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The REAL Truth About Film Distribution Today with Linda Nelson
Today on the show we have returning champion Linda Nelson from Indie Rights. Linda and her partner Michael Madison have been a shinning light for filmmakers in the dark world of film distribution. With the distribution landscape changing almost weekly, I wanted to bring Linda on to shed some light on the ever shifting marketplace.
Nelson Madison Films/Indie Rights was founded by Michael Madison and Linda Nelson because they believed that the future was bright for independent artists and that there was a better way to produce and distribute movies. They have been in business since 2000, when they produced their first film, NSYNC BIGGER THAN LIVE a Giant Screen Movie that played to sold-out crowds worldwide.
Known for innovation. SHIFTED, their first digital feature, was the first movie on Amazon’s UnBox (the predecessor of Amazon Video) and was used by Amazon to promote their platform for over five years. Partnerships were forged early on with the leading digital platforms including Amazon, Google, Cinedigm, MGo and Adrise, and these partnerships ensure that Indie Rights can offer the very best audience opportunities for their own films, as well as the more than 300 other filmmakers they work with.
We discuss the realities of film distribution, what filmmakers need to know, and what is selling today. We also throw a cold-bucket of water on filmmaker so they can snap out of delusion and better position themselves for success.
Enjoy my eye-opening conversation with Linda Nelson.
LINKS AND RESOURCES MENTIONED IN THIS EPISODE
- Indie Rights – Film Distribution
- The Complete Film Distribution Blueprint: Get Your Film Sold
- Rise of the Filmtrepreneur: How to Turn Your Indie Film into a Moneymaking Business (FREE AUDIOBOOK)
- $1 Closed Captions for Indie Filmmakers – Rev ($10 Off Your First Order)
- Indie Film Hustle TV (Netflix for Filmmakers and Screenwriters)
- American Film Market
- DONATE to Feed America to help with people affected by the Coronavirus
- The Complete Indie Film Producing Workshop with Suzanne Lyons
- Shooting for the Mob (Based on the Incredible True Filmmaking Story) (FREE AUDIOBOOK)
REAL-WORLD STREAMING FILM EDUCATION
- Indie Film Hustle TV (Streaming Real-World Film Education)
- Hollywood Film School: Filmmaking & TV Directing Masterclass
- Filmmaker in a Box – Learn How to Make an Indie Film – 18 Hours+ of Lessons
- Storytelling Blueprint: Hero’s Two Journeys
- The Dialogue Series: 38 hours of Lessons from Top Hollywood Screenwriters
WATCH MICRO-BUDGET CASE STUDIES
- IFH Academy – Exclusive Filmmaking & Screenwriting Training
- FreeFilmBook.com (Download Your FREE Filmmaking Audio Book)
- Indie Film Hustle® Podcast
- Bulletproof Screenwriting® Podcast
- Filmtrepreneur™ Podcast
- Inside the Screenwriter’s Mind® Podcast
Alex Ferrari 2:27
Well guys today on the show, we have returning champion, Linda Nelson, who is a distribution specialist. She runs indie writes with her partner, Michael Madsen, and is doing a lot of good things for filmmakers. I want to bring Linda back on the show because every time she comes on, there's new stuff to talk about. Since last we spoke, you know, we have been going through, obviously an insane time in in the world and in the world of distribution. And so many things have changed. And she definitely has her hand on the pulse of what's going on in distribution for independent films. So we talk about what's going on in COVID, how she's handling it, how business is booming in some areas, and dying and others. And, and we also do a little bit of myth busting in regards to expectations that filmmakers have for their films. So without any further ado, please enjoy my conversation with Linda Nelson.
I'd like to welcome back to the show returning champion Linda Nelson. How are you doing, Linda?
Things are changing almost so rapidly. Like First of all, HD 1080p is still the standard. Right? You, you please put away the whole myth that 4k is an absolute necessity.
Linda Nelson 5:12
That is absolutely true. I would say the only thing that that we don't take any more is st or standard definition. Okay, it just doesn't look good on an ad inch tells so much now. And and and we feel bad about that because our first is honesty and it looks awful.
Alex Ferrari 5:35
I know I put mine in the other, I put mine in the other day. And I was like, Oh, ouch. Let me just blow it up to 720. Right
Linda Nelson 5:45
now, where it stands today, and this could change in six months is that everyone except for Netflix will take HD. Okay, and there are variations on HD. So what we insist on getting is a 1920 by 1080 progress for two to HQ, two channel stereo. That is our minimum and required format, because everyone except for Netflix will take that Netflix now does require 4k. Really? Yes. So you're not going on Netflix without 4k? and professional sound?
Alex Ferrari 6:31
Does it need to be five one surround sound? Or can it be stereo?
Linda Nelson 6:34
Yes. No, it needs to be 5.1. And and this is another thing. The the 5.1 that is required by most by most platforms is not a six channel by point one. It's an actually an eight channel 5.1. And that's because in addition to the regular 5.1, it has two tracks, two stereo tracks attached, that's seven and eight is left and right stereo. And the reason they want that file is because their software can detect what a user is going to play back, you know, the movie on so if you have a television and you have surround sound settings set Amazon, for example, or iTunes can detect Oh, they they can they need, they can have 5.1 but if they see that you don't have 5.1 then they're just going to put delivered stereotypy. So that's why they want that eight track, you know, eight channel stereo very quite well,
Alex Ferrari 7:41
for right now. And in about six or eight months. It could be 8k. I mean, we don't know like, things are changing so rapidly. I hope not to tell that trust me. I I did one of my one of the most popular podcasts I ever had was don't shoot in 4k. And people lost their minds. This is back in 2015 people lost their minds and there was a rationale. It's still I mean, the world has just changed so much.
Linda Nelson 8:09
People should shoot in 4K but they don't necessarily finish into yeah or not.
Alex Ferrari 8:16
Right for but now we got what we're talking about cameras have 12k that are affordable. We're talking about
Linda Nelson 8:22
1000 and that's great. And we're we're about out to buy a new red camera and I think we're going to get a K and what's great about being able to shoot that is that in post, you can recompose the frame. And that's an incredible option. You know, so it can oftentimes save you from having to do a two camera shoot.
Alex Ferrari 8:51
Oh, absolutely. You guys have gotten much a lot of coverage, shooting 4k just even 4k and zooming in. Absolutely. But as Verner Hertzog says, when you reframe in posts, it is the tools of the coward. Well, Werner, I'm sorry, we are all count. Now the the elephant in the room that we haven't spoken about yet is COVID. It is is completely thrown the entire planet upside down, let alone our little corner of the business and industry. How do you see COVID changing the distribution side of the business? What are the platforms looking for? Is there a lack of content? How is it changing?
Linda Nelson 9:35
Well, so far, I don't think there's a lack of content simply because films there were all of these movies going into post as COVID started. So all of those films have been being edited and are now coming out of post and coming to distributors to be put up on platforms. But I think we will start to see A diminished number of films, because there hasn't been any new production. So I think by say, January or February, we're going to start to see fewer films being submitted for us, because everyone, even editors are stuck at home, you know, so they're editing faster, you know, filmmakers that maybe had day jobs. So they had to edit, you know, at night. Now, we're finding that they have more time on their hands and their their editing, you know, quicker than they normally would have. So we're seeing a lot of content, a lot of submissions, our submissions have probably tripled, during COVID. So unfortunately, part of, you know, the downside of that is that we've had to become more selective in the films that we take, because we can only handle a certain number of films. You know, it's, it's very time consuming for us to do the encoding and delivery and QC. So there's only four of us, we have four people in our company, and, and so there is a limit to how many we can handle. The good thing is that that is improving the quality of our catalog. But at the same time, I kind of miss that feeling of being a champion for brand new filmmakers, we
Alex Ferrari 11:23
always love that idea that we could work with filmmakers that were having a hard time getting distribution from, like bigger companies, but the platforms but the platforms themselves aren't accepting new filmmakers and maybe lower quality films that might get been been in the past, given a chance to find an audience. Now those days are gone. Is that correct?
Linda Nelson 11:49
I think that's very true. And, and that's, again, another sad thing for truly new filmmakers, because they've had so much content coming at them, that they've decided that they have to be more selective, Amazon in particular, because they open the doors to anyone, anybody that could get their film uploaded, went up on Amazon. And they started to get heavily criticized by the public in general, that there was a lot of, you know, subpar films, there is, as you know, and because they want to be considered as good a platform is Netflix, or, you know, Google Play, they very seriously decided they were going to be more discerning. And, and, and they didn't really do that, at first by not accepting films, what they did was they were still taking films, but then had to actually compete with all the other films that were on the platform. So that's how they came up with this concept of customer engagement rating. So all of a sudden, they are you're in a competition with studio films, if you want to know the truth. So you actually, your film had to prove that it was engaging with an audience, somewhere above 50% of all of the other films that were up there, or you are going to make a penny an hour. And because of that, so many films that we're actually we're making could be making a decent amount of money at 10 cents an hour, you know, if they were making $1,000 a month or $2,000 a month, that's enough for some filmmakers to live off. But when that turns into $200 a month, you're not paying your rent, or $25 a month, or 25. Right. But I mean that but that particularly that class of indie filmmakers that were able to get a couple $1,000 a month, it allowed them to do to make movies full time, but you just wouldn't it wouldn't cut down to $200 or a couple 100 bucks, you're you're out you're out of the competition, so to speak. So, um, so that was the that's the primary way they've been able to, I can't I guess knock off, you know, or discourage, you know, subpar what they consider subpar, not non competing content. And and so I think that was the first way secondly, they are they started to look at actually purging certain films. And if they found, even if you even if you had a car, but they felt that your film wasn't competing, or it wasn't a good enough quality, or they were getting any kind of, you know, complaints from customers. That they would purge it and without notice, they purged files. So certain files, you know, would just disappear and they don't send you a notice. They just they're gone.
Alex Ferrari 15:13
Right? Because Because basically, it's their sandbox, and it's their rules, and they do whatever the hell they want. And they can care less about the, they truly can care less about the filmmaker. And this is something that has happened with every platform that opens up. At first, the doors are wide open, Facebook, Twitter, YouTube, everybody can come in, everyone can make money, everyone could do everything. And then once they have market share, or audience, they start tightening and tightening and tightening and tightening till they all those people that used to be able to get in are no longer invited to the party. And that's what's happening with Amazon and and also with Netflix with to be with all of these other companies where they used to be wide open is that it's a fair?
Linda Nelson 15:57
Sure, absolutely. Before we used to we've had, we used to put several films up on Netflix and Hulu. And in fact, our own indie film, the third film that we did, delivered, made, probably on Hulu, the best money that it made. While it was, you know, when it first came out, first couple of years it was out. But, and Netflix was the first to do this, they have decided that they want primarily original content. So if they acquire something, they want exclusivity. And so now, Hulu has also adopted that. So for the most part, unless they really, really, really, really want your film. They it's going to be exclusive. And and because they there's they pay a flat fee, there's no upside potential. So we don't recommend any indie films. Do it. Because you're that if you're if you're exclusive with them, you might want to sell it to them. And in fact, we've actually even said to some people said, Oh, I have I really have to be on Netflix. I say, Okay, you know what, go go to one of the companies like bit max or quiver that will pitch your film, pay them to pitch your film to Netflix and see if you get on. Because we're not interested in distributing a film if we can only put it on Netflix,
Alex Ferrari 17:26
right? And if like if basically, you take on a film and they give you $50,000 for that film, and that's all you can make off that film for the next two years, or depending on the terms of the length of the agreement. That's not really interesting to you. There's no upside, you can't go anywhere else, you can't make a deal with a foreign distributor to you know, a buyer, but you're done. And I've heard from,
Linda Nelson 17:50
and I want to be honest with him about that.
Alex Ferrari 17:52
Right, exactly. And from what I'm also hearing from the grapevine I've heard from multiple producers and multiple, multiple producers, distributors, and filmmakers who have been dealing with Netflix is now and I'm not sure if you've had this experience yet, because I'm not sure how much you're dealing with them currently. But now before like Hulu, when I sold my film to Hulu, and licensed it to them, it was a it was I think a six to 12 month deal. And it was X X amount of money. And they would just break that up in quarterly payments during the course of the term. That's right now, Netflix is starting the payments at the end of the term. So if you sign the two year deal, those first two years, those first two years, you don't get a dime. Oh, that's what and I've heard that from I've seen I've actually had filmmakers on or not on. But I've spoken and consulted with filmmakers who've had six high six figure offers from from Netflix, but they're like, yeah, it's a two year deal exclusive. And they're like, Oh yeah, but we can't pay you for two years. And then at the end of the two years, and then we'll start your payments. And we're like, they've just walked away from the deal. Like, why would you? Why would you go with a deal like that? Yeah, sure. It's Netflix, it's like, you know, Warner Brothers or Disney, but if there's no money in it, come on,
Linda Nelson 19:07
right. I know, at some point, you know, you just have to go it's, you know, why is it still considered the holy grail and, and it just really doesn't need to be anymore. So I think that, you know, slowly the word is getting out there, that you don't have to be on Netflix to be successful. And that it that sometimes even if you go with Netflix, that you know you're hurting your film rather than than helping it that you really could make a lot more, because we have plenty of films that might have gotten like a $30,000 deal with Netflix, but they've made 300,000 in the first two years. So, you know, we we are we see our job is being you know, to maximize the revenue that you can see from your film so you can keep making more movies. right that's that's the point. You know, I think There are sometimes exceptions where someone doesn't want to make movies, they just want to be a director for the studios. And so they're more concerned with their reputation, right. So there are occasionally, you know, if some, if that's what they want, you know that, but that's not usually the films that we get, the films that we get are usually from filmmakers that want to make movies to make
Alex Ferrari 20:23
and make money. But the end goal, but the end goal, that's why I always ask filmmakers, when they asked me to consult them on them, like what's your end goal? Is your end goal to get this up on Netflix? So your your your own personal cachet as a director goes up? And you can leverage that into getting another gig? Or do you want to make money? And that's two very different outcomes, and filmmakers have to be honest with themselves about what they want. And I know everyone's like, well, I want both. I'm like, Well, yeah, sure. Yeah, we all want both. Now, do you like you and I've been in the business for quite some time. And I mean, I wasn't, I wasn't making movies in the 80s. But I am a student of the industry. And I and I worked in a video store. So I saw a little bit of what happened back in the 80s, which was that at in the 80s, you could literally finish almost any movie, if you actually finished it, produced it and delivered it, it was sold. Period. That was that was the that was the barrier of entry. Now the barrier of entry to make a movie was extremely high. It was you know, low low end, we're talking three to $500,000. And that's super low. And we're talking Roger Corman style films at that point. But you can make money as the years have gone on, and the the access to the the gear and the distribution, everything has gone up, more and more people have flooded in the industry. So now and I'd love to hear what you think, do you think that you have to be so much more than a filmmaker and so much better at your skill set to even survive as a filmmaker, meaning you need to understand marketing, you need to understand distribution, you need to understand deliverables, you need to understand all these other tools that you use to be able to not just hire somebody to do a lot of times, but you need to have a lot of these tools in your toolbox, just to just to make a living just to sustain you not get rich, not blow up not like just to make a living. Because before you literally it was like shooting fish in a barrel back in the 80s in the 90s just making a movie Got you. And now everyone makes a movie, like so.
Linda Nelson 22:29
That's why your book is a very, very valuable, because it talks about the need for filmmakers to really be entrepreneurs, and to really understand everything they can do to promote and expand their business with their movie. Your movie now, I think can be like the core element of a brand, you know, or a business that you build around your film. But you have got to have the business skills now. It's really, really important. And I'll go back a little bit to that conversation we're having about curation because now and even I'll go back a little bit further to the Amazon situation. Another thing that has happened with Amazon is that Amazon owns IMDb TV, and IMDb TV, is there, a VOD channel, and it's their move to a VOD. And and, and that move is very important for them. Because in the past, they had to pay for all of their content out of this subscription pool. So in other words, everybody would be subscribing to Amazon Prime. But that money is not used just for movies. That was like a freebie that you got because you're getting free shipping. Well there because the COVID everybody's home, nobody's going out shopping, everybody shopping online. They need that, that money to cover all the shipping costs, distribution centers, so they don't want to use that pool of prime subscription money to pay for content. So what do they do? Okay, they just say okay, we're going to encourage everybody to move over to IMDb TV, then the advertisers are going to pay for the content. And we don't have to take that out of our pocket. So we're, you know, and we'll talk a little bit more about this whole move to a VOD and and what that's all about because, but that's that's why Amazon is doing it because Amazon is different than other subscription channels that that's the only business they're in is movies generally speak generally.
Alex Ferrari 24:49
Generally speaking, I met Netflix is Netflix. I've been saying this for a long time. Netflix is extremely vulnerable, because they have basically one stream of income. I mean, Sure they sell them occasional Stranger Things t shirt or a Cobra Kai t shirt at this point. But that is that is not Disney. Disney is a very diversified company like right now, Disney's entire Theme Park and Resort, which is about 25% to 25% of their yearly revenue, we're talking about billions of dollars is shut down. But there other avenues are doing their other revenue streams are doing really, really well. Especially Disney plus, and we'll talk about p VOD later on too, because I'm dying to talk to you about p five, as well. But
Linda Nelson 25:36
to continue that, so that's what's happening with Amazon. And why part of why they, you know, made the pay rates so low, because that's another, you know, encouragement for people to switch to IMDb TV. Now the problem is that an individual filmmaker cannot get on IMDB TV. So that means that all of a sudden, we become a gatekeeper for Amazon in that sense. You know, so there's no DIY aspect to IMDb TV. So and, and they are quite heavy on curation. So when if we submit maybe 50 films to them, they might take 30. You know, so we actually have to pitch unveil.
Alex Ferrari 26:33
Right? And I want it they want and I want everybody to understand, though that you have had a relationship with Amazon. Going back, you were one of the first first films ever streamed on Amazon was one of your films. So you guys have a very unique relationship with Amazon. And if they're treating you like that, how do you think they're gonna treat an independent filmmaker uploaded to Amazon Video direct?
Linda Nelson 26:57
Yeah, you will you won't have access to an individual will not have accesscorrectly? I don't think ever,
Alex Ferrari 27:05
right? No, that's not that's not that's not smart business on their part. There's just enough. There's so much content that the studios can dump into a VOD that, and I've been seeing it constantly that they're just like, Why Why not, we'll just toss it in there and see what happens. And there's just
Linda Nelson 27:20
so much. And the good news is that the pay rate on that is significantly higher, it's almost, it's almost equal to what the pay rate used to be a couple of years ago on Amazon. So because we're getting a share of the advertising revenue, and so it's, it's comparable to like to be if not a little better, so so in the in the end of your film is good enough for us to get you on there. It's good, you're gonna make more money there, then, then you would have made on prime.
Alex Ferrari 27:52
So. So the basically, you know, and this is good. I mean, I didn't want this to be a depressing episode. But there is some depression, there is definitely some depressing concepts that we're talking about here. And issues, which basically are now is a lot of filmmakers are they under the impression that they could just make a movie, any kind of movie with no star power with no niche audience with no anything, and go out there make it and, and there were ways of generating revenue, like an Amazon where you could literally have the power in your hands, upload it yourself, drive traffic there, do some TV ad sales, maybe get part of Amazon Prime. And that's like Low, low hanging fruit, then if you want to go to the next level, you spend it pay money to an aggregator to put it up on iTunes and Google Play and all these other platforms. And before you could make money, make good money. I've had many filmmakers on my show that have made millions doing doing that. But it seems like now, those days are essentially gone. And a lot of filmmakers are still making content or have made content, thinking that that's the way the game is played. Because, and I've said this before, as well, our industry pretty much stayed the same. The technology aspects of it and the distribution side of things stay the same up until pretty much the late 70s, early 80s when VHS was brought into the game. And then even when that happened, we're still talking about maybe a decade to decade and a half, like let's say like eight to 10 years, 12 years, 15 years that VHS was king, then DVD was just another version of that. And that's that was king up until the early 2000s, early to mid 2000s and then streaming but it seems to now everything keeps speeding up. And the change is happening so much faster. Where before it took forever to change. I mean remember, I still remember at the beginning of what I launched in the film, hustle there was still that conversation. This film look better than digital. Like oh yeah, you remember that was the biggest thing and I had podcasts about it. I talked about it like oh is film The texture. People are still having that dumb conversation which they answered is it's up to you. So, so the business is changing so rapidly. A lot of these filmmakers are not if they're not listening to podcasts like mine, or reading books that are current, they're being left behind and they're getting slaughtered. Because, you know, you see films all the time, they come in with a $500,000 budget film with no stars attached with with, you know, barely a good story. And they're just like, Did that film will never make money and unfortunately, sometimes you have to say, Sorry, you're the bad guy. Like, sorry,this is not gonna work.
Linda Nelson 30:33
The other the other thing is beautiful, important films.Yeah. Just there is no market for them right now. Right. There's not a market for depressing dramas. Right now. Not so much. Right now. People want to be entertained.
Alex Ferrari 30:55
They want to escape. They want to escape.
Linda Nelson 30:57
Yeah. They're feeling bad enough is up.
Alex Ferrari 31:01
Yeah. But again, I've said this. And I've said this on the podcast 1000 times, please. Whoever's making the COVID. Movie. Stop it. Stop it. Well,
Linda Nelson 31:09
we we've had to not, you know, rejected by Amazon.
Alex Ferrari 31:16
Right? Nobody wants a COVID movie. I don't want to watch COVID movie. Do you want to watch a COVID movie? I see that on the news every day. It's the equivalent of watching a 911 film. While 911 is going on, or watching a Vietnam film while the Vietnam films going on the Vietnam War. like nobody.
Linda Nelson 31:32
Some time afterwards. Yeah.
Alex Ferrari 31:35
And even then how many people like how many there was this era of Vietnam films? There was what for like 349 11 films? I'm not sure if there's going to be a moment where we want to go back to COVID I don't see it anytime soon. It
Linda Nelson 31:48
might be interesting is when you have kids that didn't experience it and you want you had say
Alex Ferrari 31:54
here's what it was. Because you know, we're gonna be the grant we're gonna be like the grandpas and grandmas in the in the nursing homes. Were you alive in 2020? And I'm like, What was that? Like? I mean, when the aliens landed in November, what was that?
Linda Nelson 32:11
No, it's so funny that you said that because we were having all of us a conversation the other day we're going we're going What else could possibly aliens, but he said aliens are gonna.
Alex Ferrari 32:23
So aliens are gonna live. No aliens are going to land Atlantis is going to rise. The mole people will finally rise from underground and take over the planet. Blood rain hasn't happened yet. I haven't seen locust or frogs rain on us yet. And there's a handful but there's not much left. On the meteor Don't forget the comet, the meteor or the comet that will eventually hit us. It's, it's it's an insane, insane world that we live in. Now with COVID. The other thing is let's talk a little bit about p VOD. And the theatrical because you used to. Well, you know what, before I asked the question, want to ask you one other question, what do you look for? And I want people listening filmmakers listening, when you're looking at films as a distributor, what do you want to see in the film, besides good quality, because that's that's bare, that's bare minimum, it has to be well produced. But as far as actors, genre, niche, things like that, tell me what you are looking for. So people can really understand what a distributor is looking for and what the marketplace is looking for. We'll be right back after a word from our sponsor. And now back to the show.
Linda Nelson 33:43
First of all, you have to have a great poster. I hate to silly, but it's not silly. repost a great trailer helps.
It's absolutely essential. People have to understand that when when your movies, if you don't have a star in it, the only way people are going to watch your movie. I mean, if you have great social media engagement, that helps but when people are sitting on their couch, and they look up at their screen, and they've got their remote in their hand and they're scanning through what am I gonna watch tonight? What am I going to watch tonight? They have your poster has to be clickbait. It has to grab this absolutely Instagram. So I mean, I made a joke out of that, but it is super, super, super important. So when passed that and it's not the first thing we look at. It's probably kind of the last thing we look at and after if we liked the movie, and we don't like the poster, we just say you got to get a new poster. So so that's how that goes in reality. Because I would say probably only maybe if we're lucky half of the people that submit their films to us have a good poster. And you know so the words getting out there that you know you need to Have a go to post it but but what we look for is something that grabs your attention right away. We're not terribly genre specific because we have very successful Doc's we have very successful thrillers, we have very successful dramas, we have very successful crime films. You know, so it, the story is very important, that acting is critical. The audio is absolutely essential, we, we, we get plenty of films, where they look great. But the audio is so bad, and and that and that just takes you out of the movie. It's really, it's really, really important. But But the most important thing is that the movie grabs you quickly and engages you. And, and we, we so many times we see really good movies that have these slow starts. And somehow people get it in their mind, oh, we're gonna start slow and build? No, it's better to start with a bang, and then explain, right and then get into the story. Because people have so much choice. Now. If you're not engaging right away, people are out of their way. And we saw this, this was an amazing thing that we were able to notice when we were doing screenings in Cannes last year. Because Cannes was a virtual market. All of the screenings that we did, we were able to see how long someone stayed in the virtual theater before they left. And we could see on certain movies, after five minutes, they're out of there. Or after 10 minutes, they're out of there. But the ones that stayed through the whole movie really liked it. But if you don't get people right in the beginning and engage them in the beginning, they're just as likely to go on board with this and just move on to something else. Because there's so much content.
Alex Ferrari 37:14
Well, I mean, this the same thing that happens to me like I will my wife and I now are scanning through old shows like that we've heard we're good. And I'll give them I'll give them you know, 1050 likes, we've literally given a show 15 minutes, and my wife and I go, No, no, and we move on, or we watch a movie, we're like, we'll give it a shot. And we'll give them five or 10 minutes if they don't get us in those five or 10 minutes. Next. And that is for better or worse. That is the world that we live in. So you have to ask yourself Who's that listeners listening right now? What do you do when you're scanning through through Netflix to and this is not just like, indie films, this is all prod all all Ben big productions, things like that. You know, there's there's big giant shows, which will remain nameless, because I don't want to get hate mail that I started. And I couldn't get into. I was like, I'm sorry, I know, everybody loves this show. But I can't. It's not my flavor. And it's not grabbing me the same way. Then there's other shows that I watch that are just like, Well, I mean, let's just call Cobra Kai what it is. It's it's absolutely genius. And, and I watched it on YouTube before anybody you know, I was one of the original eaters. So everyone's freaking out now about Cobra Kai, but you know, but anyway, that's, we're on a side note. But but that's the rule with it. So as a filmmaker, you need to grab them in the first four to five minutes. It's sad that like you don't have the Scorsese time to taxi driver to build it up. You know, or and
Linda Nelson 38:38
what, what's the big mistakes that happens is that I've seen indie films that have 10 minutes of credits upfront in the beginning, upfront. Yeah. You don't need anything other than the title, the director and the stars. That's it, move on. everybody else's credit can go at the end. And I know a lot of indie filmmakers they go all but my friend did this for free. And this one did that for free. If nobody watches your movie, you don't make any money. No one's gonna make any more movies.
Alex Ferrari 39:11
And no one could eat. No one can eat after that. But do you but so obviously, right and then stars and stars obviously, and stars still have some sort of cachet, and faces have cash even even if they don't have a bankable star. Like if Nicolas Cage is not starring in your action movie. You might be able to get a lot of second and third bananas to have good faces to pepper them throughout the piece that you have a nice poster with faces that people recognize Does that help?
Linda Nelson 39:40
I want to tell you two stories. To illustrate that. We have a comedy called to Marcus cousins presents Boogie comedy boogies comedy night this film has by far and away have been our biggest seller. It has done high, high high five figures for the past three months on T lock on Amazon. A TV VOD. Yes. Who's normal?
Alex Ferrari 40:19
How's it? How's he driving? He's driving traffic right there driving traffic.
Linda Nelson 40:22
Okay. DeMarcus Cousins. He's big time basketball player for one. Okay. Okay. He goes on ESPN and mentions the movie. Dun, dun, dun dun, dun, dun. So, so that's that's the perfect example of having a name that is willing to mention the film.
Alex Ferrari 40:44
But But also, but he's not a movie star.
Linda Nelson 40:49
He is not, but he's a huge celebrity and doesn't need to be a movie star. It can be a movie star, it can be a big famous athlete, a musician. YouTube, someone with an enormous YouTube following or a huge Instagram following. It needs to be somebody famous. And and that's the funny thing. It doesn't have to be a movie star anymore.
Alex Ferrari 41:15
Someone who has an audience, someone who has an audience that is passionate about them. It's right. Because you could because oj oj starring in your movies that he's very famous not going to bring a whole lot of dollars in
Linda Nelson 41:27
social media currency. Correct, right. Okay, so now here's another story. You know who Vinnie Jones is? Of course, right,
Alex Ferrari 41:38
some snatching of action movies? Yeah. Ha,
Linda Nelson 41:41
ha. Okay. Well, I have I took a film called Ron hoppers misfortune, which is a beautifully shot and executed and produced and acted. Love Story fantasy, starring Vinnie Joe. It's not his I cannot get anyone to watch that movie.
Alex Ferrari 42:07
But that's not an action though. And that's not what he's known for.
Linda Nelson 42:10
Exactly. If you're if you are going to pick a star, don't cast them in something that's so far out of his genre, per sample. So it'd be like if you, you know, wanted to cast a big horror film in a super serious drama love story. You need to consider that as well. So that's to start stories with very different results.
Alex Ferrari 42:40
Now, I know there's another film of yours that has done extremely well. And the kind of currency that it carries is arguably even more powerful sometimes than having a famous person, or movie star in it, which is the niche. And the niche is what I talk about in my book a lot is extremely powerful. The film Netflix versus the world. Yeah, that documentary out, which I've saw, and I love and it's, and I'm gonna have, I'm gonna have the director on the show soon. But they the director is so smart, because he's leveraging a book, if I'm not mistaken, right? It was a big based on a book. And Netflix, which is a brand that everybody on the planet knows. And the title of the show, the document is called Netflix versus the world. So I'm gonna watch that I know the story, read the book and everything but but that's done extremely well
Linda Nelson 43:30
has an extremely well. And in fact, we actually have, we sold it to Japan, and they are actually doing a theatrical release of the film. And they have, they're also doing DVD and blu ray. And they also just sent us an agreement to sign off on them being able to sell t shirts for it. Like I showed interest you. Wow. Okay. Yeah, she's staying for that movie.
Alex Ferrari 44:03
Linda Nelson 44:05
they're following your plan.
Alex Ferrari 44:08
Which is right, there's creating ancillary product lines. So whoever bought the film in Japan, they're like, wait a minute, we're gonna milk every little drop of add of this. And what are they doing? They're leveraging the Netflix brand. It's that and that's what a good documentary a lot of not good documented, but a lot of successful documentaries have done that is by leveraging brands or topics or emotions, have a niche audience.
Linda Nelson 44:34
documentaries about food, for example. Always do well, we've been called fat fiction, which is about a low carb diet, doing extremely well.
Alex Ferrari 44:44
The vegan diet vegan documentaries always do well, paleo documentaries, those kind of things. Yeah.
Linda Nelson 44:52
And so they're, you know, there are definite things and and there's the old favorites genres, you know, like horror films. It's there. You know, fairly well executed to well, in Java films are the exception when it comes to production value people seem to be more forgiving of the production value.
Alex Ferrari 45:11
But But Amazon but Amazon might not be
Linda Nelson 45:13
No, no we're screwed either way. Well, if it does, if it does well, you know, they're there. They're okay with it. But it's it has to be popular.
Alex Ferrari 45:29
Right exactly. There was a film A while ago called thanks kill and it was a thanks killing I think it was thanks killing which is about a killer, a killer Turkey. A serial killing Turkey. And this guy and this is going back probably seven, eight years. A movie like that today would not would be would not get into Amazon, though that movie by the way was was sold to Warner's direct direct digital, a direct link to v two v two VOD back in the day, and they made hundreds of 1000s of dollars in the movie cost like seven, like 7000 to 10,015 20,000 or something like that. And they had t shirts and they had, but a movie like that in today's world might not even get to see the light of day on these platforms because they're just gonna go No, no, we're not. We're not into this.
Linda Nelson 46:19
Well, we're testing that out right now. We have one called not Zilla and ot Zilla that has the coolest hokey monster in it you've ever seen in your life. Nice. It's, well, it's a fake monster movie parody.
Alex Ferrari 46:38
Might so why not? Let's see what happens. Well, we'll see what happens. Now let's talk a little bit about p VOD, because that's been it, you know, as as of this recording has been in the news a lot. And when I say p VOD is premium video on demand, which is kind of taking the place of a theatrical release, or has or doing it in conjunction with a theatrical release. But because of COVID, theatrical has pretty much dried up. You I know you used to have a theatrical release for a lot of your films, and used to be able to leverage that to get better sales and to get reviews and rotten tomatoes and all that kind of good stuff. But that's pretty much dried up as well, at this point. Is that correct?
Linda Nelson 47:20
Well, we have not been able to do a theatrical release since last March. And in fact, the COVID shut down, shut down in the middle of three theatrical releases we were having. So they got to do three days instead of their seven. So, but they did get their reviews. So probably somewhere between a third and a half of our films that we were taking at the time, we would do at least a one one week theatrical release in Los Angeles. So we could get an LA Times review and maybe, you know, a couple of other good reviews and and and that would also get you a Fandango page. Right? Because Fandango, and their trailers on their trailer promotions are fantastic. No, absolutely massive. They have they have a trailer channel for each individual genre on YouTube.
Alex Ferrari 48:17
And they all have millions of followers,
Linda Nelson 48:19
millions and millions of views. So that Fandango was important. And you I used to only get a Fandango page. If you did theatrical because Fandango was for selling tickets, that's a ticket sale site. That is nuts. Not so much anymore. Well, exactly. So and then, and the same thing, Rotten Tomatoes, if you have theatrical release, you got, I could get you a Rotten Tomato page up even, you know, a couple weeks before your theatrical release. So that was those two pages were very, very valuable and popular with people wanting to know about a movie. And so once the theater shut down, with a little convincing, we were able to talk both Fandango and rotten tomatoes into putting up pages for our releases saying this was a plan theatrical release, but due to COVID. You know, we had to release it straight to VOD. Right. So now, there's a couple we have a couple of alternatives. We have a movie called unbelievable. That has Snoop Dogg in it. And they had a and this fits into the category you're talking about a virtual theatrical
Unknown Speaker 49:46
Linda Nelson 49:47
advance ticket sales, how it went, Okay. Um, we were disappointed in the number of tickets sold, but I think that you have to be very Very careful about how you design and price those. There's a company as it gets called Addison interactive, that does these for studios. And depending on how much money to spend, they actually can be quite expensive, but they will set up like a virtual Green Room for you so that you can have the stars from the movie actually, in this green room and people can interact with them. Right? And, you know, and so, so there's, there's various options. And, you know, it's if you can promote it well enough to get good enough ticket sales, and I think it can be worth it. Otherwise, it could be a lost leader. But you know, so while we didn't sell as many tickets as we thought we were going to sell it Did you know, it was an interesting, you know, to see how that would work? Well, we have, we haven't been as successful trying to do drive in the drive ins that we have spoken with want stars. They want movies, you know, with names that they can really,
Alex Ferrari 51:11
yeah, there's a limited, there's a limited inventory of screens. So they want to be I want to just release Hocus Pocus, the movie from the from the late 80s, early 90s, the Disney movie with Bette Midler. And it's number one at the box office make $2 million, you know, for Halloween. So this is the world where I mean Empire Strikes Back was Jurassic Park was number one again a while ago. It's It's insane. But now the whole the whole p VOD conversation has changed because of Milan, which was not because originally trolls to did it. But that was a very unique scenario is a kid's movie, it was right in the middle of the shutdown. Parents were going crazy. It was a different conversation. Milan showed up. And from what I understand the number the ticket sales numbers is they sold about 9 million tickets at 30 bucks a pop. So they ended up being whatever that is 20 $270 million, which is 100% there's not no splitting with the theater. And a lot of those people turned into a Disney plus customers because you need a Disney Plus account to even get access to watch it. So if that's the case, and that's what the movie like Milan, which is not a franchise film is not it's big, but it's not like it's you know, it's not a Marvel movie. So I'm curious when this hat when they put James Bond up on like something like that, or the next Marvel movie, but I just heard that Wonder Woman is going to go p VOD.
Linda Nelson 52:42
Alex Ferrari 52:44
So that's a very, because like, that's a movie that I probably would spend 30 bucks to watch. I don't,
Linda Nelson 52:51
you know, if you've got, what I would do is I would I'd invite over a couple of friends. Sure. And have a watch party. Right? You know, we've got an 80 inch television. And you know, and you have four people, you know what, two people cannot go to the movies for $30?
Alex Ferrari 53:11
Well, you can if you sneak in your own popcorn, and you sneak into you know, drinks, and you and you go and you go at nine o'clock in the morning in LA, then yes.
Linda Nelson 53:23
Other than that mean, otherwise, you're spending at least 50
Alex Ferrari 53:25
Oh, and that's if that's just that's just to people that don't have kids that don't I've taught
Linda Nelson 53:32
Oh, you got a couple kids, you're talking 200 bucks, it's easily so 30 about $30 there's nothing
Alex Ferrari 53:37
in arguably is a really it's not reasonable in the scope of standard rentals that we were used to a blockbuster even on TV currently. But go it's that or go to the theater. It's going to be a very interesting, the world is changing so rapidly. And I thought well, let me ask you, do you think theatrical is going to come back in the way it was pre COVID? Or is it going to be completely different? Because regal just shut down? Like literally
Linda Nelson 54:02
and by the way did the new james bond is been postponed to 2021?
Alex Ferrari 54:06
Of course it has now and I know
Linda Nelson 54:08
that they're not gonna let that out that needs me to see that next year. It's
Alex Ferrari 54:12
the last look tenant was supposed to be like this Savior and it didn't do anything. Say tenant did not bring people like me. 20
Linda Nelson 54:21
Isn't that good? So
Alex Ferrari 54:22
I know but based on Christopher Nolan's back, you know, past you know, movies, you would expect it to do you know, real gangbuster, but I think it made total theatrical, he was like 20 million bucks, which is embarrassing for a film like that. But a lot again, a lot of films, a lot of theaters are closed. So it's a really interesting dilemma.
Linda Nelson 54:44
Doing which I was dying. I was actually going to risk going to the theater in December to see them postponed to 2022.
Alex Ferrari 54:53
Right, exactly. Because there's only so many slots that you could fill because now all these things audios is all these big projects that they had in the can? Are they there's only so many, there's so much inventory and not enough slots. So not like and I and I promise
Linda Nelson 55:08
you that they can only put, you know, even when they do open at first it's going to be 25% capacity or something. So if
Alex Ferrari 55:15
you're if you're lucky, right, if you're lucky, and how many screens we're not gonna have the same amount of screens as we did before. So I don't think we are we in
Linda Nelson 55:24
let me know what you think yours, at least are. We're back to any kind of normalcy. And that's if we get rid of the virus, or I mean,
Alex Ferrari 55:35
and that's a big F that's a very, very big if because it's going to eventually go away hopefully with a vaccine and things like that. But this could take years it you know, it could take years for it to be kind of eradicated or at least being dealt with like dealt with like a fool that it's not a terminal thing. But you know, the the trend with theatrical was going down and had been going down for years. So we all knew Oh, indeed, this is completely up but even the studio's you could just start seeing the numbers Marvel you pull out Marvel for the last 10 years out of the theatrical experience. And did Marvel held Disney held up the theatrical, you know, business by themselves with Star Wars, Pixar, Disney movies and all the brands that they own? So it's been going down, down down, I dis just just accelerated everything. I think you theatrical will always be around. I think there'll be some sort of theatrical, but it will not be what it was before. Because some so many people are just like, it's just the same thing as working from home before working from home wasn't a thing now. Everyone's like, well, this is this is so much better.
Linda Nelson 56:45
Well, except that you know, I mean, it is a social experience. Yes, eight nine thing, you know, and so I think for especially for a young, younger audience, that will always be you know, something date type thing. You know, you have to you know, it's it's, you have to have some courting. That's like our part of our courting process, right? First of all, put it delicately
Alex Ferrari 57:12
Linda, you using the word courting, no one uses the word courting anymore.
Linda Nelson 57:18
There you go to dinner, and you got to go out to dinner in a movie in order to get laid, or at least I make out in the car afterwards.
Alex Ferrari 57:31
All right, so let's talk a little bit about the myth of T VOD, and s VOD. In the current world that we live in. Because I've been yelling from the top of the mountain, that T VOD is dead. Unless you can draw for independent films, unless you can drive traffic in one way, shape or form. So the example that you gave, he goes on ESPN that's driving traffic. That's, that's exactly driving traffic. But if you're an independent filmmaker, and you just put up a film with no actors, no star power, not even a niche. Let's say it's just a genre horror film. And you throw it up on iTunes, hoping for it to be discovered. You're dead in the water. So I'd love to hear your opinion on it.
Linda Nelson 58:12
Okay, I can speak with authority on this topic, because I have over 1000 films on Amazon. Okay. Out of the 1003 are making anything on TV. One is doing high five figures, which we discussed. The next one is making Low, low five figures. And the next one is making high three figures.
Unknown Speaker 58:43
High three figures. Yeah,
Linda Nelson 58:45
that's 100 100 Okay.
Alex Ferrari 58:47
And then everybody else is making pants.
Linda Nelson 58:50
Yeah, $5 $3 $2 a month, a month on TV right now. It's just insignificant. Okay. And and every now that movie fact fiction, it did 30 the first month then just dropped off to 10 and then dropped off to you know,
Alex Ferrari 59:12
intervention in transactional and transaction
Linda Nelson 59:14
transactional so what we do is we give everybody two weeks we put you out there on two weeks if you don't have any traction, we turn on fraud. Right? Then you start making money.
Alex Ferrari 59:29
Yeah, and even then though now minutes you start using you used to start making money now
Linda Nelson 59:34
it start getting minutes watch how much you're gonna make depends on how well you engage with your audience.
Alex Ferrari 59:40
Now if you're over that 50% Mark, are you in the six to seven cent world at that point?
Linda Nelson 59:46
No, it's they've scaled that back even. I think you you get you're gonna get you have to get up. In order to make 11 cents. You got to be over 90 By and you got to be over 98 to get 12 cents. It's very very
Alex Ferrari 1:00:06
so your fight you fighting for basically crumbs, you're fighting for crumbs,
Linda Nelson 1:00:10
your your four cents at 50% up, maybe by the time you hit 55 or 60 or up to five or six cents, you know, but it's a slow too slow, right?
Alex Ferrari 1:00:25
So essentially Amazon doesn't want you business, essentially not you personally I'm talking about just as a general statement.
Linda Nelson 1:00:31
Oh, absolutely. Yeah. They're they're weeding out you know what they consider to be
Alex Ferrari 1:00:38
Linda Nelson 1:00:40
Yeah, it's it's, it's sub studio content level content. I mean, they're, they want to be regarded as having quality. You know, studio level quality.
Alex Ferrari 1:00:50
Well, to be honest, I've always I mean, I've had amazon prime forever. And I've always considered amazon prime kind of like the dumpster of a film's like I would find, occasionally you find gems, but you got to cut through a lot of crap that's up on there. Where Netflix is not like that Hulu is not like that. HBO is definitely not like that. These other these other platforms, definitely a more curated, and to me was like that originally as well. They let everybody in because they wanted. They needed content. They needed numbers, but now they're starting to pull back too, which we'll get to a VOD in a second. But, alright, so t VOD. So we can now officially say everyone listening. T VOD is dead. Unless you can drive the traffic to it and sustain it.
Linda Nelson 1:01:35
iTunes, we're seeing nothing.
Alex Ferrari 1:01:38
Nobody's using iTunes anymore. like nobody. Like unless it's a studio. If it's a student
Linda Nelson 1:01:44
studio film so fine.
Alex Ferrari 1:01:46
Yeah, still, people still rent and people still rent studios, films in studios and TV show and especially
Linda Nelson 1:01:51
young families with young children. You know, a couple of young couples with young children. So they'll use Apple TV, you know, to, they'll buy for their kids. And the kids can watch them over and over and over again. Yeah, for 10 years, any film, you know,
Alex Ferrari 1:02:10
yeah. 10 bucks or something like that in your in your rock and roll on for a while. And yeah, I mean, I've done that
Linda Nelson 1:02:15
same thing over and over and over again.
Alex Ferrari 1:02:17
Yes, they will. Yes, they will. I never want to see frozen again. or hear that song. It's still it's I still wake up in cold sweats. So everyone listening to VOD is is officially dead. So please don't think that, you know, I've had people on the show before who've made millions on T VOD. But we're talking about 2012 with one of the examples and another one was like 2015. And they both had massive either stars or audience that they could leverage. So t VOD is dead. So now let's go over to sa with Google Play with LTV LTV, that's included on all the platforms,
Linda Nelson 1:02:56
and also a major one.
Alex Ferrari 1:02:58
So okay, so that's another thing. Another myth that I want to kind of break here today. The the the three major platforms, if you're going to put up something on the platforms, which are the platforms, you need to focus on Amazon, iTunes, Google.
Linda Nelson 1:03:14
Those were the go to this week to blog. Right.
Alex Ferrari 1:03:17
But but there's fan, but there's also Fandango, PlayStation, Xbox, and all these other kind of smaller ones.
Linda Nelson 1:03:23
Don't leave these on Fandango. We're doing nothing either. Right. So we have we have probably we have maybe 50 films on Fandango. And the reason that we even went to Bendigo is they were the first one that allowed us to put 4k Films up. And we've had 4k Films up there for close to three years. Not much.
You know, but indie films don't get any play there at all.
Alex Ferrari 1:03:55
And in a lot of filmmakers will go to an aggregator, and they'll go well, I want to be on all the platforms. So they'll spend five, five grand to be put up on Fandango PlayStation, Xbox, for the pure ego boost to say, we are everywhere. We're on VUDU, we're on Roku, we're on all of these platforms. And a lot of times, most times, you're not gonna see a dime, that you're not gonna get an ROI on that investment. Generally.
Linda Nelson 1:04:26
No, we still do it just because people expect it expected. They just think it's so important. And it's so hard to talk to convince them.
Alex Ferrari 1:04:37
That's why I hope this episode gets seen by everybody watch and listen to everybody. Because there's there's just realities that are currently happening now that filmmakers are still stuck to the old way of doing things. So before it was you have to go out to T VOD, for what three to six months. Then you would turn on s VOD. And God forbid Three years later, you go to a VOD. If that's even a thing, so let's go to S. Let's go to S VOD. Next. So s VOD, essentially, is amazon prime at this point, because there is Netflix and Hulu, but those are like the cream of the crop get accepted to those situations. Is that fair to say?
Linda Nelson 1:05:16
Well, yes, there there are others. Like for example, we're being et et is is a great subscription channel for urban film for black cinema. Sure. And we have quite a few black cinema films in our in our catalog, we probably have the prime black cinema catalog. Because people that want black cinema approached us, we don't have to go asking, you know, to get on their platform. So we've supplied a lot of content to urban flicks. We're in the process of working with bt. And and those are subscription channels. At they tend they, by the way, foreign buyers buy they pay flat licensing fees. However, what's good about subscription channels is that they will let you still be on T VOD. You know, they don't require a hold back from t VOD. And then usually they will have a set hold back for other subscription in a bot channel. So, for example, they might say, okay, we wait you you can't go on any other a bot or? Or s5 for three months? or six months or something like that? Yeah. Well, yeah. So so. So those deals are and there's quite a few subscription channels out there. Oh, yeah, specific. You know, they're, they're, they're genre specific, in some way or niche specific. So, so those, those are worthwhile, and we look at those first, because they do want that hold back. Right. Or if you already hold on to a VOD, then they're going to cut slash the price down really low, those who want it, but they're not going to pay, you know, so it's worthwhile for us to look at those and we can get an answer pretty quick on those. So it's not a big holdup.
Alex Ferrari 1:07:27
And, and the one thing that a lot of these broadcast channels that are now going into streaming plant, like a bt, AMC plus just got announced all of these kind of platforms. One thing that these guys want is, you know, insurance. So can you talk a little bit about you know, insurance and and how you didn't accept it, you didn't accept it, but you didn't require it. But now, some of these old school broadcasters are asking for it.
Linda Nelson 1:07:53
Absolutely. And, and it's interesting, because any, any of the new tech company streaming companies like Amazon, Google Apple, to be none of those have required no insurance, because that was our specialty early on, you know, was dealing with tech companies, because back when we started our company, we couldn't get a studio to talk to you. Right? So we, we were, you know, we went with the innovators, right? And that boys that paid off for us. But, you know, so so those companies, whether it was I don't know, whether it's they just didn't know about it, or what, but they just never required it. And the primary reason they don't require it to this day is that if there's an issue with something, they just shut it off. It's like a light switch, right? Boom, you're out. You know, and so
Alex Ferrari 1:08:50
it's not like you it's not like you produce like 5000 or 10,000 DVDs that now you're like, oh, man, I've lost all my money.
Linda Nelson 1:08:57
That's right, you can't there's nothing to pull, there's nothing to retrieve. You know, and, and so it's very, it's a very simple solution. And the second anyone complains about a film for copyright issue, it's turned off. Very, and then they'll look into it. So like, or, for example, many times, especially like, after the distributor thing happened. When we first started to try and put films back up on Amazon, that had been on there through distributor and other channels, they would say, Oh, no, sorry. So and so that's already been up there by with somebody else. And so we would have to go through a legal process of of supplying a copy of our contract to, you know, their legal department. And, you know, we finally got it down to a process that was fairly quick. And we were able to do it but but that's that's the solution in the streaming world, but in the broad caste world, old fashioned television broadcasts and cable always have required E and O insurance. So now that we are now that all of those companies are branching into streaming to bring that old and totally, they're just going to drop the broadcast, I think that's going to go away completely. I think everything will be streaming within a couple of years. So but as they now add streaming to their old business, they their legal departments are going, Oh, no, we still need to have the, you know, so. So, you know, and they won't let go of it. And the first instance that we had of that was with the team, and different broadcasters have different limits. Because they have different experiences with lawsuits. And so one channel might say, okay, we want, you know, insurance, where every time we get sued, you know, you have to have coverage of at least $1 million for each instance. Others asked for $3 million dollars, for instance, and be ETS for $5 million, for instance. So you know, it and I'm not sure why they set the limits where they do, but, you know, it is, if you want your film to be on one of those channels, you have to acquire that, you know, so we've built a relationship with a couple of different brokerage firms, insurance brokers, that, you know, are able to provide that insurance. And it's not that expensive, and it's not that expensive. Well, a $5 million, per instance, with, say, a $25,000. Retention could cost you up to $10,000. Right? For three year policy. Sure. And a one year policy, the difference between a one year policy and a three year policy is a couple 100 bucks. So you might as well get it for three years, and then you're covered if something else comes up. So that's a really important thing, you know, to remember, but
Alex Ferrari 1:12:06
both of them No, but but a standard 1 million per instance,
Linda Nelson 1:12:09
it's a one by one question. $22,000
Unknown Speaker 1:12:12
Yeah, two to 3000 bucks is gyla.
Linda Nelson 1:12:14
Right? 3000. So, but no, that's not always enough. So you know, you want to. So again, our advice always, is to our filmmakers Don't, don't get it until we get you a deal. Or if we if we get you a deal, we'll make sure that the deal will cover the cost of your get you're getting that, you know, because the filmmaker has to get that email,
Alex Ferrari 1:12:41
right? It's their responsibility. Right? So you can have like a policy, a blanket policy with your company that covers all of them, they won't do that. They will not do that.
Linda Nelson 1:12:53
And I have to tell you, that the application, it's about a 10 page application, that's really, they ask such really detailed questions
Alex Ferrari 1:13:02
as they should, as they should, you know, and, and if anybody wants to know what any, you know, in policy is, you can, yeah, you can go online, on my website and find out or I'll leave a link about what it is to have talked about it multiple times. But it's something that you do need to have. If you want to start playing with the old school guard, if you will, the new school, they don't care.
Linda Nelson 1:13:25
But let me tell you, I think as I said before, I think they're all moving into it now stars has a streaming channel, Showtime, HBO to be at Turner, AMC. So we're, I think eventually they'll all and you know, a really easy way to see is if you have a Roku box, go look in their streaming Channel Store. And you will see right now there are 953 movie channels 953
Alex Ferrari 1:14:00
and growing up on a daily basis, and growing on a daily basis. Alright, so now let's talk about what you've done. I know you've been dying to talk about a VOD, and which is I guess, ad based video on demand or advertising video on demand. A pod was basically the redheaded stepchild. Sorry for all your redheads out there. But the stepchild of a video on demand and it was like the place where films go to die was with the original concept of a VOD is like oh man, if your movies not making any money, or it's just pretty much done. You put you put it up on a VOD or YouTube, like YouTube is a VOD, essentially, you know, but it's just not an exclusive a VOD. It's literally open to the whole world as well. So that has changed dramatically. So can you please tell us your experience with a VOD and how it is currently affecting your bottom line and your filmmakers bottom line?
Linda Nelson 1:15:01
A VOD now is providing the best ROI for our filmmakers. And I think that is going to just keep expanding. And there's very good underlying reasons for that, if you think about how the old fashioned television was, has always been paid for by advertisers, and everybody watched television and everybody sat through the ads or got up and went to the restroom, or, you know, or made some popcorn or whatever, you know, it was just a part of life. You watch television, you watch ahead? Well, when the street streaming came around and on demand, where you were paying for it, basically, there was nothing in it for the advertisers. Right? There they hadn't so they had no interest in it. But when the first a star, a VOD channels started to come about and the very first one that got hugely popular it was to the TV. And to be TV we had been on for more than 10 years. And for the first eight, no one even knew what it was. First of all, it wasn't called to be it was called add rice. And it was interesting how that happened. Because we one of our very first channels that we were on or stations was called casting. And in the beginning, on the internet, it wasn't streaming. It was downloadable DVDs. So in other words, right, that's how I started this whole journey, because the internet wasn't fast enough to watch over the internet, right? But you put by instead of going to the video store, you could download the movie and watch it easier, then go to the video store, right?
Alex Ferrari 1:17:00
Are you arguably the technology was a little bit wacky, let's say right?
Linda Nelson 1:17:04
So there were two. Amazon was the first was unbox, right. And our movie shifted was the first indie film on unbox. And then there was another one called Kashi. And it was started by this guy by the name of Tom Hicks. Well, Amazon survived, but Kashi did not because they weren't charging enough. They were giving 70% to the filmmakers. And it was so early that that it wasn't enough for them to survive. So they wound up you know, closing that company. Well, then Tom Hicks got involved in a whole new business. And that was the start of ad rise, which is to make advertising based streaming. And that ad rise became to be and it was only renamed to Toby I don't know, three years ago, something like that. And and when we first started doing it, people were just as adamant about not doing a VOD, is they were putting your movie whole movie up on YouTube. Right? It was like, Oh, you're giving away my movie for free. And I still have people that say all my movies for free on this channel. You know, they, they just don't get the concept that. Yes, it looks like it's free. But people are watching ads, and you are getting half the advertising revenue. Right? You just don't understand coming in from a different place. Now, what's happened is that the advertisers now see that everybody's going to streaming so their way of getting in on the streaming business, right is to go with these Avon channels. Because it's just they've created a new television. Avon is the new television. And it's an it's a better television than the old television. Only in that you can watch what you want when you want to watch it. You no longer have to be home on Tuesday night at nine o'clock to see such and such show are recorded or
Alex Ferrari 1:19:22
recorded on your VCR
Linda Nelson 1:19:24
or write us to TiVo is what it was called TiVo.
Alex Ferrari 1:19:27
That's what I'm talking about old school VHS, you know, automatic record. Yeah.
Linda Nelson 1:19:33
So now, so so it's only natural that that the advertisers have glommed on to streaming. And so that's why you see that, especially that the company is a big media companies like universal, right, that are losing their advertisers from their regular linear TV. Right. They have moved these, watch their Advertisers leaving them and going to streaming. So that's why universal part of what universal has peacock, which is streaming a VOD, right. So it's a way to transition from the old school broadcasting and cable into modern streaming and modern television. So that's why I see a VOD as you know, the the new frontier for filmmakers to earn revenue.
Alex Ferrari 1:20:31
Now but but with to be specifically because there's to be in Pluto and there's an IMDb TV and peacock and a couple other ones as well. But with Toby first, lots of Juliet, lots of love and Excuse me. And growing as I'm sure there's five of them that just opened up while we've been talking. The the issue I saw was that originally to be was wide open, and there weren't a lot of movies up there. So any movies that did get up on the platforms, they would get a bigger chunk of the advertising revenue, because it was less competition. Now there's a lot more competition on on to be are you seeing revenue drop per movie? We'll be right back after a word from our sponsor. And now back to the show.
Linda Nelson 1:21:23
The advertising, it's measured in ecpms, you know, per 1000 views of an ad, right? The number of ad impressions, we're getting paid the same amount for the ad impressions that that we've always got paid per
Alex Ferrari 1:21:41
title, is it? Is it a per minute per ad, but per title i'm saying is like the pie smaller per film, as it is because before the 10 Films up on to be, each film would probably get a lot more ad ad placement and a lot more plays because there's less competition, but now that there's so many more, so much more content on to be the ad revenue still might be the same, but the per film might be less or am I mistaken?
Linda Nelson 1:22:08
Like any platform, your maybe your top 10 15% of your movies are making 90% of the revenue, right?
Alex Ferrari 1:22:16
It's the 8020. It's the 80 20%.
Linda Nelson 1:22:18
Yeah, it's it's that 8020 situation. And that's true. I'm just about every platform that we're on. But the actual amount of money we're getting paid, you know, per ad is pretty consistent.
Alex Ferrari 1:22:36
Is that enough? Do you mind? Do you mind asking? Was that number kind of classified as far as a per ad
Linda Nelson 1:22:40
between nine and 11?
Alex Ferrari 1:22:43
sensor? Oh, dollars? Yeah. Oh, per per 1000 views? Yeah, per 1000 views, impressions for impressions. So that's actually pretty good. And that's actually pretty good. And I've even I've had filmmakers who've decided to put their movies up on YouTube. And if they have a monetizable channel, and they have a lot of views, some of those cpms. I've seen depending on the on the genre and things we're talking about 20 $30 cpms, on their 1000 1000 views of what they're
Linda Nelson 1:23:15
doing very definitely make money on youtube movies.
Alex Ferrari 1:23:18
Yeah, absolutely. It's, it's fairly insane. But this is this is this. This is what we're trying to do with this episode is to change people's mentality about about what the realities of the world that we live in. Currently, as of this recording is, in a year or two. Avon might be old. I don't know, maybe there'll be some new thing that you and I don't even know.
Linda Nelson 1:23:42
But for the immediate future, yeah, BOD is where the business is trending towards and is in. Something that's interesting to know, is that different Eva channels have different demographics. Mm hmm. So my top 20 list on tubi is extremely different than my top 1020 lists on Pluto, or like top 20 list on IMDB TV. It's a very, very different demographic. You'd think it would be all the same, but it's not.
Alex Ferrari 1:24:20
Yeah, one movie that does well on one platform could tank on another.
Unknown Speaker 1:24:24
Yes. And and
Linda Nelson 1:24:28
I think why that part of why that is is that to be was first. And it was available to people that couldn't afford cable and couldn't afford a lot of subscription channels. So they watch we're forced to watch for that.
Alex Ferrari 1:24:52
Right? But isn't but
Linda Nelson 1:24:54
is that and that audience grew and is growing? Yes. And so to be tends to be that, you know, that audience, although it's changing, and people are other people are starting to change but but that's not true of IMDb TV because people that have IMDb TV one, they're getting on there through Amazon Prime. So there are people that had money to spend on prime. Right. Right. Right. So So is it again, Democrat, Democrat?
Alex Ferrari 1:25:30
Now, are you seeing are you seeing that the, the numbers on these AV platforms are starting to go up because we are in an economic downfall right now. And it's,
Linda Nelson 1:25:42
all the people are at home, right.
Alex Ferrari 1:25:45
And then they've lost their jobs, and they don't have the money and they still want to be entertained. So they'll download, they'll buy Roku, a Roku connection, or a box for what does Google cost like 30? bucks,
Linda Nelson 1:25:55
Roku? their premium box, I think is like 60 or $70. And, or you can get their streaming stick, which is a lite version of it for I don't know, 30 bucks. Right? Exactly. for Amazon Fire
Alex Ferrari 1:26:13
Fire Stick, right? Yeah, cuz that's like 20 bucks or 30 bucks, right?
Linda Nelson 1:26:18
If you buy a new TV, it's all built in. Right?
Alex Ferrari 1:26:21
Exactly. So for no money, you could just if you bought a new TV, if you're lucky enough to have a new TV, but if you don't, you could buy a 20 to $50 box, essentially, have access to all the content you want for free, just have to deal with ads. And for somebody in the family that is hurting or lost their jobs or our economy's really hit them hard. This is an option. And it's becoming more and more so not only here, but around the world. Now, another thing, how are you? How are your sales internationally? And how, how are you generating revenue internationally? Because before I know prime was a very big deal for you internationally, but how are you doing it now?
Linda Nelson 1:27:03
Well, every month, more and more people are streaming globally. And every month. channels are increasing their territorial reach, like when TV for the first couple of years was only us. And then they added Canada. And then they added UK and now they're adding Latin America. So and they plan on expanding. So I think we're gonna see the streaming channels go global. I really do.
Alex Ferrari 1:27:39
Right and so but for right now we're what are the trends that you're seeing currently, in regards to revenue streams coming in for independent films internationally? like where are you making money? internationally?
Linda Nelson 1:27:51
UK is probably you know, English speaking territory still, is, is the primary.
Alex Ferrari 1:27:57
But is it? No, I understand. But is it like as far as a T VOD, is it a VOD, what is the form?
Linda Nelson 1:28:03
Oh, it is prime? Because that's where we're in the most territories. Got it. So prime is
Alex Ferrari 1:28:08
still internationally prime is still generating revenue for you.
Linda Nelson 1:28:11
And you felt hurt? Yes. And prime and prime outside the US and UK is not as dependent on that car.
Alex Ferrari 1:28:20
Oh, because they want market share in those areas?
Linda Nelson 1:28:22
That's right, because they're, they're growing those markets. So they have higher pay rates,
Alex Ferrari 1:28:29
right? Because they want if they have content in those markets, and God so and that's another thing. I think we talked about this privately, if you can have a dubbed version of your film, or a subtitle version of film, how does that work? And does that generate revenue for you?
Linda Nelson 1:28:43
Alright, so first, look at Amazon first. There are 68 territories that are English speaking. And so automatically, we can put you at all those 68. Although we have a tendency if we think something has the potential to sell at a market at AFM or can we'll hold off turning those on until we go to the market. And then that way, if we say sell do it all right deal for the UK or for Japan or whatever, then we don't, then we don't turn those on private, then after the market. We know what we can sell them what we can sell, then we can go back and turn it on everywhere where we didn't sell it. Right. So that works really good. So then, if you get French subtitles, and rev does subtitles in all languages,
Alex Ferrari 1:29:33
right? Yeah, I'll put a link. I'll put a link in the show notes. Rev is
Linda Nelson 1:29:36
very reasonable pricing. French gives you 30 more territories. I had no idea that French was the actual national language in 30 countries still.
Alex Ferrari 1:29:49
I mean, they weren't they weren't Empire.
Linda Nelson 1:29:50
I mean, I didn't realize that. I didn't know. I mean, I knew they were big, but they didn't realize there were that big. Sure. Sure. Right. Right. So they were huge. So So that's 30 more years. And then for Spanish, you can get 22 more. So that brings you over 100 just for those three. We don't in general, we don't recommend you doing single language countries like Italy, or Germany, only Italy. Well, Germany. Germany is requiring dubbing.
Alex Ferrari 1:30:21
And that's expensive.
Linda Nelson 1:30:22
That's expensive. Probably like five to eight grand. Sure.
Alex Ferrari 1:30:27
Yeah. Cuz you need actors. You need a Yeah, it's a whole thing.
Linda Nelson 1:30:29
And same with Japan, Japan, a date for two for streaming. It's got to be duck. So those for those countries, we try to do foreign sales to buyers. So right sales at the market, you know, and then they'll take care of the Guppy. Right, right. Right. Right. All right. And and, and sometimes they'll actually give you a dub version of it. You know, like, and same with China. So So those three, we don't do with Amazon, we do with foreign buyers?
Alex Ferrari 1:31:05
is China even a market anymore? I mean, I know the embargo is really hurt the market.
Linda Nelson 1:31:11
They're not happy with us right now.
Unknown Speaker 1:31:13
Is this obvious?
Linda Nelson 1:31:16
We've been very mean to them. Yes. China flu?
Alex Ferrari 1:31:21
Yes. This exact among other among other things. Yes. The trade embargo, and the tariffs and all that stuff?
Linda Nelson 1:31:28
That we'll we'll see what happens with the election. Sure, depending on who's president that could change dramatically.
Unknown Speaker 1:31:36
So pre so
Unknown Speaker 1:31:36
Alex Ferrari 1:31:38
Right. So pre this administration, I sold my I sold this is made to China in
Linda Nelson 1:31:45
40 films to China.
Alex Ferrari 1:31:47
Right. So I mean, there was a market. Oh, it was good, buddy. Absolutely was good. But so it's all dependent on that. But right now, there's still kind of like, are you selling anything to train anymore? Or not as much?
Linda Nelson 1:32:01
You know, what, we've got a couple buyers, recently. And I think what they're doing is they're like, trying to hedge the market thinking, Okay, we're gonna buy now, because it's gonna open back off, right? Yeah.
Alex Ferrari 1:32:16
All right. Let's see. It's it's an ever moving playing field. The rules are changing all the time. the playing field is changing all the time. The players are changing all the time. And I want filmmakers listening to understand that you have to stay on top of this just because you started your movie 12 months ago. The distribution landscape is not what it was. When you started the process of making your film, you have to stay on top of it almost all the time. And the players are changing. The scams are changing. I mean, I don't know about you. I heard the other day, I had a consulting client, showing me a deal. This company wanted the rights in perpetuity in like literally is blatant
Linda Nelson 1:33:00
as it was like they're out buying the film,
Alex Ferrari 1:33:03
but no money up front. Oh, no money up for it was a percentage deal. Oh, it was like a 35 or 40% deal. For the for them and then the filmmaker to get the rest. And it was a perpetuity it was in perpetuity. And I'm like, Oh no, no expense cap, no expense. Kevin, also, you'll never you're just you're basically just giving them your movie. Okay. You get it's a gift. It's a gift. It's a very generous, very, very generous, but this is the kind of stuff that's happening all all the time. So in the future, where do you see I guess we kind of answered that question, but in the future Do you see a VOD is a place for filmmakers that's gonna be
Linda Nelson 1:33:43
for the foreseeable independent filmmakers. Sure, right? You know that that a VOD? And, and some s VOD.
Alex Ferrari 1:33:53
And some NT VOD. If you have an audience, you can drive traffic.
Linda Nelson 1:33:56
If you if you have if you can drive the business or you have serious names, then you can get away with it. But no, but it's
Alex Ferrari 1:34:07
Let me ask you one question. This is a this is going to be a hard question. So feel free not to answer it if you don't want to. The The question is, what kind of budgets? Like if you have a $350,000 movie, if you have a $500,000 movie? can you expect to generate an ROI on that investment through a VOD, specifically, or just a VOD or just like basically the revenue streams that you're talking about? without selling international without? Like, what's that? What's the boiling point where you're seeing like, you know what I really mean, if you movies over 150 200, and again, in this case by case basis, I know that every movie is different. But generally speaking, if it's $100,000 movie, I mean, obviously you have a $10,000 movie that has Nicolas Cage in it, you have a really good chance of making your money back. So the lower the budget always better, but there's a balance so I don't know what what do you think?
Linda Nelson 1:35:00
I think that if you have a decent film that you spent $150,000 on, you can expect to recoup in a couple of years.
Alex Ferrari 1:35:09
Right? But if you haven't, but once we get we start getting into that half million 600,000 set, you really have to you have to you have to have all all cylinders firing at all times, hitting perfectly every single time.
Linda Nelson 1:35:24
Yes, unless there is something going on in the market that makes your content valuable, an anomaly,
Alex Ferrari 1:35:36
an anomaly basically.
Linda Nelson 1:35:38
Well, our black cinema, we have lots of films that make 345 $100,000 Okay. It's an underserved market right now. Right. Right. So how long that will last? I don't know.
Alex Ferrari 1:35:58
I mean, Tyler Perry built an entire Empire off of that niche.
Linda Nelson 1:36:03
You know, so it, it The answer is it depends. So if you don't necessarily and none of those have stars, right, don't have any stars. And, you know, a couple of them might have some Instagram. So, yeah, but but, but in general, it's not necessary for them to be successful. It has to be a good start has to be a good story and have good production value.
Alex Ferrari 1:36:33
But generally, that's not enough anymore.
Linda Nelson 1:36:38
But, you know, but that is an underserved market. And, and we see quite a bit of success for that. You know, so
Alex Ferrari 1:36:45
Alright, so what advice would you give a filmmaker that is going to sell their film in today's marketplace?
Linda Nelson 1:36:55
I would keep I would not do anything more than an ultra low budget, right? If you're making a SAG film 100 100,000
Alex Ferrari 1:37:01
and below 150,002 50.
Linda Nelson 1:37:06
sag Oh, for low budget. Okay. So I wouldn't go over that. If you could, if you don't have any names, I wouldn't go over 100 grand. We have a new low new movie coming out. It's supposed to have a theatrical release in an arena on the 30th called blood from stone. And it's a contemporary vampire film. And meant to be you know, a Halloween release. But as of today, the theater sold out open, so it doesn't look like it's gonna be open on the 30th. So, we don't know, there's a very slight chance that in the next two weeks, because California is one of the few states that actually has a very low infection rate right
Alex Ferrari 1:37:55
now, currently, as we as we speak right now.
Linda Nelson 1:37:59
Next week, so I don't know. So anyway, if it doesn't, then we'll demo just forget about the theatrical go straight to straight to VOD, but that, you know, that film we were able to keep in low six figure. And that's, you know, you have to do that very low six figure. And I think that will be fine. No, without scarp doesn't have
Alex Ferrari 1:38:31
genre, but its genre. Its sub niche of genres. Its horror, and its vampire horror. So like zombie horror, Ghost horror, or,
Linda Nelson 1:38:39
like, I would stay away from relationship drum genres. I would stay away from cabin in the woods. It's, there's certain ones that are just so tired and overdone. Right. Right. That, you know, and I would not reach too far into serious subject matter right now. Like,
Alex Ferrari 1:39:09
don't go too deep.
Linda Nelson 1:39:10
We've gotten, we've gotten probably, I would say, in the past six months, maybe 20 really beautifully done movies about mental illness.
Alex Ferrari 1:39:21
But nobody wants to say that right
Linda Nelson 1:39:23
now. I just think it's a very, very hard time.
Alex Ferrari 1:39:27
But we'll go with documentaries. But documentaries with that same topic might do better than a narrative or you're saying none at all, even with documentaries.
Linda Nelson 1:39:37
I wouldn't even do it with a documentary right now. And, you know, again, we have several of those and it's just you know, I think people are more receptive to that when they're when we're having better time. Right then they can be a little more contemplate of and look at some serious subject but but right now You know, people are suffering enough in their own life. And it's, they, they need something that's uplifting.
Alex Ferrari 1:40:06
And that is why if you guys are watching, you guys know that I always have a Yoda in my office, my trusty co pilot in life in the 70s, which I was, I was born in the 70s. I'm not that old. But I do but from from history books and films I've seen that is the late 70s. And mid to late 70s. It was a really dark time in our country. Economically, we were rough, the Nixon thing happened, the war was going on. And there was these dark, depressing taxi driver and, and you know, the Godfather, like these really just heavy films, then something called Star Wars showed up. And everybody was like, Oh, my god, yes, I want to escape into a galaxy far, far away. And that's where we're actually in right now. We're in a very dark time in our in not only our history, but the world's history. And it ain't over yet, Jim, folks, we don't know. We don't know where this trains go. And it's it is a dumpster fire that's wrapped in a in a train that is just careening down a dark tunnel. And we have no idea where the exit is or where the exit is. So it could be another year, it could be another five years. And I don't want to say that. But Oh, God. I know, I don't want to. But I think that movies moving forward, do you really kind of look at the marketplace? And I think you're absolutely right, you have to create content, that is going to be uplifting, that's going to be escapism. That's why the Marvel films do so well. That's why the superhero, that's why superhero films have been doing so well. It's complete escapism, it's complete escapism. So it's, um, it's an we're in a, we're living in a very interesting time. Linda.
Linda Nelson 1:41:52
I agree. I'm very glad that I'm, you know, in this particular part of our industry right now, because it is the part of the industry that is suffering the least. And we are able to give people something that can allow them to escape. And, you know, there's very little entertainment right now, there's no sports, there's no concerts, you know, there's no theme parks, so at least we can be putting out, you know, we feel good that we're putting out movies that can entertain people and, and, you know, like, help pass the time.
Alex Ferrari 1:42:30
Now, one last question, I'm going to ask you, do you, do you cuz you're doing very well, but you've been, you've actually been prepping for this moment for the last decade. And plus, so you were in the online, hey, this is the future thing, as long as I've known you, and and many years before that. So you are primed to take advantage of this moment in time and what's coming down the line. So you're actually prepared. A lot of other distribution companies, especially the older ones, and especially the the larger ones, were not prepared and aren't ingrained and don't understand this side of the business nearly as much as a company like you. And also you're a small limb Lumber Company, you can pivot very quickly. You're like a speedboat, where a lot of these guys are giant carriers that take days and weeks and years to kind of even make a slight adjustment. So you are perfect kind of company to be in this moment. What do you think is going to happen to the distribution side of the business? Do you think that you're going to start seeing companies crash and burn around you like, like in 2008? Because I still think we haven't even begun to feel the economic hit yet. So
Linda Nelson 1:43:45
I absolutely think that we are going to lose probably half the distributors out there. And the reason I say that is that anyone that's been in business, you know, like more than 10 years, and there are many of these companies that been around for 30 years. Right? Those ones that started 30 years ago. They have big offices in Beverly Hills,
Alex Ferrari 1:44:10
Linda Nelson 1:44:12
They have huge staff. They have warehouses filled with DVDs, and screening rooms, and all of this huge overhead. I don't know how they can survive. I just don't know how they can survive. And because they're so late getting into the streaming business. There are very few of these companies that do what we do in house, right? We, we take in films, we QC them, encode them and deliver them to the cloud now we have a cloud based inventory system where we manage our content in the cloud. So these other companies, they're still they have deals, output deals with labs and post production, they're still sending out hard drives. And they're sending, they're sending the film's to them to get encoding and delivered. So that's a huge upfront expense that they have. Now, granted, they're recouping that from the revenue that comes in on the film.
Alex Ferrari 1:45:28
The filmmakers aren't making that money.
Linda Nelson 1:45:30
The filmmakers aren't making that money, but also, with this 8020 thing. Most of their films are losing money. So they're spending a lot of money that they're never going to even recoup themselves.
Alex Ferrari 1:45:42
Right. Right. And we still haven't seen it, we still haven't seen I feel we still have not hit the bottom of our economy. Slide the bottom we
Linda Nelson 1:45:49
have it so so now that we have our have all of our content residing in the cloud, if a new big, you know, channel comes to us and says, We want 300 films, we could literally send them an email with a list like say somebody comes and says, Okay, I want all your horror films, say 300 of them. All right, I can with an email deliver that, because I'm just sending them a link to a bunch of buckets on AWS that they're going to grab those films from. And if they're a tech, good high tech company, like we are. And it just goes bucket to bucket in the cloud,
Alex Ferrari 1:46:36
and never even
Linda Nelson 1:46:37
never use the internet,
Alex Ferrari 1:46:38
never download. It's all within the system over there. It's always
Linda Nelson 1:46:41
in the cloud. It's cloud to cloud, and a b2b. It's cloud to cloud.
Alex Ferrari 1:46:46
Right? Exactly. And a lot of these companies
Linda Nelson 1:46:49
like last year, whenever I think about it,
Alex Ferrari 1:46:51
last year, last year, when I went to AFM, you and I were both on a panel, we're going to be on panels this year, again, at the virtual AFM. I was walking around AFM it was I think it was 40 or 50% less people. I think it was down 60% as far as vendors are concerned. And I literally was walking over carcasses of dinosaurs, like you can, like you could see the old school distributors with the cigar. They look like they're 105 years old talking like it's 1985 I would see it and then you would see it. So those guys, they can't survive in this environment. They're barely were surviving pre COVID. So you just said something very interesting. You said 50%. of distributors. And that, by the way that also can include some very big distributors, big, big, big companies, that studios that can easily go down as well. Who do you think is going to go down with them? The films and the filmmakers that they have in their catalogs, the back money that has to come in, because when it goes down, the ship goes down, they're gonna take everybody with them, like just like one distributor went down. We're still waiting for money. We're still waiting for money on that. So it's gonna be very, very interesting time. And I think it's gonna be a very sad time for a lot of filmmakers, as well as the distribution company, but distributor companies going down. But do you have any hope that after Rome burns, because I've been yelling that Rome is burning for a long time, after Rome burns, the new system that will come up around it will be something that will hopefully be better and have more access and benefit filmmakers more than the currency because the current system that's been around since Chaplin's day, was never designed to help filmmakers was never designed to help make money for filmmakers. Do you think this new system would? Is there a chance that?
Linda Nelson 1:48:53
I don't know I think it's almost part of being a new filmmaker. It's
Alex Ferrari 1:48:59
you have to be abused. You have to be taken advantage of Got it. Got it.
Linda Nelson 1:49:03
It's like your apprenticeship, you know, wow. struggle in the beginning. Right? And it's like who is it a Malcolm Gladwell says you need 10,000 hours of an expert
Alex Ferrari 1:49:15
is good to beat. But to be fair, Linda, even professional filmmakers are having problems making money with their films, filmmakers have been around for 1015 years making money. So it's not just the newbie that's gonna get abused.
Linda Nelson 1:49:28
But the people that that are going to survive are the ones that educate themselves and stay you know, stay educated on where the market is and, and and stay up with new technology because that's that's what's happening. I I would not be shocked to see a couple of the major studios go down here whether it's paramount. So we've already seen Fox go away,
Alex Ferrari 1:49:55
so forth for and I've said this before, and I'll say it again the four companies that are vulnerable. are paramount. Lionsgate, Sony, MGM, they all have massive libraries, massive libraries, that someone like Facebook, apple, Amazon, or Google could come in. And buy. Netflix is also a studio that is vulnerable. It is vulnerable. I think it could be purchased by Apple could come in and buy Netflix. The only studios I think that will survive this without being touched is Disney Warner's and universal because they have the most diversified business plans. Right? They have the most of us. So those are the ones that feel good. I mean, there's no why hasn't MGM been purchased? Like just for their library? Sony? I mean, if you've read that book, the big picture, I mean, I mean, it's Sony's The only thing keeping Sony alive is their television department. And the occasional james bond that comes out every five freaking years. Yeah.
Linda Nelson 1:50:56
And it's, you know, the, the old studios, they let other tech companies just like came in until
Alex Ferrari 1:51:04
Netflix changed the game. And that's what I was saying. This is the day it took Disney 10 years to release Disney plus 10 years, Netflix had a head start because the Netflix streaming started in 2010. It sucked. But they started in 2010. It took 10 years and then now everybody now because of Disney plus and everyone started jumping on the bandwagon in 2019 and 2020. But it took them 10 years to get going. So all these are the company
Linda Nelson 1:51:32
universal picaxe the only I don't see a warner brothers. You know, channel. No, it's HBO
Alex Ferrari 1:51:41
HBO max. That's Warner Brothers chat with HBO max. And they're leveraging a very, very good brand. HBO is an amazing brand. It is
Linda Nelson 1:51:50
but Warner Brothers was a great brand.
Alex Ferrari 1:51:53
It was but you know and now 20 Century Fox, and 20 Century Fox is gone like that brand is gone. Disney erased it 20 Century Fox, there's now 20 I saw the logo for the latest. Ryan Reynolds movie called the good guy says 20 century studios and the logo, the old school 20 Century Fox logo. But at the beginning because it's a it was a it was kind of like leftover in their purchase. It's called 20th century studio style. Until it's gone completely into the all these films come in and go out. It is Who in their right mind would have thought that Disney could buy Fox and everything. I mean, that's an insane thing. And so it's not beyond someone like Apple who has, I don't know 400 billion cash, cash cash. They could they could buy Disney.
Linda Nelson 1:52:41
They really could do something because Apple, iTunes and Apple TV are just not there.
Alex Ferrari 1:52:47
No, they're not. But they're they're waiting. They're waiting in the wings. And they look AMC, Amazon was gonna buy MC, oh, someone's gonna buy regal, someone will buy regal, and someone will buy AMC. And a lot of people like, Well, why would they buy a movie theater chain? That's there's no money in that. I'm like, No, there's a difference if you've been to the El Capitan
Unknown Speaker 1:53:05
court, that is
Alex Ferrari 1:53:06
the model. That is the model that makes sense
Linda Nelson 1:53:08
Alex Ferrari 1:53:10
not only premium theaters, but what do they have their film entrepreneurs, they've got an entire disney store next door. And they have it's an event going in there and they have answered so all of a sudden, and if they own the theater, guess what they own 100% of the revenue coming into the door, so they have to share it. That is a business model. And there's a lot it's the whole art landscape is gonna change dramatically in the next two to three years.
Linda Nelson 1:53:36
We shall see,
Alex Ferrari 1:53:37
we shall it is exciting, it is terrifying all at the same time, Linda,
Linda Nelson 1:53:41
and Linda feel very confident that we're gonna be around to enjoy it.
Alex Ferrari 1:53:45
You've positioned yourself, you've positioned your company in a way that is that you'll be able to survive and even if something comes there's going to be some things that you guys are not going to be prepared for your small enough of a company that you're just you could just box and weave you're not this big, giant bloated vest. That's gonna take forever and you have bureaucracies that go through and stuff like that. No, you just like, you know what, we're moving this way tomorrow. And that's and you move. And that's and that's the and that's the difference between a smaller company and these large conglomerates. But listen, listen, we could we can continue to talk for a while but I appreciate you taking the time because I know you are extremely busy right now I am with a ton of stuff AFM is coming up as of this recording and MIPCOM is started as well and all of that kind of stuff. So I truly appreciate you taking the time out to talk to us. And give us the latest updates on the realities of the film distribution business as it is today. So again, thank you so much. I will put links to everything to how to get in touch with Linda on the show notes. Linda, thank you again and give my best to Michael you guys do an amazing job over at Indy. Right. So thanks.
Linda Nelson 1:54:53
And I want to thank you very much for the opportunity. It's always great to have a chance to you know through you Talk to our filmmakers, you know our future filmmakers and, and be able to share some information that helps them to navigate these murky waters.
Alex Ferrari 1:55:09
shark infested as I like to call it shark infested. Thank you again, Linda,
Linda Nelson 1:55:13
I'll talk to you today Take care.
Alex Ferrari 1:55:16
I want to thank Linda for coming on the show and dropping those knowledge bombs on the tribe. Thank you very, very much. If you want to get links to anything we talked about in this episode, including how to reach out to Linda and indie writes head over to the show notes at indie film hustle comm forward slash 436. Now I always like to put a disclaimer anytime I have a distribution company, or someone representing a distribution company or aggregator on the show, please do all your homework and due diligence with anybody you're thinking about doing business with in the distribution space. I've had a really great experience with my films with Linda, but you should absolutely reach out to other filmmakers who have worked with indie rights and see if they are a good match for your film. And if you haven't already, please head over to filmmaking podcast.com and leave a good review for the show. It really helps us out a lot. Thank you so much for listening, guys. As always keep that also going. Keep that dream alive. Stay safe out there, and I'll talk to you soon.
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