Today on the show we welcome back to the show Jonathan Wolf, Executive Vice President of the Independent Film & Television Alliance (IFTA®) and Managing Director of the American Film Market (AFM).
The American Film Market is the most efficient film acquisition, development, and networking event in the world. Unlike a film festival, AFM is a marketplace where production and distribution deals are closed. More than US$1 billion in deals are sealed every year — on both completed films and those in every stage of development and production.
Over 7,000 industry professionals from more than 70 countries converge in Santa Monica every November. They include acquisition and development executives, agents, attorneys, directors, distributors, festival directors, financiers, film commissioners, producers, writers, the world’s press, and all those who provide services to the motion picture industry.
At AFM, participants can discover the entire global catalog of available films and projects, attend 50+ world-class conferences, roundtables, and presentations, and connect with the independent film community’s decision-makers, all in one convenient location without the distraction of a film festival.
The American Film Market 2021 will go on during this crazy time but not how you might think. AFM will be conducted completely online.
- Industry offices – Connect with over 300 sales and production companies, and industry organizations from around the world.
- LocationEXPO – Meet Film Commissions with billions of dollars in production incentives that can quickly get films moving, and connect with facilities, service companies, and institutions.
- On-Demand Theatre – Discover hundreds of films from the world’s best producers – all on demand for convenient viewing.
- Stage 1 & Stage 2 – Over 200 speakers will participate in more than 70 live sessions – Conferences, Panels, Workshops, Conversations, and Presentations – all with on-demand replays.
- Networking Pavilion – AFM’s most interactive experience for attendees to meet. Over 50 video discussions, every hour offers endless opportunities to join small groups that share your vision, passion, and goals.
- MyAFM – The place to create a profile, discover other participants, send messages, and have Zoom meetings from inside the platform.
I’ll also be speaking at this year’s AFM with my good friend and film distributor Linda Nelson on November 3, 2021, at 9am PST.
Jonathan and I discuss how to sell your film on today’s ever-changing world.
Enjoy my conversation with Johnathan Wolf from the American Film Market.
Right-click here to download the MP3
Alex Ferrari 0:00
I'd like to welcome to the show returning champion Jonathan Wolf, how you doing Jonathan?
Jonathan Wolf 0:16
Oh it's good to see you.
Alex Ferrari 0:18
Good to see you too. My friend every, it's become now an annual event for you to come on the show. You've been what, like four years now? I think
Jonathan Wolf 0:26
Three or four times yeah!
Alex Ferrari 0:27
Yeah, you've been on for like three or four times and I've had the pleasure of speaking at AFM once before, before the world went to hell. And then and even even in the online version last year, and again this year, and it's been it's been a pleasure working with you and AFM and, and having you on the show, and we always have wonderful dialogues, depending on where we are in the world. What's going what's going on in the world. So first of all this year, I was planning to fly back out to LA in November, like when I when I left LA to move to Austin, like I'll be back in November for AFM. I'll fly in. And, you know, we'll do all this stuff. And then of course, the announcement came like, we're going online again, guys. So first of all, how did AFM do last year, with the online I personally enjoyed the online experience. It's not it's not the physical experience, it never will be. But it was damn it was it was really cool. It had little places you can jump off, you can talk to people, it was you guys really did a lot to make it as as realistic as being there as possibly you could be in the digital realm. So it was a very cool experience. But how did AFM do last year in online?
Jonathan Wolf 1:39
It depends on which measure, you look at clearly from our standpoint, from an economic standpoint, you know, we're not going to have the same fundraising activity for our trade association that we would if we were in Santa Monica, but you know, if you tried to look at the glass as being half full, what was really cool is that we had speakers and participants from all over the world that would have never participated couldn't afford to travel. We had speakers from Nigeria, South Africa, Brazil, Australia, New Zealand, France, the UK, all staying in their offices or home participating on sessions, the vast majority wouldn't come to the AFM more than once every four or five years. And the participants that were there, it's the same thing. We have people all over the world, who were the economics of travel, just don't make sense. So from from the standpoint of sessions and the education, and that kind of networking, it was terrific. And as you you mentioned, we brought in some technology that really allowed some of that serendipity of bumping into people take place online, and one of our areas, we call it the networking building, it's literally 150 tables, over 10 floors, where you can go sit at a table online and meet four or five other people at the same table. But you get to mouse over their face in advance to see what their title is see what they do to decide whether you want to be in that conversation or not. And that's where we just got tremendous feedback. Because my analogy sort of is if you walk into a large cocktail party, a networking event, and you go person to person, group to group and you find out they're all talking, you're into Docs, and the first guys are talking about horror, and the next group, we're talking about animation, and you never find any group that is talking about dots, and you leave the networking events thing that was a bust and it happens to all of us, then you come to the our networking pavilion, where there are tables that have themes that are floors that have two themes, you can mouse over the people and see who's there, before you actually join a conversation. And so from a networking standpoint, a lot of people found it even more efficient. The downside is is from for those who participated, the AFM purely for transactional purposes, and I'm talking about producers coming to pitch scripts and pitching in his films. It doesn't work. Because you're not able to do that you're not able to walk into the doors of sales companies and go door after door, see what they're into and see if they're interested in your film. So the transactional piece for producers was less. But in some ways the networking was actually more and the the education was was was was best we've ever done.
Alex Ferrari 4:28
So do you instill into moving moving down the line? Hopefully in the next couple of years, you know this, this pandemic will be a little bit more under control than it is with us. I think it will be with us. It's going to be with us for for a long, long time. But it will be to a place like you'll be a seasonal flu hopefully. Yeah, hopefully something like that moving forward. How do you do see a hybrid version is this changed AFM forever in one way, shape or form?
Jonathan Wolf 4:55
It's probably changed how participants value, an event. If if someone's going purely for the education and the sessions, they can look at this and say, Boy, if it's that's being offered online, I don't need to travel, I don't need to be in the room at that time in the 40th. Row, you know, trying to hear what's going on, I can do it online. So it may have diminished a little bit the desire for education on site. But the parts that I talked about before the ability to pitch to meet people, the word access, you know, we there are a few pillars of the AFM one of them is access, you get access to the industry, you can only really get access face to face, you can't get that online networking, you get a different mix of networking online versus face to face, there's a little bit more serendipity face to face, who do you bump into at a bar, things like that, you know, just some you see an old friend introduces you to someone else, there's more of that we can repeat some of that online. And a key pillar beyond education, access. Networking, is visibility. A lot of people in our industry, this is what you seek out, you want to be noticed whether you're you're on a stage pitching a script, where there's somebody has written something about you, you've been introduced to others that ability to be seen, not just to see but to be seen, that can only happen at a live event successfully, where you can market yourself in that way. So we don't see the live events going away at all. But I think the how we tweak the value of attending may change, for example, we may pull back a little bit on some of the the onsite sessions, we may make the onsite sessions available remotely. Because this is the only part you can really do a hybrid. Like auctions, you can have somebody online or auction and in the room, you can have somebody watching the screen like we're talking now or live in the room. But you actually can participate in a what's a trade show, and, and
Alex Ferrari 7:03
You walk the walk the halls and things like that.
Jonathan Wolf 7:06
And so we may take a piece of this and say for those who can't travel, the piece that we can deliver effectively, which is the education piece, here it is. And yes, we'll set up a networking pavilion also. So for those of you who can't travel, you can speak to each other. What's almost impossible is to get the person who's in Santa Monica, to engage with the person who's taught Trent, excuse me participating online, whether it's a buyer in Santa Monica solar online, the reverse of producer online where the person who has traveled and is at an event is not going to spend any time trying to connect with somebody online. So we may have, we may really bifurcated a bit and offer a smaller online experience for those who can't travel this year. But the bigger physical experience remains.
Alex Ferrari 7:51
Yeah, I mean, unless you have computer screens and every single suite, and then they just like login. I mean, that's the only thing I could think of. But that's
Jonathan Wolf 7:58
Even if you're in an office and somebody walks in your door, and they've traveled halfway around the world at great expense, correct, didn't have a meeting scheduled and says, can you talk and the person online who's sitting on their couch on their iPad? What do you mean, you're interrupting me for the guy who walked in? You get bounced, the person online gets bounced every time
Alex Ferrari 8:18
You're right. You're absolutely you're absolutely right. Yeah, there. I think I think it has You're right. I really did. I did enjoy the experience. And having experienced both the live and the online experience, the online experience was really fun. I was actually very surprised that how smoothly it ran. I think you were you said like, Yeah, me too. It was it was fairly smooth with the technology. But you're right, just being there. There's just there's serendipity that you try to emulate online, but it's very, very difficult to do. And, again, there's just stuff that you can't do. Now I have to ask you the hard question. knowing now that there's this, and this, I think this is a question that every business in the world really needs to ask like, Okay, well, we've been online for the last two years. Now, next year, let's say God willing, we have a in person AFM. Do you think that, you know, huge studios are going to be paying those big, you know, those big ticket items for like offices and stuff like that, like they normally do? Or they're going to be like, ah, you know, we'll just do it. You know, we'll just do the online version. Like, what how do you see that? And I don't I'm it's not a gotcha question mean, me and Jonathan actually spoke about this earlier. So everyone thinking like, Oh, my God, no, this is we had that discussion originally. So what do you what do you think?
Jonathan Wolf 9:35
Well, we didn't have the discussion. You asked the question, and I told you, I'd answer it.
Alex Ferrari 9:39
That's the that's the discussion we had. Yes!
Jonathan Wolf 9:42
It's actually going to be somewhere almost neither of those. Meaning I don't expect the companies, the sales companies and production companies to take as much space as they have in the past. And I don't expect them to find value in continuing to be online. What we witnessed Actually in 2019, when was the last time we were in the Santa Monica Hills maybe two years ago, the industry had all the independent sales and distribution slice of the industry that sector had already started to contract, because of the role of the streamers. If you look today, this is a this is a renaissance period for those involved in production. There are more people in front of a camera, more people behind the camera, more set director decorators more grips working today than probably any time in the history of filmed entertainment around the world. And it's being driven not by independent film. And it's being driven not even by long form, but it's being driven primarily by narrative series around the world had destined for streamers. I think in the US, we've hit 500 narrative series this year, on all the various platforms, it's tremendous. But what it's doing is it's taking eyeballs, we only have a certain amount of time you spend in front of a screen. And and, and it is somewhat a zero sum game. And so it's taking eyeballs away from other places. And it's primarily taking eyeballs away from independent film. That is, because of the marketing difficulty of a one off product. studios are now moving into programming, and sequels. But it's really more a taking a page from the television divisions, which is once you launch a series, you don't have to spend the same amount of marketing. On the second episode that you did on the first, it's now launched, it's it's in orbit, and off it goes and it becomes much more predictable. And having additional episodes is like just making more of the same product until it finally is uninteresting to the audience. When you have a film, whether it's a studio film, an independent film, you're launching a one off marketing can become very $1,000 film or $100 million film, proportional, it's still a very big piece of part of the budget. And it's high risk. And so the studios are continuing with their production, all of the series that we're seeing all the very hope high profile scenery series, all the money that's going into this is really squeezing out somewhat, the independence and then you have the streamers coming in buying the worldwide rights in some cases. So it doesn't mean that independent pendant film is doomed, it just means that its slice of the pie is somewhat smaller. And that those coming to the market may be a little less space, they may have sold some of their films to to streamers, so they're not bringing it to market. So we see the same players, I think we'll see the same amount of attendance. But the amount of transactions that they're doing will be less, which is why we already planned to shorten the market from seven days to five days in 2020. Before we got kicked out by COVID. Right, exactly. We'd already shortened it down. So if you look at the TV markets, they're three and four days.
Alex Ferrari 13:10
Right, exactly. But I have to ask you so you know, in the end, you're absolutely right with what you're saying in regards to the independence being squeezed out and independent film in general, being squeezed out in the 80s, specifically in the 80s and the 90s. In you were you definitely around that time period. And you know, the the it was just money was flying from the sky, it was it was an insanity for people listening, you just don't even understand the kind of money that was flying around. And even going back further, when, in the early days where you have that that stereotypical picture of a distributor, who's behind a desk smoking a cigar saying All I need is a trailer and a poster and I can sell that kid that that that image. In those days, there was such less competition in the world for eyeballs like movies were still movies and TV at three channels, you know, and then slowly but surely things have been getting changed, changing change it to the point where you said very eloquently now is that there's so much tension vying for our eyeballs. Our eyeballs only have so much time during the day that many filmmakers still create product and independent producers still create product with the mentality of the 80s and 90s. And even the early 2000s When DVD where you could put out sniper seven, four and get it pre sold around the world in a matter of minutes. Where in today's world that might be so much more difficult if not impossible to do. In other words, the quality of the product has to elevate to even get a just even to get a fighting chance. So a lot of these independent filmmakers are thinking it's the 90s in the Sundance generation where you could just make your personal initiative film, and expect to get those checks that Ed burns or Robert Rodriguez, Tarantino and those kind of guys got, and it's not that world do you? Do you agree with that?
Jonathan Wolf 15:09
Yeah, I had a couple things to her. Just like the 80s and early 90s, a lot of money flowing around, there's a ton of money flowing around right now, probably more, but it's all targeted at the series. It's all coming this time from the platforms rather than than individual investors in the 80s. If you weren't happy with a 15% return in the stock market, you tried to get 20% out of out of the film industry. Here was a strange time I worked at Newegg World Entertainment, they make a movie for television, and then sell 50,000 cassettes to stores after it was on network television and get $2 million in video revenue simply because there was no video store in the country that couldn't have one of everything. If somebody came into your store, and I have one of everything, there are 30 or 40,000 video stores. So you always sold 30 or 40,000. And you made a million half or $2 million in revenue every time on every film just out of whack. I mean, it was it was it was crazy. But it was it's almost similar today, two platforms that are valuing market share over profit, right need market share of consumers, they don't mind running at a loss they need to build their business while they can. It was the same with the video stores in the 80s, they couldn't have you drive by your store and go somewhere else, they had to have that share of their local audience. So they had to have one of everything. So this is a bubble. But it may not burst right away. This may go on for quite a while because the players are not mom and pop video stores. The players are Disney, HBO, you know, you've got giant players who are in this for the long haul. And I think that's just terrific for everybody who works in film. But if you just happen to work in this slice of the film industry, which is the independent producer, making spec films, you have the highest risk, and it came about at the wrong time. And it's the wrong time. By that. I mean, it would have been better if this was 20 years ago, and we didn't have digital cameras. And production wasn't so inexpensive. The access to to, to being able to film inexpensively, or the aspiring or the emerging producer, the access to crews the access to cameras, the access to do it, you know how you edit all the things that you do are much less expensive, and can be learned more quickly. And then you throw that in and of course of all the growth of all the film schools. And what we've done is we've turned out a lot of people who want to practice their craft who want to bring their art forward, who find that the economics of making it more cheaply, are there. But the marketplace is not in sync with their desires.
Alex Ferrari 17:55
And I think I think also just as filmmakers listening, I think their expectations of what a career in the film business is is not what they were originally told. And that could be, you know, like in AI, that's a very, you know, there's a very pollyannish way of looking at like, oh, you know, you just make your movie. And Hollywood finds out how genius you are, and all this kind of stuff. But originally, when I went to film school in the 90s, it was like you can get a job onset or in production, and you make a movie that came up in the 90s. So you make an independent film, one every couple years, if you're lucky. And use you could build a career off that. In today's world, you got to almost if you're going to do independent films, you've got to make maybe two or three a year to have just a decent living. If and that's at the top 1% of everybody doing it. And that's not what a lot of people listening want to hear. But it's the truth, it is a very difficult thing to generate revenue from being a producer and independent producer, especially when you're starting out. And I know, you know producers as well, who've been doing this for 2030 years and they're in distributing company. They're just like, you don't know what to do. What the game is keeps changing on us like it's insane.
Jonathan Wolf 19:14
It's funny to say that a close friend of mine who's made more than 40 films, some of them very high profile, some of them smaller independents. He basically just shook his head and said, the way it's changed, I can't connect. I'm just going off and doing something else. Now he can have 40 or 50 films. But the difference is he made those films at a time where he kept the rights or they reverted back after licensing deals expire. Today the platforms are taking the Netflix approach, which is Here's your check. Thank you very much. You made a nice profit but that's it and it's ours forever. Producers have become work for hire laborers if you will, versus business builders and owners of their content. And well writers and directors and actors have residuals that they can live off of and help sort of support them between projects. Producers used to have profit participation, ownerships, rights, reverting back to them, that in many cases, that's that's not true anymore if you take a streamers deal. And so they're starting to chip away at you, if you will add the business model for the entrepreneur, to create a business. And now the producer is if you find one, great, here's your fee, go find another, but you're not getting paid in between.
Alex Ferrari 20:33
In that's in that in you said, you know, directors, writers and actors have residuals that's also shrinking dramatically. I mean, the days of the friends cast or the Big Bang cast getting a million dollars a year off of residuals off of syndication, those days are starting to go away too, because
Jonathan Wolf 20:52
I think those big numbers were more their profit participation. Yeah. And then the union residuals. But But sure, all those things. When you see a series on Netflix now that's extremely high profile with Nicole Kidman, you know that she got a big check. And that's it. That's it.
Alex Ferrari 21:09
Yeah, that's it, and but they get a big check up front. So he's like, and same thing for the producers. And same thing for the directors, if you're doing something for the streamers. But if you have a product that you're trying to sell to the streamers, that's a very different conversation there and it was find it funny, because a lot of directors a lot of filmmakers I talked to they're like, Well, you know, Martin Scorsese, or Spike Lee or, or Kevin Smith, or these kind of directors, they'll get deals at the streaming platforms. And I'm like, the only reason they are getting deals is because they were able to build their brand off the back of the studios at a different time when that was possible. If Kevin Smith shows up today with clerks, no one would ever see it. Same thing for El Mariachi, same thing for Brothers McMullen. Basically, almost any movie in the 90s, other than maybe Reservoir Dogs would be lost. And even then Reservoir Dogs could possibly be lost, and they wouldn't have the careers they have today. So it's just such a different world that when
Jonathan Wolf 22:06
For one wonders, where are we going to be in 10 years, when the same system of bringing forward that talent, and allowing them to take risks and be discovered, isn't there? And it's now all conglomerate driven?
Alex Ferrari 22:19
If you were already there?
Jonathan Wolf 22:22
Well, they're still going back and finding the Kevin Smith's and they're finding some of the others. But how Gotcha. You know, it's, it's the entrepreneurs, the producers, they really, they're the risk takers, and they're the ones that discover the new talent. You know, I'm Roger Corman, is the poster child for for having done this so many times in so many careers launched or discovered by him?
Alex Ferrari 22:47
Yeah, and I mean, I just had Jason Blum on on the show, and it was amazing. He's one of the few guys doing it. At 5 million and below level, mind you he has the sweetest deal. I told him that, like you've got the sweetest deal in Hollywood history. And he's like, yeah, no, because I don't think there's going to have that again. But but he's a but if you look at his model, genre based, most of the times genre based 5 million below 3 million below, sequels could go up to 10 million, and even then, only if the director is seasoned, so they'll kill given M Night Shyamalan 10 million, but he and he won't use new directors, he only use seasoned directors. It's really interesting. But that's about a business model that is working right now.
Jonathan Wolf 23:30
But it's interesting, and use the right phrase, it's a business model. And I wish that most producers would look at what he's doing. And understand that he's really starting with the marketplace and with the customer. And working backwards, because his goal is to make a profit. Shocking, shocking. His goal is not to make films that he likes and whatever they happen to do they do and who cares. His goal, and the goal of most successful film companies is to make a profit. And that isn't always the goal of the independent producer who's putting together a film we talked before we started, you know, I'm going to have an ensemble genre with eight or nine characters. And it's a coming of age story set in small us town.
Alex Ferrari 24:19
I need I need 3 million for that. And everybody's going to learn and no cast, no cast that we recognize and crumble. It's an ensemble. So there's nobody, it's all unknowns. And I need $3 million. It's a period piece as well. Let's throw that in there. And then they I've seen I've seen that movie. It's come across my desk and I'm like, Oh my God, these people have no understanding that they will probably never get their money back. And I even told you earlier like even if they went Sundance or get into Sundance or South by or Toronto or any of these big festivals, the days of you know, buying out like I had the director of Palm Springs the writer director of Palm Springs on which sold the has the record 17 point 17 excellent film 17 point $5,000,000.69 The making it the biggest sale ever at Sundance, but it had ended Andy Samberg in it. And it had JK Simmons in it. And it was like this it because it is a big thing that's so people like Oh look they just the biggest sale ever at Sundance. I'm like, Yeah, but look at the cast. That was pre sold almost it wasn't pre sold. It wasn't pre sold there, they actually sold that there. He told me the whole story. But you know, and Hulu by the way, just so everyone understands the business model of that that purchase. Hulu bought that for 17 point 5,000,069 cents, right? The chances of them actually recouping that money in that sale is minimal. And he said that, but the PR the press that they got first buying the biggest movie at Sundance was probably worth about 80 to $100 million. With a PR
Jonathan Wolf 26:00
I've talked about this before to Netflix stated as well, because they're no longer in the business of selling tickets to a film or attracting advertising with eyeballs. They're in the business of subscription. And, and one of the things we've talked about this once before magazine publishers have known for a century that you will maintain your subscription and renew every year, if there are two sections of the magazine that you like and want to keep seeing can be a 300 page magazine. But if they're two sections, you'll keep coming back and Netflix follow that model. They're going to have just enough documentaries that if you like Doc's, you're going to keep coming back just enough Adam Sandler films that if that's your taste, that you're gonna keep coming back, but they don't need more than that. They need just enough to fill each section, so that everybody says that's got something that I want. And I'll maintain my subscription versus how many people actually watch any individual, any individual film, the eyeballs on Doc's may be very low. But you need people that want to have Doc's and they'll maintain their subscription because of it. But each of the brands is different. Disney, of course, handles it completely different.
Alex Ferrari 27:13
Yeah, I mean, when we, when we came on last time to speak, Disney plus was just coming online. And we were just like, Oh my God, what's gonna happen and now they're, the estimates are in the next two to three years, it'll be bigger than Netflix. Because it's a mat. I mean, it's just massive and what they're doing, you can't compete with the mouse. I mean, the mouse is the mouse, it's just so difficult and the kind of money that they have and, and the properties they have between Star Wars and Pixar and, and Marvel and you just can't compete with that. And HBO is trying and they're still not making it.
Jonathan Wolf 27:46
I wouldn't count Netflix out or Oh no, I said five years ago, Netflix will be dead because they'll lose all their studio deals and they won't have any content. And what we tend we'd be in 10 alternative be very us focused and what we do, they are doing terrifically around the world, local content, we think of studios versus studio films versus serious versus independent film, there's that fourth leg of the table. And that's local production around the world. And trust me, the world is just tired of seeing scenes from Hollywood and Beverly Hills in every film that comes on. Did they want to see scenes in their own backyard, they want to see their own talent. So that's another piece of the equation that's, that just has to be considered there.
Alex Ferrari 28:32
I have two words for you squid games.
Jonathan Wolf 28:37
Okay, I've seen about the first five minutes and since I can't get my wife to watch it with me. I'll be looking at it another time.
Alex Ferrari 28:44
So I just finished it with my wife. And she actually because it's your right if you can't watch it with your wife, it's very difficult to to get that situation to go. But I got her to watch the first episode and she saw she got hooked. And look at it. It's a Korean show. They paid apparently according to the leaked documents $21.4 million for it. Biggest show in the history of Netflix, bigger than stranger things bigger than Cobra Kai It's insane.
Jonathan Wolf 29:10
Look, I'm a guy who's who's never raised on subtitles, my view subtitles men art film and art film just didn't happen to you might think they're not bad films. They're just we all have our own thing. Never watched subtitles. I am completely hooked on call my agent. And I haven't seen it I recommended French series. It's called 10%. In France, they change the title. And they've made a strategic decision not to dub it for the US. So it's on Netflix call my agent if you haven't seen it. Another French series we saw I forgot the name of it now. But we've started to see series from other countries which we never Yeah, I mean call my agent. I'm telling you if you haven't seen it yet, it's just terrific. And I think let's not forget our arms getting out. And let's not forget about this. And one of the things started on this ship colleagues that I have in South Africa have told me that if they have white characters in their films, especially romantic comedies, they can't travel at all. But black characters are doing better outside of South Africa than than anything else that they can make. Because there's, they speak English, they have a US way of producing and storytelling, and that they're doing just terrific export. And this is like, a huge piece of their business now is is romantic comedies. romcoms with with black actors, very important, because there is there's almost a shortage of that you write for the world. So you know, this is that fourth pillar, which is films are starting to travel much more than we in the United States may give credit.
Alex Ferrari 30:58
Yeah, and it's I mean, I thinking of watching a squid games or a call my agent that just didn't we didn't have access to it, the occasional foreign film would come in or you would see the chorus our or the Fellini films, or the French New Wave or something like that, that would come in but generally speaking, we weren't exposed to I think the BBC was the closest to anything for and that we would see like Doctor Who or Luther or something like shows like actual series, but now I mean, squid games and the thinking call my agent and things like that the the game is changing so rapidly, and it continues to change. It's such a rapid face that, you know, people who like yourself and if you're looking at this, it's you know, just a second that you feel like okay, alright, SVOD is the way this is the Okay, it's just going to be as far from now on what No, no, no, don't say VOD now. Okay. So now it's a VOD. Alright, so we're in a VOD now, and, and what's going on now? Okay, foreign. Okay, we need it just every year it's changing. It's almost changing month to month, there's it's so difficult to be a film producer. Which brings me to my next question. And we discussed this as well off air, that you have seen a lot of disgruntled and angry independent producers, and independent filmmakers who have such a tough time as everything we've just illustrated in our conversation, finding a sales agent, finding a distributor that I can actually work with and the frustrations that they're having. What advice do you have for that? What do you how do you how do you see them fixing that problem, or at least helping in some way?
Jonathan Wolf 32:39
Well, first, this is probably shrinking a two year Master's course into about 10 or 15 minutes. We hit the highlights we just needed to drill down a bit. Let me start with something which is unpleasant. And then I'll go into all the positive stuff. Okay. Most art is bad. Amen. It's from little kids. Terrible. I got two or three paintings from my grandmother that she would give me every few months. Look what I painted for you went it's still in the closet. Most artists now and most artists understand that they're they're making for themselves. They're making it for the people they like, if you look at most artists in most disciplines, most are not in it for a profit. It's not their business. It's their hobby. It's their passion. You get some matriculate up in there, it's Saturday afternoon, you know, art fairs at the park, you get some that are really at the top and they're in galleries. But most understand that this is this is a passion and it's a hobby. And yes, I'm going to paint the same lake over and over and give it to different family members who say thank you very much. When you look at filmmakers, they, they come into it for different reasons. But ultimately, because of the economics and because of the collaborative nature, there is an expectation among some are all involved, that there will be an audience for the art. My grandmother didn't expect an audience of more than one for her painting when it was handwritten. But when you get filmmakers working on a project, collaboratively, there's an expectation of an audience. And then, which leads me sort of to why to filmmakers, make a film and I believe there's three reasons why an aspiring or emerging filmmakers should make a film. One, frankly, is for the education for the learning experience. There are masters you know, we've heard stories about master painters where they've used x rays and realize there was another painting under the original one you see why because they paint something and decided they didn't like it, just paint over it. That was their their learning experience. That's one reason to make a film and it's a terrific reason. Another is a showcase piece. One that you want to be able to demonstrate the skills of all involved, not just the actors, the director, the writer and the set designer, and so that you can go to festivals and have your film be seen and be somewhat of a calling card. And of course, the third is a profit, you're running it as a business. And there may be a fourth, but those are the three that I see, every decision you make, from the story that you select, to turn into a script, all the way through casting and production has to be driven by one of those three, and it can't be all three. If you're making a profit, you're going to make certain decisions. If it's a showcase piece, you're doing something different. If it's a learning experience, you're doing something different. And it's recognizing first and foremost going in, What's my goal, and if it's one of the first two, which means it's not a profit, then you're looking to have the experience and hopefully have the film scene and have it in festivals, and have everybody you know, have eyeballs, but not necessarily a business. If you're looking at that third pillar, which is this is going to be a profit, you need to start at the very beginning and make sure you've done everything you're going to need to do. Which means did I have a lawyer that wasn't my father's real estate attorney? Who's going to look at this and tell me he knows what's going on? Did I? Did I balance my budget to make the film as marketable as possible? You know, how much money goes into cast versus special effects versus, you know, versus location? Am I looking at the audience, I've always said, If a director comes to you and says, I'm making a film, here's my story. First thing you ask him is who's it for? And if the director can give you a fairly narrow demographic, 18 to 24 year old guys, you know, middle aged women, whatever it is, okay, great, let's kind of target audience, when the director says, by making the film for me, the first thing producer does is sort of backpedal out of the room and then run. Because ultimately, every decision you're making, even if you're looking at theatrical, the rating of a film is highly important. If you're targeting 14 year old girls versus 19 year old young women, the rating and what you put on there, how you cast, even what clothes there were, all of that's impacted by your target audience. So it has to start with that target audience. And then knowing all the way through, I hate hearing about things. I finished the film. Did you have a photographer on the set? No, we couldn't afford? Did you get a good lawyer to make sure that all the rights are taken care of? No couldn't afford it? How's your chain of title working on it?
Alex Ferrari 37:40
What, what what's chain of title exactly.
Jonathan Wolf 37:44
And so there there seems to be, and this is what they miss in film school. Which is, it's it's all about the craft, but not about the business, right. And whatever business you go into, you tend whether you're making shoes, or sweaters or whatever cars, you tend to first look at what is the audience want. And that let me work backwards to talk about Jason blue. He's focused on what the audience wants. They want this type of storytelling. And so it's just whenever you hear I didn't have the budget for and then fill in the blank and whatever they didn't have the budget for was necessary to make the film commercially viable, or to get it into the marketplace. And then you have to step back and and we work it.
Alex Ferrari 38:35
Yeah, it's interesting. Because if if a canvas cost $100,000, a paint brush cost $50,000 And paint cost $25,000 per can, you as a painter would think very carefully about what you paint. And you're like, Okay, now where am I going to sell this painting? And how can I generate revenue with this painting in this so that's why there's so many that so much bad art in the world, because it's so cheap to finger paint, or, and, and to be honest, that's one of the reasons why there's a de Lucia of bad cinema. Because now the cost has come dramatically down because like I've said this so many times on the show before in the 80s the only prerequisite was to finish. If you finished a movie, you made money in it. I mean, it could be in I believe I worked at a video store. I saw the stuff coming through the doors, and I'm like, Are you kidding me? And it would sell and it was just and that that was a completely different world where now not only do you have to finish it, but it has to have this this this this this this this it's just so much harder to hit the baseball because the pitches are so much faster. And things are so much harder to if I use the baseball analogy where before you know when Babe Ruth was around midday didn't throw 9890 905 mile an hour fastballs but baby could hit the 93 or 94 It's all day and that's why he was the best At the top could Babe Ruth, survive in today's world by drinking and smoking and not actually doing other things that he know!
Jonathan Wolf 40:07
He had at home runs because he couldn't run fast.
Alex Ferrari 40:10
He couldn't run, he was out that man was alive as long as he watches me on me. But you know what I'm saying. So it's just the world is different. And I think filmmakers are still trying to hit the baseball of Ty Cobb and Babe Ruth's time where it's now really where we're at now.
Jonathan Wolf 40:24
There's a perception among producers that the marketplace is so big, with the explosion of right platforms all over that whatever they make, there'll be, there'll be a market for right. And while some of those platforms, yes, they're aggregating, they just need content, whatever it is, most of them aren't as selective as any platform has been in the past. And it's expensive to do that. And one of the things that that, that I don't think producers truly understand is the cost of distribution. You know, I hear about, well, the sales agent wanted me to pay the marketing upfront. Well, the sales agents just decided they're going to work on on a fee, but they're not going to take on risk. You know, in every entertainment industry, every film industry transaction decides somebody's paying for something and somebody receiving a risk is being transferred. We talked about Nicole Kidman being on a on a on a big series for Netflix, Netflix took the risk, she got paid a big fee. So somebody else who's working at scale, they're taking the risk. And whoever is funding, it is transferred that risk to that person working at scale, there's always a risk transfer going on. And whenever you look at any transaction, whether it's hiring a writer or selecting a sales agent, at every step of the way, you want to say who's in the risk boat, who's taking that risk. Most distributors are risk adverse, if they were interested in risk, they'd be producers. They are risk adverse, they simply want to earn a fee for the for the service they're being provided. And, and a lot of producers feel that those distributors should one take on risks, but to that the world should be designed to make their dreams come true. This is how you know, and the industry is not designed to make your dreams come true. And so when they go to the sales agent, I'll read things sometimes posted on the Facebook groups that you've seen are part of our oh my god, they asked me for $10,000 upfront to cover the marketing expense, and then they want a 20% fee. Why should I pay them 10,000, they should pay it, it isn't a matter of one being bad or one being good. It's understanding that they're dealing with a company that is risk adverse that isn't taking on anything other than risking their time to do to do the distribution.
Alex Ferrari 42:56
So just just as an example, you know, that the $10,000 marketing costs, which is a very broad thing
Jonathan Wolf 43:03
I just throw out a number, but
Alex Ferrari 43:05
No, but I've heard that number 25 20 25,000 50 100,000 for marketing, quote, unquote, marketing, in today's world, if someone's asking you for $10,000, and that might be for cost to like deliver the film that might be finishing, it might be closed captioning, it might get in the chain of title, do, there's those costs and producers listening have to understand, either you're gonna pay those costs, or they're gonna pay those costs. And you can negotiate differently, if you if you bring it all to them, you can negotiate a better price. But I promise you, if they're going to do it, it's going to cost you more than if you did it by yourself if you know what you're doing, and so on and so forth. But an actual marketing expense. So if a distributor X is asking $10,000, which is going to be purely for marketing, we're just going to get the word out. That is literally like spitting in the ocean, in my opinion, like you can't get any sort of awareness
Jonathan Wolf 43:56
I agree should have a different label.
Alex Ferrari 43:58
Yeah, if there's just no, look at 50,000 100,000. I've worked with some of these distributors, and I've talked to them, they're like, at 50 grand, what do you get? And like, what, what kind of ROI? Is that going to get you? Are you going to get transactional? Are you unique? So it's like that's the that's a real gray area where a lot of distributors I find, you know, are should be labeled something else. But anyone listening, if someone's asking for 10,000 purely marketing, I oh, it just makes no sense. You're right, like just like
Jonathan Wolf 44:30
But the labels should be different and may have to do with the physical the third party costs. Basically the distributor should be earning the fee to cover their staff and their overhead out of whatever percentage they're charging. The third party costs whether like it says it lawyers is a chain of title. Is it all the closed captioning deliverables? Yeah, is it is it dubbing all the various deliverables and things that need to be done the queue sees that may be the risk they're unwilling to take. They can't Read the marketplace. It's somewhat like a consignment shop, we've all been to these, these antique stores with a consignment shop where the consign or consignee or or I forgotten, the person who's bringing the product into the store, they're still paying rent for that space. And if nothing sells in that month, they paid the rent, because the person that owns the business is not willing to take on the rent risk, they're willing to take on the overhead risk of their staff sitting there. And so they still have They get a percentage of each transaction, but they're not willing to take on the fixed cost. And it's, it's the same sort of thing, you have to understand you're putting your your film in the high in the hands of a consigner you're assigning to them, and that they're going to want you to pay certain costs, and they'll cover their overhead out of their feet. And, and so that has to be built in when you're actually financing the film of putting it together. What are all those end costs of deliver, and they are going to need to take care of.
Alex Ferrari 46:08
And the the key is is like if you don't want to play ball with them at the numbers that they're throwing out there, like that's fine. There's 450 other films sitting in line right behind you. And that's where the disheartening problem is for so many filmmakers is that just they don't understand that the marketplace it's not a it's not a seller's market. It is a buyers market, there's way more product and there is need for product level. Yes. Yeah. At that budget level
Jonathan Wolf 46:32
Target over 30 million.
Alex Ferrari 46:34
That's a different wall that yes, yeah, absolutely. Yeah. Once you start getting at 10 million and below, you know, there's just so much so much product out there. That's so difficult, you know, to make a profit, because it's just so much competition. But yeah, once you start doing 30 Millions and you got Bruce Willis in it, and that's a different the, the competition's a lot less in that world. But there's more risk involved.
Jonathan Wolf 46:59
You mentioned, you know, Bruce Willis, okay, I'll go see diehard 44. But there, you have said to the distributor, I have prepaid in marketing, by paying for Bruce Willis, wherever it is, I have bought marketing. So this comes with a marketing element. It comes with a built in, in heart
Alex Ferrari 47:20
But you So the funny thing is, though, and I have to ask you this. You know, we're back. When you when you pay for Bruce Willis to be in your movie, you're paying for 30 years of marketing and brand awareness of the brand that is Bruce Willis. But that was done at a different time in the world where studios were spending obscene amounts of money and movie stars. And getting it out there where it's not as much like that anymore. Yeah, there's the rock. And there's, you know, a couple other but the days of the movie star that just just just because the movie stars in it opens a 20 million, or 50 million. I remember Tom Cruise could open anything. Back in the day, Brad Pitt could open anything back in the day, Arnold Schwarzenegger Salone. And then you know, now that's not the case anymore. So where's our future movie stars going to be? Because if you look at Marvel Marvel's building and making movie stars out of Chris Evans and Chris Hemsworth, and Chris Hemsworth, now becoming a movie star in his own right, and has like other franchises outside of Marvel, through Netflix, whereas, but he again needed the leverage of a studio to put him out there in a way that Chris Hemsworth will work for the rest of his life. Yeah, if Michael Madsen and Eric Roberts and Danny Trejo, and all these guys all work, and that nothing gets any of those guys. They're all wonderful actors. But they continue to work for the rest of their lives based on the cachet that they had earlier in their careers, or projects that they've been involved with. And that's just the way the game is played with with talent. Where's the future gonna be like, because we don't have those movie stars? Where's the next Bruce Willis gonna come out of as the question, is it out of squib games? I don't know. I don't remember any of the actors in Split games. I don't think people look at things like that anymore as much.
Jonathan Wolf 49:11
I don't know. But I think that they'll be there because that's what actually differentiated the US film business from the film business of any other country in the world. How many local stars can we name that are outside the US that are global stars? Yes, one or two out of Hong Kong, one or two out of Italy. And that's about it. What the US was able to create throughout the last century was global stars. And it's what differentiated the US film business from the rest of the world. Nobody else could do that. And they still haven't. They still haven't. And so if there's a chance to continue to do it, it will be the US and when you became a star in the past, if you've been came with a good enough start somewhere else. You're starting Australia, you moved to the US, you know, Nicole Kidman became a US studio star, not an Australian.
Alex Ferrari 50:10
Yeah, Russell Crowe did as well. Yeah. So does Hugh Jackman. Yeah.
Jonathan Wolf 50:13
Yeah. So so we are still we are in the US is still viewed as as the place that can create global stars, where we don't see that elsewhere. And I just I tend to think as long as the US has a leadership role in storytelling. We know how to connect with an audience because the United States is one of the few countries in the world that gets no absolutely zero commercial or economic support from its government. There are countries that maybe they don't have supports, let's say it's, I don't know, China still has China film or motion.
Alex Ferrari 50:50
But Australia, Canada has government support
Jonathan Wolf 50:53
That local films must play in theaters for a certain amount of time, local films must have their version of network premieres, that they have carve outs for local films, and some had subsidies. And some have both the US has neither, which forces us in Hong Kong, by the way was similar, which forces us to take a purely commercial view of filmmaking. And it's why we've been successful, because we haven't actually dependent on those subsidies. In France, you don't make a film for the public, you make a film for that board of financiers who are over the age of 70, who love to see three minute panning shots of a mountain that, you know, I love French films, but some of them should hang in the loop this so slow. And so, you know, their audience is different. And a country that has Nigeria is a great example of no subsidies whatsoever. And they have a great film, tiny film industry, but it's all commercial based. And they're all successful because they can only make what they can sell. And so I think we sort of got I got off topic a little bit, but I think stars will continue to evolve and be created in the US for some time.
Alex Ferrari 52:09
So what do you see what trends do you see coming because I was kind of joking about it earlier with like s VOD. I remember what the first year was at AFM is all s VOD, and OTT s VOD, OTT Asphodel, e, t, and then the year after like, it's all about AVOD. And T VOD is pretty much just, you know, the the, you know, the the side to side thing like, whatever. No one ever makes money in divan anymore. Unless you drive out unless your studio or you could drive traffic, or you have Bruce Willis in, in the movie or something like that. So what are the trends that you're seeing is AVOD. Still the growth area for independence at a certain level?
Jonathan Wolf 52:44
Sure. I mean, it's, it's, there's AVOD, and then there's I forgot the acronym for it. But there's linear advertising, which, which is basically it's being programmed for you. I mean, if you look at the look at any of our broadcast networks, so NBC, its advertising supported, it's just linear versus on demand. And you'll continue to see some of those types of channels being created. Yeah, I agree with you, you know, TV will slowly fade away. Because every the economics for the filmmaker will be such that I'm just not going to put it there. It may have a moment in time, where you'll have releases, you know, what? Disney plus plus or Disney plus?
Alex Ferrari 53:25
Oh, it's a PVOD premium video on demand.
Jonathan Wolf 53:29
Yes, yes, the word Disney actually did this, which is if you subscribe to the channel, you still can't have it in the certain window, you have to pay the premium. And so we'll see some of that premium to offset those who don't want to go to the theaters. But I think the normal transactions if I'm going to go find a small independent film and pay $1.99, we come back to what you said is there's no there's no marketing ability to make that happen. There's no way to create awareness. You look back at the record industry 50 years ago, yeah, you'd see some, some garage bands press 100 singles, Saturday afternoon, outside their school over their trunk, you know, but it's not a business. And self distribution in that way, won't be a business. I mean, I know that people are gonna be listening to this and saying self distribution is an avenue to go onto, well, you might be able to bypass the sales agent and go to netflix yourself or go to some of the platforms yourself. But ultimately, they can't deal with the friction of connecting with individual producers. They need somebody in the middle, they need an aggregator that when they know the file is being sent to them that aggregator Qc is for them. They don't have to do it themselves. They don't need to send out 10,000 profit or statements or whatever. They do have transactions. They just don't need this supplier pool being that big. So there's always going to be those intermediaries. But where do I see it? I think you know, it's it's we'll still have free television because Governments around the world are going to require that those it'll be over the air always will have a VOD Well, I've SVOD the bundle that we used to have on cable will just become a bundle of s VAs where we're paying four or five subscriptions. I mean, in my house. We've got got HBO, we've got Disney. I haven't stepped up for Hulu yet.
Alex Ferrari 55:24
It's well worth it. Well worth it for Hulu by the way.
Jonathan Wolf 55:26
We've got Yes, we got apple. I've got three apple boxes and a bunch of DirecTV boxes. And you know, it's
Alex Ferrari 55:36
You gotta you gotta cut the DIRECTV. That's just insanity. That's insanity.
Jonathan Wolf 55:40
Well, but here's the thing that I still am not able to timeshift live sports.
Alex Ferrari 55:46
Because you haven't gone to YouTube TV, or, or Hulu
Jonathan Wolf 55:50
But there not. They're not all there yet.
Alex Ferrari 55:53
There you go. We can discuss off off air. But I'm almost positive that you have access to not only live sports, but every live sports if you buy the package. So if you want Major League Baseball, you can buy Major League Baseball, you can I cut off DirecTV alongside nothing against DirecTV, but just cable in general cable and all that stuff. Because I love the ability to do everything on demand and record things endlessly. And you know, all that kind of stuff. But if you're going to invest anymore, and this is not an ad for Hulu, the only reason I like Hulu is not as much for their originals is that they have basically all the all the network television recorded all the time. So it's like you get tons and tons of stuff. So it's really a great channel. Sorry, that's done again, I get I get paid nothing for who
Jonathan Wolf 56:39
AVOD knows God are going to be out there. Yeah, those who, who and and I think the channels that we're seeing some of them doing that, that you can have the non advertising versus the advertising, just do you want to pay the less amount or the higher amount? I think that price points in subscriptions are very important to have multiple tiers of price points and understand that audiences have varying levels of ability to pay during levels of interest, right in the content. And so I could see some people going straight to an S VOD for, for things that they like. I mean, I subscribe to a sports, you know, network sports, a sports league rather? At the same amount, I'd be paying for Disney. But it's important to me and other places. I'll go AVOD because it just doesn't doesn't matter so much.
Alex Ferrari 57:29
Right! Exactly. So it's, I mean, our habits is is changed are changing is generally just I mean, I mean, before it was, I mean, remember cable and cable showed up like oh my god 40 channels. And now it's like literally just 1000s of channels around,
Jonathan Wolf 57:44
And there's going to be more because subscription revenue pays more than advertising revenue. The reason we're seeing so much being produced is because what we are willing to pay and those subscriber fees are much higher than they earn through advertising. So they can make more.
Alex Ferrari 58:04
Yeah, I mean, Disney Disney Look, when Disney finally showed up to streaming, it took them, what 1011 years after Netflix showed up. I mean, they came in and they came in hard and quick. And I'm look what they've done. I mean, they just they've they've killed it, where it's something like HBO, who has been around forever, and has the brand recognition and they have great content. They can't. I mean, they're not close to Disney,
Jonathan Wolf 58:32
Disney and like this. This affects everybody that's listening more as a consumer shouldn't a filmmaker, but Disney has long understood the value of brand. 50 years ago, no one went to a universal picture. Disney universal, or Warner Brothers and Paramount, but Disney had a brand. And and this is their core competency. It's why they bought Pixar, Pixar. It's why the Lucas was why they bought Marvel. They understand the value of brand and they're skilled at how to monetize that brand. So when they stepped up and went to, you know, their their channel, they approached it the same way. We're staying in brand segments, or if you look at this, yeah. And put right across the screen, Which brand do you want? And National Geographic and there? You read my mind? Yeah, yeah. And so they are all about brands, they don't want the independent film. It's got to fit perfectly into their brand and it's all in you know, in house. And that's that's what they're doing. There's only in my view, there's only two brands in the world in film. One is Disney and the other is trauma
Alex Ferrari 59:37
On both sides of the spectrum,
Jonathan Wolf 59:39
Yes, yes. If you're a trauma fan and traumas made a film I think I think you know blue houses is is the Blue House is getting there. Yeah, there are there are a few others here and there. But if you want to look multi decade brands in phone, Disney and promo
Alex Ferrari 59:56
You know that is that is a I've never heard that before but you're absolutely Right, if you're a fan of trauma, you're going to watch whatever trauma puts out. And but you won't, but you won't watch whatever Warner Brothers puts out, or whatever universal puts out. It's just not that and Disney is a brand.
Jonathan Wolf 1:00:12
The benefit of brand is it reduces marketing costs, and therefore it reduces risk. And because I'm a fan of Marvel, you don't have to see a $15 million theatrical marketing campaign. Just if you're aware of the next Marvel films out, you're going to see it.
Alex Ferrari 1:00:29
And it's, especially with what they just released the Shang Shang Shi, who is a no offense D level character in the Marvel Universe. And I mean, it's not I mean, I think collection she comics, it's not even in the top 250 of characters, but yet, it made a boatload of money. It's a very good film, from what I hear, Black Panther was a D level character, C, C, D level character. So it's amazing what they've done. And now you're hooked on their storyline, because you've got to see Black Widow and Shengshi to continue the entire the entire storyline that they've created in the in the phases of Marvel now you have to watch that Disney plus shows, because it's all worked in and all that kind of stuff. It's pretty, it's pretty ingenious. I think trauma should do something like that. But, but Jonathan, where can people sign up? Well, first of all, when is AFM this year, dates.
Jonathan Wolf 1:01:30
The first through the fifth of November, sign up online American film market.com. Um, the cool thing about it is it's just all the education we got, I think 48 or 50 sessions, 150 speakers and just just great people who couldn't always even if they were in LA, it's like, well, I can't spend a half day driving to Santa Monica this. But yeah, yeah, you know, an hour in the office, because let's face it, if you're a studio in Burbank, and we've asked you to be at a at a session 11 o'clock in the morning on it. Oh, who's the Santa Monica? That's a half day commitment. You're absolutely right. And so the the caliber of speakers we have is is is terrific. And it's just fun to network on that platform is as you say, but
Alex Ferrari 1:02:13
And I will be there and I will be there talking about distribution with my with my, my guest, Linda Nelson from indie writes as well. So we're going to be talking all about distribution where we're going to be doing that, and
Jonathan Wolf 1:02:26
In video on demand. So
Alex Ferrari 1:02:28
Oh, she's she's fantastic. She's wonderful. And then And then where do people go? afm.com Americanfilmmarket.com is American American film market.com. Jonathan, it is always a pleasure talking to you. And it's always we always have very interesting conversations to say the least about about the world distribution. So I appreciate you my friend.
Jonathan Wolf 1:02:48
Well, thanks for inviting me. Good luck to all the producers who are out there with all their projects.
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