into real deep, deep ideas, methods on how to do this and include multiple case studies, of filmmakers, and film entrepreneurs who are using these methods and are making some making a good living others building empires with literally million dollar empires off of these concepts. So I really do hope that you, first of all, I hope everybody gets the book. And I'm not just doing this as a sales pitch. I just hope it helps. I really do. If you want to preorder it, just head over to www dot film biz book.com that's film bi z book.com. It's available on Amazon for pre order, it will be available everywhere else after it gets released. Or you can go to the show notes at indiefilmhustle.com/351. And I'll have links there plus links to shows and episodes. Talking about being a filmtrepreneur talking about predatory distributors talking about film aggregators, and all the things that we're, we're dealing with. And by the way, we're gonna have some amazing interviews coming up in the next week in regards to distribution, self distribution, the the whole film aggregator debacle with distributor, and all of these things, I'm going to be having a very deep conversation with some special guests coming up in the next week or so. So I really hope you guys listen to that. This is such an imperative conversation to have right now. And this is such an important time. We are at I feel were at the edge of the cliff right now. And it's our job as filmmakers to figure out how to take control of our own destinies. I've done that most of my life by being a freelancer, business owner, and now running indie film, hustle, bulletproof screenwriting, filmtrepreneur and all the other companies that I run, you have to create your own thing, you have to create your own revenue, take control of what you're doing, take control of your art form control of your business. I've said it 1000 times on this show and I'll say it again I've stolen this line from Suzanne Lyons, a film producer friend of mine, which says the word show and there's the word business and the word business has twice as many letters as the word show. And there's a reason for it guys. If you want to be a part time filmmaker, this is not for you. You want to do it like movies on the side and make a movie every three, four years, good for you, God bless. But if you want to make a living doing what you love to do, and you believe that that's capable of being done, because it is, because I do it. And I know many other filmmakers who do it. But every single one of the filmmakers that I know, that is making a living doing what they love to do, in the independent space, in the very independent space, has taken control of their own destiny, in one way, shape, or form. They've built out relationships, or they have been able to understand how to become a film entrepreneur. So I wish you guys all the luck in the world. Please stay tuned for some amazing interviews coming up. I'm super excited, we got some Halloween episodes that are going to bring a smile to your face and educate you as well. So thank you all so much for the the outpouring of support. And the the good this the great vibes that everyone's sending me in regards to this whole distributor thing and the work that I'm doing with distributor and getting the word out you know, we did, if you haven't heard we, we got an article written up on variety picked up an article Finally, no film school picked up a couple articles did a couple articles already. And I know indie wire is going to be releasing a massive article, which I've been in contact with them multiple times in regards to that. So I really want this word to get out and about not only with distributor, but what the implications are for the future for all filmmakers and all independent filmmakers specifically. So I do appreciate all of the everybody's support of this and if you do see some content in regards to the distributor situation, please forward it to anybody you know that's in this in this process of making a movie about the sell a movie, have their movie with distributor and haven't heard about it yet, and so on. Thank you again. As always keep that hustle going. Keep that dream alive. And I'll talk to you soon.