IFH 361: The New World of Distribution at the American Film Market with Jonathan Wolf

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Today on the show we have Jonathan Wolf, the managing director of the American Film Market or AFM as it’s known. The AFM has gone through many changes over the years. In recent years the world of film distribution has been turned upside down and AFM has been changing along with it. I have the honor to be moderating a panel on Micro-Budget Filmmaking at this year’s AFM. The times they are a-changing. I sit down to talking about Netflix, streaming, OTT, self-distribution, and how you can screen your film to hundreds of potential buyers at the AFM.

Jonathan Wolf is Executive Vice President of the Independent Film & Television Alliance (IFTA®) and Managing Director of the American Film Market® (AFM®). The Independent Film & Television Alliance is the global trade association of independent producers and distributors of motion picture and television programming. Headquartered in Los Angeles, the organization represents and provides significant entertainment industry services to 125 member companies from 20 countries.

Since his appointment in 1998, Mr. Wolf has guided the growth and repositioning of the American Film Market (AFM), the world’s largest film market. A pivotal destination for independent filmmakers and business people from all over the world, the AFM is a global marketplace where more than $1 billion in motion picture production and distribution deals are closed each year.

The eight-day Market hosts more than 8,000 industry professionals and screens more than 306feature films. Participants come from over 80 countries and include acquisition and development executives, agents, attorneys, directors, distributors, financiers, film commissioners, producers, writers, the world’s press, and all those who provide services to the motion picture industry.

If you want to sell your film then get ready to take some notes. Enjoy my conversation with Johnathan Wolf from the American Film Market.

Alex Ferrari 0:32
Now guys, today is r a f m episode our American film market episode and today's guest is the managing partner of the AFM. Jonathan wolf. Now Jonathan was on the show a few years ago, but things have changed a lot in the film distribution business, as you guys well know. So I wanted to bring Jonathan back on the show to talk more about the new world of distribution streaming services. Ott's the impact of AVOD and SVOD in distribution and how independent filmmakers can actually screen their films in front of hundreds of buyers at the AFM. So we go into a lot of things that we did not go over in our prior episode. So if you guys really want to get into what you can do at the AFM which by the way, guys, the AFM is a very powerful film market is a place where over a billion dollars of business is done. Every year of buying and selling movies in production, or finished product, it is still a very powerful force in the filmmaking distribution marketplace without question. And if you've never been, you should definitely go it's an education to go there just to see how movies are bought and sold and what people are looking for really testing the marketplace. It's a really, really great education. And speaking of education, you might have mentioned this on the show before but on Tuesday, November 12. I will be moderating a panel at the AFM. I'm very honored to have been invited. It is a big honor to be invited to speak on the stage at AFM. And I am humbled to say the least. It will be November 12. Tuesday at 2:30pm. The AFM also puts on an education conference. So there's tons of panels, tons of talks that go on throughout the market, which is really, really invaluable. If anything, it's worth it just to go for that alone. And of course, I will be doing some sort of meet up with all of the tribe, including filmmakers that have had dealings with the stribber, we're going to sit down we're going to talk we're going to share ideas and notes and see how we can continue to help that situation out. But we'll also just be well I'll be walking around. So if you're there, reach out to me, you can email me at [email protected] And I'll see when we can get together I'll be there most weekdays not every weekday, but most weekdays so it's going to be pretty amazing. But without any further ado, let's get to today's guest, Jonathan Wolf from the American Film market. I'd like to welcome back to the show returning champion Jonathan Wolf, how you doing, sir?

Jonathan Wolf 4:53
Great. Glad to be here.

Alex Ferrari 4:54
Thank you so much for coming back on the show to talk all things AFM. So before we get Started I know a lot of people might not even know what the AFM is they haven't heard your, your all the other interviews. So can you just explain to everybody what the AFM is, in general,

Jonathan Wolf 5:08
AFM is a film market. It's primarily where production and distribution companies license their films to territorial buyers from around the world where they find the access to the marketplace. And it's also where producers and writers and those with packages come to this marketplace to find production companies interested in participating in that film. It's it's a mecca of business.

Alex Ferrari 5:35
Yeah. And that's, that's a real big point here business, as opposed to, you know, as opposed to film festivals and things like that what I wanted to ask you, you've, you've come out publicly and said that, you know, filmmakers really shouldn't submit to film festivals if they're trying to sell their movie, why shouldn't filmmakers submit to film festivals if they're trying to actually make money with their film?

Jonathan Wolf 5:57
Well, I think back up for a minute, we talked first about the difference between the market and festival. Okay, and I think once we talked earlier, once festivals are cultural events for their community, the festival director is sort of like a museum curator, bringing works of art to the community for a short period of time that the community wouldn't otherwise get to see film markets or trade shows. This is where film is bought and sold and licensed and financed and and eventually gets into the marketplace. And what happens when you bring a film into a film festival. that's never been seen before. You risk one reviews, the decision of when a film should be reviewed is something that's strategic, it's made by the those involved in marketing. And sometimes it's the review is from a curated audience, if you have a horror film, you want to make sure that you don't have an audience of over 70 at the Palm Springs Film Festival, watching it at eight o'clock or 10 o'clock in the morning, before they've had their first Mimosa. You're not going to get a good review. So you not only decide who win, but you also decide who's going to be in the audience. When you when you put a film at a festival, you lose control, you don't decide when it plays, as I said before, you don't decide who's in the audience. And then let's say in a festival, you you get an award some notoriety, Best Actor best something and you're at a regional Film Festival. And then you start to use that buzz for promotion. The word buzz is something that we all know about. But we don't understand it so much in the wholesale side of the world. And the retail side, when there's buzz on a film, that buzz is built to a crescendo by a skilled marketing team, the times that peak of buzz right to end the film is going to be released on the business to business side. Buzz also burns out over a period of time. So you have to decide when it's going to peak. If you're going to get peak buzz from being in a festival, you better be ready the day after the screening to capitalize on that. And what happens is someone screens a film at a festival, there are no buyers, there's there. They're no production companies there to acquire the film and the audio in the audience. And a few months later, they start knocking on doors. They're going to companies looking for distribution. And they said hey, we got a lot of bugs we got a lot of feedback on this film was all positive won an award. And the person who sees the film doesn't know why three months after the buzz there is still being pitched where others in the audience and turn it down Are they the last person that's ever seeing the film to to get a film sold, you want to create an auction environment, you want to create urgency. And this is usually done at a market. Now there are a few festivals where business is done. There's some business done at Sundance, they'll more the deals there are closed before the festival than after we've talked about that later. But some deals in Toronto for us theatrical distribution, and a couple others here and there. But for the most part, it's not where businesses die. When you go to a film market. And you say here is a film that has never been seen at a festival before we are premiering at the market. You got a full audience of buyers and when I say a full audience, if you have 50 buyers in in a screening at the AFM, you've got a huge audience. Our average audience is 26 or 27. Here at a festival have 50 people you'd be crying. But this is the difference between a market and a festival. It's all about the business. It's all about the licensing of film, and ultimately getting as much dough for the producer as possible.

Alex Ferrari 9:24
Yeah, this I really rail against this whole lottery ticket mentality that so many filmmakers have where their distribution plan is to submit to Sundance and and hope that they win the lottery. And you as well as I know, you know winning Sundance does help but doesn't guarantee doesn't guarantee sales doesn't guarantee the number that they're looking for and so on. But it does look it does help getting into Sundance, obviously is a nice little thing. But that's such a rare lottery ticket thing where this is much more business oriented. This is more strategic and the way you approach filmmaking as you kind of should depending on You know what kind of film it is now and I've been to AFM multiple times now, you know, there are certain kinds of films that are sold that AFM rather than you know, if the arthouse film sold there is that black and white, French New Wave film that was shot on our DSLR

Jonathan Wolf 10:14
Absolutely. And it Okay, are those films are sold, mostly a lot of them come out of France, okay. You know, they call the American Film market, but there's still films from about 30 or 40 countries, their screen and sold at the market. And there seems to be more art films as we would describe them coming out of Europe than there are the US partially because they get funding. See, when we look at how an independent film is funded, there's equity if you're lucky, there's soft money if you're lucky, meaning tax tax, rebates and, and supports like that. There's pre sales, meaning you've sold the film before it's made and gone to a bank and borrowed against it. And there's different pieces you put you put together like this. There's also some government fundings and grants. And in Europe, there's more access to grants to the public funding. And this allows more creativity, frankly, and more risk taking on behalf of on, you know, the director. In the US, when you say we have no money, we have to rely on the presale market, we've got to sell that film before it's made. You've got to work within certain narrow genres, where the buyer isn't worried about the risk of execution, whether it's horror, whether it's erotic thriller, action adventure, if you come up and say I have a coming of age story of an American teenager, and I want you to buy the film before it's made. Most buyers will say there's just too much risk in the execution. But the similar kind of story could be made in France, or Germany or Spain, where there are public supports for that. And so, you know, the art house world is alive from a, from a funding standpoint, they're still having trouble, in some ways reaching the theatrical audience, and we just don't seem to see enough of those films in theaters. Now, you

Alex Ferrari 12:04
kind of hint in regards to some films at Sundance are sold before the festival even ever happens. Can you talk a little bit about that? Because I think I know what you mean. But I don't know that the audience does.

Jonathan Wolf 12:15
Well, here, the lottery ticket is actually being accepted to Sundance, because every distributor wants to see every film that's going into Sundance before Sundance, when you hear about a deal being done at Sundance, I promise you with all the lawyers involved in the complexities of cutting deals, they didn't do it at two o'clock in the morning, they celebrated a deal that was already done. After the screening, they went to dinner and said we have a deal. Not so what happens is the distribution companies frantically want to know what films are in Sundance and the producers along with their PR team or wherever it's assisting them. As soon as they get that Sundance submission, acceptance. They've contacted every distributor, they know this is going to be in Sundance, do you want to see it? Nobody says no to that kind of screening. And it's pretty easy set up a couple screenings in a mid morning, you know, in LA and and everybody's seen it. So those deals are cut way in advance. Now, some may wait to the end we were going to paper but we want to see the audience reaction but really for the most part, those are gone. And the end that kind of myth was kind of started in the early 90s. In the the Miramax we won't use his name, but then the Miramax days, where you know, Steven Soderbergh literally showed in 89, sex lies and videotape and deals were made by you know, at a coffee table at in Park City. And that's the thing where the myths came from. Correct. You know, and I don't know in any specific film, whether the deal was after the screening or the deal was three weeks before, but that kind of excitement about, you know, the champagne flowing at five o'clock in the morning, and everybody thrilled and it's like the white pearly staircase came down from the clouds. It's great. But then when we look at film markets, like the AFM and same thing of canon Berlin, we have dozens and dozens of producers with with packages ready to go part of the financing. They need to sell certain countries to to rap out to get the rest of the dough to make the film. And they don't know if they have a green light coming into the FMX. And they have one coming out. And they're down at the bar at the end of the market celebrating not that they got into a festival, but they lock their funding. And there are dozens of films that come into the AFM without funding completed that walk out with it. And so each of these events is different festivals very different from markets. And I'm just sort of highlighting one of those differences.

Alex Ferrari 14:41
Now, can you explain to people how films are actually sold at the AFM? Like what is the process for people who are unfamiliar with the process as best you can?

Jonathan Wolf 14:49
Yeah, it's about as complicated as writing a screenplay. There really if we can break it into two pieces, there are films that haven't started shooting what I mentioned before is because Pre sales, where the sales company, along with the producer have got a viable enough package that they're ready to present it to buyers from around the world. Now primarily the top 10 or 12 companies, countries, the largest UK, France, Germany, Australia, Japan, Korea, they're ready to present it. Now. When they're ready to present, it means they've got a director, they've got the cast. Clearly the screenplay is done, because the finished screenplay becomes part of the contract that you're guaranteeing delivery of that screenplay with only minor minor adjustments. And there may be other attributes to the package, possibly some funding, it's very difficult today to get 100% of your funding from pre sales. But they've got enough of the package, that they're ready to bring it to the market to pre sell. And they're pre selling for a variety of reasons, sometimes, because they need the financing. Sometimes, because the investors want marketplace pre acceptance. If they take it to the market, and everybody goes thumbs down, the equity investor may say it didn't work, let's all walk away and cut our losses. So I want to see a certain number of countries sold to not only mitigate risk, but also to know that the marketplace actually wants that particular film. And so that's one set of deals that happen. Then the other side is on finished films, where they were able to make the film before selling it, or maybe they only sold a handful of countries to wrap up the financing. And then they're bringing the finished film to the market to show it to the territorial buyers. And and so it's it's constant pitching, it's constant selling those sales agents. I may have said this to you once before one of our discussions, those sales companies are the best pitchers in the world. If you can imagine every 20 minutes you have a new meeting to pitch one of three or four or five films you're representing to someone who hasn't seen the film and it's possibly hasn't even been made. And that's where you make your living is pitching unmade films. And when we hear about a producer, who hopes every two or three years to pitch a film and get it made, and then we talked about the sales agent that's pitching three or four films at a time, nonstop every day, and that's what they do. They are the best in the world.

Alex Ferrari 17:15
And when I remember so vividly of my first time at AFM, I'll never forget this movie. I've not seen it, but I never forgot it because it was so perfect. Was Steven Seagal versus mike tyson? And it was just, it was just a big poster of it. And I'm not even sure if the movie was finished yet. It might have been a pre sale situation, I don't know. But I saw that I was like, this is this is amazing.

Jonathan Wolf 17:40
The first time I went to Cannes and sorry, this dates me a little bit. But very early in my career, I saw a big sign on the Carlton terrace. And all it was was two characters, a T and a two. It just was T two 919 90 or 91 and 91. Yes, I'm like that. And that's all it was. And and Carol Coe was pre selling Terminator two. And that's all they did was just T two. And they sat under the sign and took orders. Sometimes that happens.

Alex Ferrari 18:14
Yeah, yeah. And now But that said, What is the health of pre sales nowadays because it isn't like the olden days, where you could walk in and you could arguably fund your almost your entire film with pre sales is pre sales as predominant as it is it was years ago,

Jonathan Wolf 18:30
I began with sort of a two part answer. Budgets are bifurcated budgets are either getting bigger or smaller. 10 years ago, you could have made a $3 million horror film gone straight to blu ray, and eventually gotten your dough out of it. Now if you make that film for more than a million, you're you're in trouble. On the flip side. I don't know if monster could be made today. That you really need to have bigger budgets and then bigger profile to get out there and reach a broad audience. So budgets are getting bigger and smaller. On the bigger budget side. presale is a very, very important component of getting the film made. Absolutely. In almost every case.

Alex Ferrari 19:10
When you say bigger budget, can you kind of give you a range,

Jonathan Wolf 19:12
I would say in English language 15 to 20 million and up. It starts when you're producing and I cannot English language is different because the business models from Argentina to France are very, very different in terms of both their cost structure and guaranteed distribution in country. But if we're talking about American or British films gets very difficult to produce between two or 3,000,010 to 12 million, do you because as soon as you cross a certain number, you've you've got to go out theatrically. Unless you're doing this, let's say as a project for Netflix, where they have pre bought the film and essentially to Netflix production. We can talk about the the the platform separately but if we look at the at the markets, it's not easy to Pre sell a $300,000 film, the buyer can look at that and simply say, there are lots of them coming forward. I'm not risking my company by waiting for the film to be done. When you're a theatrical distributor, and you come to the AFM and there's six or seven or 830 million dollar films for sale and you walk home with none, you might have empty slots in your distribution Schedule A year later. So you need certain films, and you need to take the risk of acquiring them early. When you look at a $300,000 film, you're it's almost exclusively for online platforms, you know, as, as a distributor, you'll have enough content, so you prefer not to risk or go through the hassle of the pre buy, you'll wait for the films to be done, see what they look like, and then buy what you want.

Alex Ferrari 20:47
So this year, I think you just said off air that we you starting a new kind of program allowing filmmakers to screen their films directly at the AFM. Is that correct?

Jonathan Wolf 20:58
Yes, you know, canon has done this for a while we've somewhat resisted partially because of limited screening time, partially because we didn't want to mislead the producer. The biggest mistake a producer can make is saying I'm going to come to the AFM screen my film, and then sell it myself to territorial buyers. It's like putting a sign from your house, it says for sale by owner, it's almost always a disaster. Producers don't know how to affect the full delivery, they don't know where the values are. sales agents truly do add value. And they don't quite get the urgency of you can't sell China this year. And then next year, sell Argentina, you've got to get the world sold very quickly. piracy and just global media awareness diminishes the value of film too quickly once it gets released. And so we were I was concerned that producers would come in and try and do this themselves. And what we've seen over the last five to 10 years is fortunately a greater sophistication and those who are making films and a greater understanding of where they fall in, in the in the in the food chain, if you will, it used to be a producer would come to me and say so let me understand this, all the buyers have offices, right, because they simply have a script and they look at any production companies a buyer. But of course the terms in our industry is a buyer is someone is a territorial distributor, coming to the FM to acquire packages. We see the producers more sophisticated now and and are slowly we've opened the gate if you will, to allow them to screen. But the purpose of their screening is to reach the sales companies is to screen later in the market. When the 300 or so sales companies their business activity slows down a little bit, they can send someone to a screening. Now sometimes it's for fun, frankly, it's cast and crew and they just want to be there. You know, half of the screenings in camp at the cannon market are just producers saying I screened in camp. And they don't mind spending $1,000 to see I've got a canned screening, the AFM doesn't have the same brand. Because when you say candy don't necessarily differentiate between market and festival. And you're talking anyways, the market and festival clearly know how to differentiate, but others may. So we've opened this up, I think we'll have 15 or 20 films, screening. And you know, we'll we'll sort of take the temperature of the producers afterwards to see how it how it worked for them to make sure they got the audience or the return on their screening investment that that they wanted. But we did open up a few years ago to a screening that they have ever expensive. They're about 15 $100 for a single screening at a time when between 20 and 28. Other films will be screening at the same time. We've got 29 Cinema auditoriums, we don't quite fill them all, every two hours, there's a lot of competition. And the work that the producer would have is getting people into that room who are valuable prospects for them. But what we've been doing for a number of years, four or five years is we have AFM on demand, which is an online platform for those who have come to the market to see film both before and after the market. And we've allowed producers to screen on demand for a number of years and more 60 or 70 took advantage of that, I think last year, that's only $400. And the advantage of that is it runs for about six months. You can define who sees your film, let's say you only want sales companies or something like that. And it's it's really a prank, frankly, a better value unless you've got a big expensive film. If you've got a $300,000 film, it's headed straight to a platform. You shouldn't spend, you know so much on a theatrical screen at DFM, you should put it on demand and tell the sales companies the week after the market, they can come see it and your work the market by just going around to the offices, letting everybody know it's there and following up afterwards encouraging them to go online. We just find it to be a better sales tool for most producers.

Alex Ferrari 24:55
Now I've read also somewhere that I think is on your website might be mistaken that filmmakers could kind of piggyback on other exhibitors, like you know, if you if I, if I call an exhibitor there and go, Hey, can I screen through your exhibition pass? That that is it that is a practice that is done if you feel like it, because what is the actual process to get your film screened? If you're if I'm gonna have a I have my I have a film. What do I do?

Jonathan Wolf 25:21
Well, if if, if it was last year or the years before, this is what some producers did, because only the sales companies, the exhibitors, the show could screen this year, because anybody with a badge to the market can screen their film, they actually don't matter the price, the cost is the same. They don't go through the exhibitors, and the exhibitor really doesn't want the hassle unless they're actually selling the film. And so they just simply go online, they get a credential and it says screen your film, you click here and just follow the instructions. And there's a process. And we don't make it difficult because we you know, we want people to do it if it's right for them.

Alex Ferrari 25:58
Okay. All right. Great. So then, so you would advise, I mean, is it a specific kind of genre you're looking at for those kinds of films? I mean, I mean, obviously, historically, and please correct me um, and you know, much better than I do, but action adventure, erotic thrillers, thrillers in general, and whore. And then a family films, like anything that has a dog saving Christmas will do very well. And family films, those are kind of the big giant pillars. And then there's, of course, faith based and other other genres as well.

Jonathan Wolf 26:28
Well, let me say that they were okay. The industry is moving quickly. If we had this conversation six or seven years ago, I'd say that that is the center of the market, then you have larger emila. More than half of the Academy Award winners for best picture in the last 40 years have been licensed or screened at the AFM. So the AFM is about everything from shark, NATO and Toxic Avenger, you know, to greenbook you know, it's just everything in between. But that middle tranche that you mentioned, really defined what worked in the presale marketplace in the middle budget, where the buyer who comes in is usually taking on a pre buy two risks. One did they guess, right for what their audience wants, like, like buying sweaters for for, you know, a department store? Did I pick the right color order too many. But the other risk they're taking is that the filmmakers will actually make the film they promised, Was it good? Was the acting right, the director do what they need to do. They're taking two risks. And as I mentioned before, there's more risk of execution on serious dramas or talky comedies, and less risk of execution in specific genres like action adventure and horror and thriller. And so producers who don't have a lot of equity, are having problems raising money elsewhere and needed to rely on the presale marketplace for most of their funding. We're forced just by the nature of the marketplace to stick with genres that they could pre sell. If they could pre sell Brokeback Mountain, if they could pre sell greenback, a Green Book, you know, we'd have a lot more of those kinds of films. But they're just too risky. The buyer wants to see the film first. So the genres you've mentioned, are have slowly slowly melting a bit or the budgets are getting so small that that that the presale isn't isn't a piece of that. Now, if you look at Expendables, I don't know what what, which one obvious on is Expendables 44, or something, but but this is clearly you just say it's Expendables, here's the cast, and I'll show you the script. When the film is done. And it's bought, you don't care about the execution, you know, it's got a wide berth, and they're going to execute within that. And within a level the audience will accept. Come up with a talky drama, it's different. And so there's still some of that, but the budgets have either gone up, or they've gone down. And have you seen, you know,

Alex Ferrari 29:05
I'm going to be doing a panel at the AFM about micro budget. And, you know, do you have you seen the, I mean, as you were saying, they either have gotten really much more expensive or have come down, down, down. And I work with independent filmmakers on a daily basis. And I've seen budgets from $3,000 for a full feature that gets sold to streaming services into when I meet the filmmaker. You can meet him right here. I made a movie. I made my first feature for $5,000. I had I had a beautiful cast of friends here in LA who were all big, it was a dramedy, and we got a licensing deal with Hulu as well as sold it self distributed as well. So it's doable, but yes, but so that you've seen those budgets, but then I see the budgets of three, four or 500,000 as well. So how have you seen the budgets really change? And what is that sweet spot for certain movies to actually have success at the AFM

Jonathan Wolf 30:00
I'm only going to give you a partial answer to this frontlines really no. Yeah, the fact is, first and foremost, if the film isn't going to resonate with its target audience, it doesn't matter how cheaply you made it. It's all about the audience.

Alex Ferrari 30:17
We'll be right back after a word from our sponsor. And now back to the show.

Jonathan Wolf 30:28
And, and if you're looking at the film business, with the emphasis on the word business, the first thing you do is is face your audience. You know, I mentioned before buying sweaters for a department store, if if Bloomingdale's the buyer just happens to like green, and puts a whole bunch of green sweaters on there, and nobody else likes it. It didn't work. Those that succeed are facing the audience understanding they want what they want. And, and I don't know specifically, which genres which budgets, you know how things connect. And this is really where the filmmaker has much more skill than I do, where the sales company, and in keeping their ear to the ground and understanding where the values are. Just what the marketplace is, is responding to it. It's moving much more quickly now than it might have 10 or 15 years ago.

Alex Ferrari 31:19
Yeah, I mean, that's the thing. I always tell people as well as filmmakers, like what was what was true, like, last month, is no longer true today. I mean, we have and we're going to talk about streaming services and more. But now coming up in the new year, we've got four or five monster streaming services being brought out Disney plus and NBC Universal all these things. How is that going to change the marketplace? How is you know, it's everything is changing so rapidly. And I can imagine someone like you who's been working with the AFM. I mean, I remember the times where the if you know, where movies, you know, even just an industry was much slower, it took time for things to change. Now, it's, it's changing almost on a monthly standpoint, how, you know, how do you how have you seen the industry change? How is it affecting and how is it affecting the AFM?

Jonathan Wolf 32:03
Well, okay, well, we have about three or four hours for for this one. Of course, the streaming services are having are creating a tectonic shift in the industry. And everybody knows this, what I'm saying is a new, but maybe I can add some interesting perspective. They're doing a few things. First of all, this is a Renaissance period. For actors, for writers, for everybody who works in production from cinematographers to set designers. There, there are more hours of film both narrative and and not being made today than than ever before. Everybody is working, that makes it an exciting time. It's also somewhat of a bubble. Many of these streaming services are losing money, all of them are talking. I read today that that that Disney is going to be spending 15 million an episode on this show 10 million an episode on that show. In the days of network television, when there were only three networks, even at today's dollars, 2 million an episode would have been a lot to reach 30 million people a night. Now they're spending huge amounts of money. And and I'll talk for a minute about why that can actually work for them. But it's still a bit of a bubble, because they're all going to be losing money for a while. And eventually, some some common sense will come in either shareholder driven or marketplace, and production will pull back a bit. But in the meantime, it's creating a renaissance environment for everyone, except producers. And here's why. If you are a Motion Picture producer, and your goal is to build a library, and, you know, actors, writers, directors, they get residuals, their film plays forever, they've got a participation in that, you know, for a long period of time to cover the lean years or the lean months, producers don't. When you go to a platform, like Netflix, they write a check, they buy you out, you see nothing It has worked for hire for you beyond that. Now Netflix will say due to their credit, we're going to pay that producer more than the average film might earn not blockbuster, but not losing money, or, you know, as well, we're going to assume it does sort of Okay, and that's what we're they're gonna get paid. And it's gonna be better than most, but they have no back end. They have no participation. Now, they're just told Good luck, go find something else. We're not providing development funding. We're not you know, paying your rent for your home while you're trying to find the next next package, where a producer who can build a company through a library really has a way to help fund a future film. And the big question mark for me is where are those creators going to find those new exciting ideas? the creative process works best in small pockets. This is why even the studios when they're producing, you know 1012 pictures a year or one a month is about all you can do without creating another studio and another set of decisions. makers. It's why the music labels have offices all around the world, not because the music is different in Nashville versus Seattle, but you can only just put out, there's only so much creativity that can come out of one group. And what's happening now is they're slowly strangling those who fund and take the risk the entrepreneurs, it is the it is it is slowly driving the entrepreneurs to extinction. Because these are the people who take risks. And this is the part it's not gonna happen in the near term. A lot of those entrepreneurs are, are happy getting their fees from Netflix. But I know multiple people who've had series of Netflix, for example, and they've done the first year. And Netflix says the only way we go forward with a second year is if we own it, we're buying you out, you have no participation, or there's no second year. It's all about owning the copyright. We've seen that some of the I think Disney is slowly moving towards this not having to deal with a profit participation definition, but rewarding based on certain milestones. This is worrisome for the producer. And I'm not trying to wave a big red flag and maybe I'll be surprised in the marketplace, or the creative producers will find a different model that keeps them healthy. But that's what worries me.

Alex Ferrari 36:21
The the other things The interesting thing about Netflix because obviously Netflix was the the the catalyst of all this, they they're the first streaming service, they're the ones that really kind of changed. Basically the way business is done in Hollywood at this point. I always I always say that the difference between them and like someone like Disney plus, is that Disney plus, or Disney is a very diversified company. Netflix is not their entire multiple, the only revenue stream that they have the blue jority of it other than a few t shirts for Stranger Things that they might sell is subscriptions. So Disney can take that hit and can lose money on Disney plus for years. Because they have so many other ancillary product lines and things and they'll make more money on the T shirts off of those shows that $50 million an episode show than they will off the show itself. So they have a different business model. I agree with you, I think there is a bubble I think what sooner or later, there's going to be one of these giants. That's just going to it's just gonna pop it's just gonna fall.

Jonathan Wolf 37:23
Well, let me let me add a perspective to this. First of all, Disney has said by 2020 they're going to lose about $4 billion in revenue that they would have otherwise collected had they not started Disney plus. So they they have to move quickly. And they have to scale quickly and they likely will. They've got the only brand. Disney is a brand Warner Brothers is not a brand. Nobody says I can't wait to go see a warner brothers film. Right Pixar film a Disney film, a Lucasfilm their management. Yes, Marvel did manage, they understand that brands actually sell just like paying Tom Cruise a big number to be on a film because because he sells he can drive tickets. Those brands sell the other brands you don't rush off to a paramount film. But there's something that Netflix understands that magazine publishers have understood for almost a century about the subscription model. And that is with the magazines. The average consumer would retain their subscription, if there were two sections in the publication that they wanted to get every week or every month, however, often came out, not for the whole book. But for two sections. If there are two parts of that that you want to see, usually the subscription was low enough that you would always retain it because you didn't want to do that. Netflix has followed that exact model, which is they want to have just enough of what you want, what I want and what every single person around the world wants to say yes, for my $10 a month, I don't want to move, Li Li lose that slice. Adam Sandler gets a port for a picture deal. And a lot of people in Hollywood roll their eyes and laugh. Netflix knows exactly what they're doing. There's an audience for everything and their goal. They're not going to buy every dock. But they're going to buy enough dock that if docks are important to you, you will never give up your Netflix subscription. And so it doesn't matter that Netflix doesn't have the Disney brand because they are doing something different. Disney is saying here's ESPN, here's Lucas, here's here's Marvel, here's our various pieces of content. And we think that most of the public wants at least one of them. Netflix is much broader, in the sense of Disney pluses and going out with 100 docks every year. Netflix would be and so they're taking the big book 300 page magazine, publishers approach which is we're gonna have just enough of everything. Now. They also know That, and that it's what's new that keeps people engaged as well. Very few of their series go more than two years, partially partially because the costs go up. Partially because they know they don't lose subscribers when they cancel series, one day at a time, you know,

Alex Ferrari 40:20
Great show, I love that show.

Jonathan Wolf 40:22
Outcry, oh, great didn't matter two years, they're done. You know, they'll go on and on. But if they have the next new thing, it gives them something to market to drive new subscriptions, their churn rate is low. And it's gonna be interesting when we want, you know, a company owned by at&t, that used to in its cell phones, used to have like a one and a half percent churn per per month, an 18 to 20% churn per year. If you had that at HBO, if you had that at Netflix, they'd be doomed. And so it's going to be interesting to see how those those cultures work with each other. But I wouldn't sell Netflix short. Now, I don't mean, you should go buy the stock, because I have no clue where values are on something like that. But those who say Netflix are is losing all of its content, and nobody will want them anymore. They're missing the subscription model. And really what is at the core of it that Netflix does understand.

Alex Ferrari 41:17
Now, I mean, obviously I remember last year when I was walking the halls, all I kept hearing was this this term Ott Ott, Ott, Ott streaming, it's everywhere. It is just it's just rampid. It's like a virus that has infiltrated the AFM. Everyone's talking about it. But yet a lot of people aren't figuring out like you were saying, how to make money with it. Because DVDs was like you, like you said you made a $3 million horror movie, you threw it up on DVD and blu ray, you made your money back, it was just the market. Streaming is not like that the profit margins aren't as as big there had.

Jonathan Wolf 41:52
And there isn't the cost. Sorry, go ahead. No, no, there isn't the competition. So if you were selling a blu ray, and you were going, looking at I was an action adventure, and you were looking at Japan, there might be six 810 15 distributors, who you could show it to what's happened. And this is what I think a lot of the creative industry misses is the growth of the platforms has really been about consolidation, and consolidation of channels to the consumer and consolidation of potential buyers. Now, who do you go to when when the blu ray player, blu ray excusing, buyers have gone and you look at a streaming platform, and a number one streaming platform is Netflix and there are two others and that's it. In a country, suddenly, you don't have the the ability to create an auction for your film, suddenly three companies are interested, you're just out of luck. Now maybe you go to an A VOD platform, hope you can, you know, get a little bit of dough as their ads playing against against your film. But the scary part for the independent filmmaker is the consolidation that's happening. And while people would look at the AFM 10 years ago, 15 years ago and say, Who are all these people, they're the frankly the ones that were funding the 1000s of independent films that were made, because they were they knew how to find their audience and what I'm hoping for, and we're doing a session at the AFM called the rise of a VOD, what we're hoping for is that they're actually become what I'll loosely call independent platforms. When we push aside Netflix and Disney and peacock and some of the others who is out there saying we don't need 50 million subscribers, we need 5 million. And we're going to pick up the films that others don't want. And we have a marketplace. And I think ultimately, what we'll start to see is a slow growth of independent platforms. And what I'm most hoping for is that some technology provider, maybe it's Apple, maybe it's someone else comes up with the over the top app, which allows you to say, Here are my subscription subscriptions that I have got Disney plus I have Netflix, whatever it is, and it organizes everything for you in one place. The consumer needs simplicity, we have so many examples of that. You know, we we all listen to music digitally. But a CD has much better quality. We'd all prefer to stream films. But a blu ray has much better quality. We actually prefer convenience, and we're willing to give up some things for that to be answered. It's somewhere there needs to be that that app on your on your television that allows you to access everything you have rights to in one one spot. The reason I mentioned this is then that small app that small distributor has a place there can that can be found along with everything else.

Alex Ferrari 44:54
It was just funny you say that the small niche kind of over the top streaming series services are going to start popping up. I myself have a streaming service that's dedicated to filmmakers and screenwriters, and it shows movies about screenwriting and filmmaking, it shows you no other kind of content that's aimed at that demographic. And it's a full blown streaming, you know, Apple TV, everything. And I keep saying the same thing is like, you know, one of the main core things I teach is to filmmakers is to understand your audience and to niche down not to go broad, they can't compete with a studio budget, they can't compete with 20, you know, $20 million in PNA. But they can make I always say, make the vegan chef movie, you know, make that movie that is a romantic comedy about a vegan chef who meets a meat eater at a barbecue competition. And you make that movie for $150,000. You know, you put a couple stars in it or your company, but you can sell that that movie to that niche audience, would you agree that not only is it the niching down of your projects, a beneficial thing at selling at the AFM, but also for these companies in these streaming services like cozy flexes, for example, or what's that there's a faith based one as well, something else flicks, you know that they're, they're literally like, I don't need to go after everybody. I'm just gonna go after my niche audience.

Jonathan Wolf 46:11
And that's important. If you compare it to the real estate industry, some people big build big mansions in Beverly Hills, and some build, you know, apartments and one bedroom condos. And but they when they start production, they start building, they understand the marketplace, they know how to reach the marketplace, before they start. Too often we find with the creative producer, they make what's in their head, and then afterwards say now what do I do with it?

Alex Ferrari 46:37
You mean most of you mean most filmmakers, basically what you're saying.

Jonathan Wolf 46:41
And this is one of the things that differentiates the studios, the studios are distribution companies, they only produce so they can have something to distribute, sort of like the oil companies, they're all refiners if you said to Exxon Mobil that that will give you a steady supply of crude from now till eternity, you don't have to explore, they'd be cheering great, we're just going to keep filling our refineries. The only reason they do that is so they can continue to refine and retail. If you said to Disney, we're just gonna feed you, you know, a Star Wars every month forever, they'd shut down production, because it's all about, it's all about the distribution. And so, the independent and I'm exaggerating, of course, but but the end of the independent producer frequently is focused on the production side here, there are two kinds for me. And there two kinds of companies, some companies, there are distributors there, excuse me, there are companies that produce so they can continue to distribute, and their companies that distribute so they can continue to produce. And those that distribute only so that they can continue to produce are usually following the the the owner the principal's vision of production, and in very few cases, do they succeed long term. Most production companies just don't have a long lifespan like the studios. And it's not because they aren't big. It's because our ultimate mission was still to produce.

Alex Ferrari 48:04
Now, do you have any tips on how to work the AFM for a filmmaker? If you if you're trying to either do a pre sale or sell a project? What do you have to walk in? How do you walk in or if you have a finished film what you should do as far as just literally working to work in the AFM.

Jonathan Wolf 48:20
The first thing to do is to start ahead the worst experiences are someone to pick up the credential, walk in the door and say, Okay, now what do I do? There is no follow the dots there is no roadmap. It isn't curated for you. This is a jungle. And so you have to be prepared for it. You have to understand what your mission is. And there are a few I even start at the producer or writer who doesn't have a script has nothing. Their reason for walking the market. And I'm not suggesting that all should do this. But I've met many who have. The reason for walking the market is to know what's working in the marketplace. To be able to go door to door, you can walk in the office of Lionsgate then you walk in the office of every single company that's there, the door is open, they may or may not have time for you at that moment. But you can absolutely see what's coming. You can see what budgets they were working. And it's so refreshing when someone walks into one of these companies, instead of pitching turns around and says, What are you working on? What budget cut ranges you in? What language what genre? What works? What after, you know, just asking questions, it's a wealth of information. These companies all face the marketplace. The first and foremost is to make sure that any minute you have to have me spent learning and frequently going door to door and understanding what companies do. Because they're you know, ultimately you want to make a film that sells not a film that you show to family and friends, and then pull it out once a year to show it again. And so then the next group I look at sort of the process is a producer that has a package. Writers with scripts have a challenge. They can find out who's interested in a weapon. Nobody's going to read a script in a market. So pitching a script at a market just going door to door and saying, buy my script, you know, doesn't work for a producer with that script, who has some elements to it may have some equity may have somebody attached, you know, may know where they're going to shoot with some soft money coming for they had even even just the embryo of a package beyond a script, they have an opportunity to create interest because the companies there are constantly looking for new films. And they have to do their homework in advance, though, you know, one of the things all salesmen know is that they want to qualify their prospect, the last thing we want to do is waste their time pitching somebody who isn't qualified. You know, you're pitching a French company, an English language film, and they only make French language films. you're pitching an art film to a company that only handles you know, certain genres. The key is to do the homework in advance and actually know who you want to meet with no lots of resources on our site. Every every sales company has a page on our companion website, the film catalog, which has their profile shows all the films they've handled, and shows where all their ex who all their executives are. So you know who to write to, to set up a meeting. And the other important thing that again, the professional salesman knows is the purpose of every contact, whether that contact is an email, a phone call, or a meeting, is to get to the next contact, just get to the next step and baby steps, the purpose of the email is maybe to get a phone call to pobres, the phone call is just to get a 10 minute meeting during a busy market, the purpose of the tenant meeting is then to get the follow up meeting or to have them read the script. It's all done on little steps. And and and those who trying to overreach usually just get the door shut because people don't have time for the commitment they're asking for. And so it's asking for very little, and being happy with that very little as you move to the next step. So those with packages or loose packages, planning ahead, contacting the companies trying to set up meetings, finding out who's head of acquisitions, those with finish films, the goal is to get the film seen. Now one way could be a screening of the market another way could be having it on FM online. In those cases, you know, we we frequently recommend that someone put together a three to five minute reel. And I say that it's not a consumer edited trailer. As a filmmaker, you're not telling the distributor how he or she should market to the consumer, you're not showing how you would sell the movie. It's taking, I don't know selected scenes, half a dozen scenes that would show the best of the film, you're already either sending a script in the know the story or the synopsis, you don't have to show beginning, middle and act. Here are five great scenes show the skill of the actor, the skill of the director, the production values, whatever shows the film in its best light, you put it on a password protected site, and you basically say, here's here's a synopsis, here's some selected scenes, please take a look for three minutes, click here, love to meet with you at the market. It's a finished film, suddenly finished film has less risk for the person you're pitching. Because you're not asking for dough. You're asking for their time. You're asking them simply to look at the film and see if it's a good fit for them. So the pitch is is is very, very different.

Alex Ferrari 53:19
And you wouldn't suggest a screenwriter walking in with a screenplay going Hey guys, I've got a movie. Can you fund me?

Jonathan Wolf 53:25
No. But there are more than 1000 producers at the AFM. Most of them actually aren't in offices. They're doing the things that we've just talked about. So if you're a writer, and just from a networking standpoint, in the restaurants, at the receptions in the hallways, wherever it is in the filmmakers lounge, just talking to people, what do you do? Well, I'm a producer, I, you know, mostly stick with horror. I'm a horror writer and I just finished three scripts, you know, that kind of connection, somebody that that doesn't have a big enough shingle that they would have known to pitch them or write to them and advanced finding partners. This is a collaborative art form. If you're if you played in the grunge world, you know, a decade half ago, you were in Seattle, you had to go there, you know if if you know you have to go if you're playing country music, you need to be in Nashville. If you're an independent film, and you want to connect and and find collaborators, you need to be at major events, whether it's here, it could be at Sundance, you know it could be at other events, but you have to get out and connect.

Alex Ferrari 54:36
And what any other final do's and don'ts that you would recommend for the AFM intercurrent because I know before you could, I know it's been slowly kind of being closed off before you could walk the pool. Now the coolest clothes off before you should be able to walk the lobby without a pass now that's closed up. So for people who are not aware what are the do's and don'ts now that you can recommend for people coming to the first time AFM

Jonathan Wolf 55:00
Well, those haven't been there that the big FM held is held in the low Santa Monica Beach Hotel. It's a 350 room hotel, we close the hotel for a week and a half. You can't walk in the hotels, you've said until after sundown, usually around 630. Now you can't walk in the hotel without a badge. But it's no different than going to any other market, whether it's the LA and Cannes or the Martin Gropius Valley in Berlin can't walk in the building without a badge we used to keep the lobby open. But as the markets grown, we've found people who paid dearly to travel from around the world, flown for 10 hours gone through the indignities of Li x. And then they're standing in the lobby, because you know, a handful of actors came over with a bottle of water and an Uber and are occupying all the couches. And it just my empathy was for the person who traveled a great expense who came to the market, we have a business mission, rather than locals who are already here in Hollywood, they're already here, they can already go knocking on the door, they can meet people everywhere. My my empathy was for those who traveled and so we just decided we needed to restrict access to the hotel to those who have a credential. And so if you're coming to the market, first and foremost, do your homework, you know, decide who it is when to meet with this is an appointment show half the connections are made by appointments. For those that are in the offices. Don't pitch somebody without qualifying them. My best example is we ever walked onto a car dealers a lot the salesman comes out, you know, under the lot and starts right out you have the perfect car for you. It's red, it's a four door. It's a it's a stick shift, it gets low mileage, it's absolutely the best car for you, without ever asking who you are, what you're interested in, when's your budget? When do you tend to buy? That's the difference between someone who doesn't pitch for a living and someone who does you qualify? your prospect is the most valuable thing you have at the FM is your time. Invariably, I hear from people who are really angry because they pitch someone for five minutes, then ask that person, what do you do? And I said, I'm the intern, I'm here for a week taking messages and booking meetings. And they felt it was the interns responsibility to interrupt their pitch, right and say you shouldn't be pitching me. the blame game. Your pit, you're a professional salesman, you know, sales is the highest paid profession in the world, more than more than lawyers and doctors. But it's it's business to business sales that most of us never experienced and definitely don't know how to do. And this is what selling film is. It's totally different than selling sweaters or Bloomingdale's. And but we think of it many people think of when they're pitching a film, I'm pitching it like a sweater. This fits on you. It looks great on you. Here's the big smile. Don't you want it? Yeah. The business the business salesperson is explaining to the buyer how they will make money on the film. Not how good the film is. I was once walking with a producer whose name I guess I won't say in case he gets pissed off. We're walking in Cannes, it was an hour years ago, I said, What are you working on now and he said I just another piece of shit was on GLAAD. You knew john Claude Van Damme. He didn't care who was going to make money. The the distributors, the production companies that what they're most interested in is how this is going to be a profitable experience for them. First and foremost, the film being good is secondary.

Alex Ferrari 58:23
It's it's business. It is it's about the business side of the business that you most filmmakers think about the show only. And never think about the business.

Jonathan Wolf 58:33
If I can use one analogy, if you're if you're a painter, you and your do this for a living professional, you visit art galleries, you find out what are people buying? What do they like? I could paint anything. But I'd rather paint something that people actually want to buy. If I don't, it's a hobby. And what you have to separate is, is this my hobby and my passion? Or is this what I'm doing for business? If I'm successful at it at a business standpoint, I'm going to have lots of time and resources for my hobby. But if I only pursue my hobby, ultimately I'm going to be having to find a different shade day job. And professional painters know this filmmakers need to follow the same the same path.

Alex Ferrari 59:18
Now where can people go to sign up for badge or any any information about the FMX?

Jonathan Wolf 59:23
Sure American film market.com it's easy enough to read the information is there. We have a page, how to work the AFM if you just Google, how to work, the AFM that that page will pop up it'll have a lot of the things that that I've just talked about.

Alex Ferrari 59:38
Very good. Jonathan, thank you so much for being on the show again and dropping knowledge by dropping knowledge bombs on our on our tribe today. So I appreciate it and I'll definitely see you and I'll definitely see you at the AFM.

Jonathan Wolf 59:49
Looking forward to it. Thanks for moderating that session. I'm looking forward to it.

Alex Ferrari 59:53
I want to thank Jonathan for coming on the show and dropping those knowledge bombs on the tribe today. If you haven't been to the AFM and You are in California or you can get here. It is worth your time going guys, it is an education, to say the least. If you want to get links to anything we talked about in this episode, including Jonathan's prior interview, head over to indiefilmhustle.com/361 for the show notes. And before we go guys, I want to ask everybody for a favor. If you have read shooting for the mob, and you enjoyed shooting for the mob, please take five minutes, three minutes out of your day, go to Amazon and leave a review for the book. It really really helps me out a lot It helps out with the ranking of the book getting more people to read that book. It really does help a lot so please head over to shootingforthemob.com and click on Amazon and you'll be able to go right there and leave a review so I truly appreciate it if you haven't read shooting for the mob oh my god what are you waiting for? It is an amazing book has 29 I think rating right now five star ratings already and it was already a Amazon best seller. You know guys don't hate the player hate the game. always gotta be hustling. You know it is. Thank you guys for listening. As always keep that also going. Keep that dream alive. I hope to see you at the AFM and I'll speak to you soon.



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IFH 198: The AFM Wrap Up (Indie Film Hustle Edition)

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I had the pleasure of attending this year’s AFM (The American Film Market). This was my first time actually walking the entire market. I met a ton of people, made great connections and really got the inside look at how films are sold internationally.

In this episode, I discuss the major takes away from AFM, what an indie distribution pipeline looks like, and why EVERY filmmaker in the world that ever wants to sell an indie film needs to attend. Enjoy!

Alex Ferrari 1:19
So today my indie film hustlers we are going to talk about AFM, the American Film Market, I had the pleasure of getting an all access pass to AFM and I walked this hallways I spoke to people had meetings, and I'm returning back with the booty, if you will, all the information that I found, and all the experience of what AFM is and how it can affect you guys as filmmakers, and what, what takeaways I got from it, and hopefully it will help you as well. And I want to thank all the tribe members who came up to me while I was walking around the halls and said hi and told me their stories. And it was just an absolute pleasure to meet more of the tribe and and find out what I could do more to help you guys along your journey. So big thank you and shout out to all of the tribe members I spoke to at AFM. Now what's the one main takeaway I got from AFM? You know, I've been to AFM before, but I never had a pass I was one of those guys, I was just hanging around the lobby hoping to, you know, either take some meetings, which I did but never really got into the meat of what AFM had to offer. And by finally getting a pass to go up into the rafters Allah Bruce Lee and Game of Death, I was able to go up level by level and really see how the machine works. Walking those halls and seeing company by company after company distributor after distributor film after film. I took one thing and I noticed just one big thing that at AFM. They do not care about your craft. They do not care about your personal film. They don't care about the art. They don't care about any of that. They care about a product. Can they sell this product? Your film is a product at AFM. There's no art, there's no celebration of the art, or how good the movie is. It's about what what genre is it? Who is in it. And those and what actors are they? And then can those actors sell territories? And what can I sell this movie for? That is all they care about. And it was in full effect because some of the movies take that to the nth degree when you have Steven Seagal versus Mike Tyson. Yes, that is a movie coming out. That movie is going to do gangbusters. You know that movie alone will probably make about 15 $20 million worldwide if not more purely because of the power and the concept of Mike Tyson versus Steven Seagal. It's insane. But that's what this business. That's what the business is at AFM. Sure, you'll see some indie movies like this is mag was there and we were selling through our distributor internationally there. And there are people looking for that kind of product, you know, romantic comedies or small Indies. There are there is a marketplace for that. But it is not what most of the distributors and most of the buyers are looking for. They're looking for genre. They're looking for action, some horror, but not a lot. I didn't see a lot of horror out there. This time. It was more family Action, Thriller, animation, though and documentary. Those are the ones that I saw everywhere. Those are the big things. big the big genres that were selling and selling well. Action, of course, is always going to sell well because it travels well. Not a lot of dialogue. Action is action no matter what country you're in. And that's why whores historically do so well. But there's just such a gluttony of horror films out there right now that the price has gone way, way down. If you can even get a distributed even buy it, or even try to sell it, there's just too many lets you have big stars and things like that on it. But it reaffirmed a lot being at AFM reaffirmed a lot of the things I already knew. But But seeing it in action is is so impressive. The one thing I'm going to say that everybody listening to this podcast do, if you are a filmmaker, and you hope to sell a movie one day, or make a movie and sell that movie one day, you need to go to AFM, you need to at least get a day pass and walk around, talk to people make some appointments with distributors and see how independent movies are sold. This is the real, you know in the trenches kind of buying and selling this is what makes the industry go round, not the Sundance deals you hear about not the lottery tickets of you know someone coming in and being a half a million million $2 million for movie, those are great. They're wonderful for press. But that is not the day in day out business of entertainment of of this of the film industry. It's this kind of marketplace. selling and buying films is where you need to be to see how it's really done. So many filmmakers will make their movie and have no idea of where they're going to sell it, how they're going to sell it, and even even how to even do it in the first place. It's mind boggling, but I'll be talking about that. And another episode coming up soon. Now I know a lot of you know that I've self distributed This is Meg through distribuir, where I got it on all the TV platform transactional plant via transactional video on demand platforms, as well as in Hulu and getting a distributed there. But I also have an international distributor, someone who's going to handle my international sales. That's something that self distribution is not as good at right now. Because they don't have the reach yet. Yes, sure, you could put it on iTunes or all around the world. Yes, you could put on an Amazon around the world. But that's not the same as selling it to different territories. That's where you're going to be making a bulk of your money selling it to those different territories. And the only place you're going to have access to this kind of stuff is at AFM. So just let me break it down really simply for everybody in the audience who doesn't have a basic understanding of how distribution and distributors work. If I have an independent film, I made this as mag for example. And I'm not just self distributing, and I'm just going to go to a distributor, you you sign a deal with the distributor, chances are you're probably not going to get any money up front. Those deals are rare nowadays. But it happens. But more than likely, you're not going to get any money up front. Unless you have big stars or something like that attached, or a lot of heat on your project. You go to a distributor and the distributor goes, Okay, we're going to take it on and want to put it in our category in our catalog. Usually, generally, you're going to do a five to seven year agreement means that they own the distribution rights for those year for that for those years, and you're going to get a certain percentage back generally 25% is you know what a distributors take is now there's going to be multiple different costs involved. Every time a distributor goes to a major market like AFM or Cannes or Berlin, they're going to charge the filmmaker per film. So in that's, that's from this case by case basis, depending on what distributor you go with, but there's going to be a cost involved with that. So make sure you cap make sure that distributor that distribution Do you have a cap on PNA advertising costs, you have to just cap the cost because if you sign a deal with no caps on cost, you will never see a dime. So let's say they get there. Once you get that the distributor gets their movie, they go to AFM. Let's say they go to AFM, they open up a booth there, which is basically a hotel room. And then once you're once they're in there, they're going to have to sell or they're going to make meetings with buyers, all throughout the AFM. And these buyers are going to come in make deals and like hey, I'm looking for comedies, I'm looking for romantic comedies, I'm looking for actions. And then the distributor will look in their catalogue of their movies that are up for sale right now in the current brand new stuff and they'll pitch it to them. They'll pitch it to them just like you know face to face. Like here's the trailer. Here's the movie. Sometimes deals are made on the spot rarely but on the spot sometimes. Generally what happens is everyone exchanges cards, everyone exchanges information. And then a few weeks later, they they follow up and then deals are made. So this is mega sold in China and Africa, South Africa. And we have other pending deals currently and a lot of those deals were waiting now I'll see what happens at AFM because AFM is more of a US kind of based market where a film like this is made will probably do better because there's a lot more us buyers hands because it's here in the US. And when we were a can, it's a lot more European buyers. So us movies do well but you know it's not as good as you could do here at AFM and then there's lots more that goes on after Your words, but that's the general idea of what happens to the lifecycle of a film once it gets into the distributors hands and the process at AFM and what they're doing. Another thing I learned and I wanted to pass on to you guys is you really should go to AFM to find out what your movie is worth. Because you might think it's worth something, that one number and the marketplace will tell you no, it's not worth that it's worth this. If anything, if you have a movie, a movie idea, a script, a package of some sort prior to shooting, and if you can make a go to AFM, take some meetings, talk to distributors and see, hey, you know, I'm thinking about doing this movie, and then packaging it this way. Is this really is this actually worth anything in the marketplace. Perfect example is I did a movie once with Eric Roberts in it. And the Director Producer, hired Eric Roberts, specifically not only for his talent, but because of his name and what he thought his name would bring in the international sales. Well, what he found out the Rude Awakening was that Eric Roberts that year had did like 20 movies, he had just non stop. So he diluted his value, and it was worthless to him. At this point, he literally had distributors saying I can't take your movie, as nice as it might be, because I have three other Eric Roberts movies, so I can't sell another one. And this happened again and again and again until he finally found someone, but it was much less than he thought he would get for the movie without question. So be aware of that. And these are the kinds of things you find out at AFM. You go there, you talk to people, you make connections, and you make connections to distributors, where when your movie is done, you have a list of distributors that you've already had a contact with a one way shape, or form. And then you can stay in contact while you're doing production stuff. Because get I trust me, distributors are looking for content. distributors are looking for films to distribute without them. They don't have a business. So they're very interested and very, you know, I mentioned it in passing to a few distributors about some of the stuff I'm doing in the future. And they were all very well what are you casting? Who's going to be in it? How are you doing this? They're very interested in what you're doing. So that is one another reason why heading over to AFM might be well worth your time. Another big thing at AFM that I think is super valuable for filmmakers is the conferences and the pitch fest. The pitch fest is legendary at this point where you actually see people pitching in front of a live studio audience where you can actually take notes at how they're pitching and take notes at their critiques and learn how to actually pitch a movie. There's also other conferences and panels where you listen to distribution experts, industry experts screenwriters, everybody is there trying to help you the next generation coming up? So the conferences alone is well worth the price of admission. And the last thing I think you should take away from AFM is contacts. You have no idea how many contacts I made, just in the two days that I happen to go. And I didn't have any meetings lined up really. I just kind of showed up and found a few people that I knew and one thing led to another night found this person in the hall and, and all of a sudden my day was gone. And I was getting cards and meeting people. It's amazing. I know a couple of indie film hustle tribe members that came out from New York, just to make contact Sal and Joe from heckler cane creations, came out specifically for contacts. And I met up with them right before they got on the plane back to New York on the red eye. And they showed me a stack of cards that they had gotten and all the contacts they made just by walking around and meeting people left and right. It is invaluable. I can't express express to you how many contacts you can make there. Another tip By the way, another slight Insider's tip. AFM is over at the at the Loews hotel on Santa Monica. And it is packed it is. It's just crazy packed all the time. A lot of the big players that really are doing business business where you don't need a pass as you go over to Casa Del Mar, which is down the street. So many. So many different players and guys in the business are taking meetings there. The bar there is a lot more open, you can make a lot of contacts there as well. It was a great surprise when I went in there and saw just I mean it was wall to wall meetings and people just sitting down talking and just you could see everyone jumping from meeting to meeting all in the main lobby. It was really, really entertaining but the vibe there is much more chilled than the craziness that is AFM so I hope you guys learned a little bit about the inside world of AFM. It is it really is invaluable for you guys to go. I can't wait to go next year and hopefully have some new patients To try to sell at next year's AFM and if you want to get more details about AFM, I highly recommend you listen to my interview with Jonathan wolf, the managing director of AFM, which is Episode 192 at the indie film hustle.com. forward slash 192 is the Definitive Guide to selling your movie at AFM, and another insider episode I did, which was with Ben Yeti, Episode 15. So that's indie film hustle.com forward slash 015. And Ben wrote, literally wrote the book on how to sell your independent film at the American Film market. So I'll leave those both in the show notes. And of course, the Show Notes for this episode are at indie film hustle.com for slash 198. Now on a side note, guys, I've got some huge news coming up in December, I can't wait to share it with you guys. All I got to tell you is 2018 is going to be sick, I have got so much planned for 2018. Specifically January, what we're doing at Sundance this year, I am going to be speaking again is the first time I've not met announced this that I will be speaking again at slam dance, talking about my love for black magic and black magic cameras, and the resolve. And I'm going to be talking a two hour discussion about how I did my post on the Hulu show dimension 404. As well as the show I shot for Legendary Pictures using the Ursa mini called the space program, we're gonna go through all of that. And also talk a little bit of this is Meg. And so we're to be talking lighting, editing, the whole ball of wax is going to be a lot of fun, we're going to be there, January 20. I don't know what the times are. But as the dates get as we get closer to it, I'll give you the exact dates and time. But I will be at Sundance and I really want to organize some sort of meetup for indie film hustle tribe members at Sundance. So if you guys are going to Sundance this year, please reach out I love to meet you we're going to get we get if there's enough of us, we could kind of set up a little thing where we could all sit down and talk for a while. If you're going to Sundance, please reach out to me at [email protected] Let me know that you're going and we're going to kind of set up some sort of meetup while we're there. So let's see. See how many tribe members are going to be going to Sundance this year, but regardless, it's going to be an insane 2018 for everybody, especially for the tribe. And episode um, two away from Episode Number 200. And I have I have some plans for Episode 200. So definitely check it out. I might be putting it out this week. I might put it out next week don't know. But we got at least one more episode this week. Possibly two, cuz I'm getting a little nutty. Last week. I had four episodes in the history of it of the podcast. I've never put out four episodes in one week. But I love you guys. I love doing this. I got so much stuff I want to give you guys so much information. I want to give you guys to help you on your journey is it's insane. I'm just I'm a maniac Please someone stopped me. Alright guys, so as always keep that also going keep that dream alive and I'll talk to you soon.


IFH 192: How to Sell Your Indie Film at the American Film Market with Johnathan Wolf

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Have you ever wondered how films are sold internationally or domestically for that matter? Today on the show we have Jonathan Wolf, the managing director of the American Film Market or AFM as it’s known. The American Film Market generates over $1 Billion in the seven-day event. Buyers from around the world come to buy, sell and pre-sell their film projects.

Johnathan and I discuss the inner workings of the American Film Market, how you should attend, the difference between creating a trailer and poster for the consumer vs a distributor and a ton more.

Here’s a bit on today’s guest.

Jonathan Wolf has been IFTA’s Executive Vice President and Managing Partner of the AFM since 1998. He joined IFTA in 1993 as Senior Vice President of Business Development and established IFTA Collections, which now distributes millions of dollars in royalties to participants each year. Previously, Wolf spent two years as President & COO of Studio Three Film Corporation, a U.S. theatrical distribution company.

From 1980 to 1990 he held various finance positions within the industry, culminating as Chief Financial Officer of New World International, where he oversaw the company’s international operations. Wolf is a graduate of the University of Southern California Business School.

If you want to sell your film then get ready to take some notes. Enjoy my conversation with Johnathan Wolf from the American Film Market.

Alex Ferrari 2:09
Today's guest is Jonathan Wolf. He is the managing partner of AFM has been there since 1998. He is as they say, the man at AFM. He runs the whole show puts the whole thing together. And I really dug in and asked him every question I ever wanted to know about how to sell a film at AFM. We talk about pre sales, we talk about actors, what their values are, how to actually go to AFM, what to do, how to walk around what kind of meetings you should be taking, all these kind of things and how it just works as a general statement. And it is a big, just like another subculture is a whole other world you know AFM in that one hotel in Santa Monica has its own world, its own rules of how things are done. And they've been done this way. For decades. Now the landscape is changing without a doubt. But there is still very much a place where you you know if you're going to go after international sales, and domestic sales, for that matter, this is the place to be. And I was flabbergasted to find out that in those days, I think it's five or six days that AFM is running in November over a billion dollars of business is done is a pretty substantial, substantial place to be if you're a filmmaker now, if you don't have a movie, it's always good to just go get a pass and walk the halls to see what what people are doing, how they're selling it what you need to do. And this year, I'm planning to be there and I'm going to be there hopefully for the first time as a as a participant, not just someone hanging out, as as we talked about in the show, and in the episode today by the guys who just hang out in the lobby, but someone with an actual pass who's gonna be able to walk around and talk and so on. So, without any further ado, please enjoy my conversation with Jonathan wolf from AFM. I'd like to welcome to the show Jonathan Wolf, the managing director of AFM. Thank you so much for being on the show, Jonathan.

Jonathan Wolf 4:25
Happy to be here.

Alex Ferrari 4:26
So for everyone listening, can you just do a blanket answer of what is AFM?

Jonathan Wolf 4:31
The American Film market is essentially a trade show for independent film where licenses to film and the financing of film takes place. Global export takes place. It's where buyers and acquisition executives from maybe 80 countries come and meet with hundreds and hundreds of distributors and production companies to look for the films they want to buy that are finished the films that they want to buy that are in development and in production. And ultimately it's where film gets greenlit and for film travels all over the world. AFM is really the the door that films pass through to reach the globe

Alex Ferrari 5:12
That are not studio based. This is all for independent producers, mostly.

Jonathan Wolf 5:16
Yes, yeah. So we can get into a little bit later about what's independent, what studio and how all that works.

Alex Ferrari 5:21
All right, cool. Now, what are the basic goals of attendees to AFM from like the different sides of the business?

Jonathan Wolf 5:28
Well, there's three constituents that come to the market. There are the production distribution companies who are actively licensing film around the world, whether they're larger companies like I am global and Lionsgate and Sierra Finnerty down to very small ones that are coming from, whether it's Hong Kong or Argentina or France. And they all have productions that they're looking to license to acquisition executives all over the world, we refer to those companies as sales companies or distributors. Then the second group are territorial buyers, again, coming from about 80 countries buying the blu ray rights for France, buying the transactional VOD rights for for Japan buying the theatrical rights for the UK. And we have about 16 or 1700 buyers that come from all over the world. And then the third group you have is the production community. The middle of the bell curve of that are producers, then writers, film commissioners, post production facilities, lawyers, bankers, agents, really all of those who are involved in the process of bringing films forward. And those are the three groups and they each have a different mission. The the sales companies want to get the packages that they put together in the films that they've completed, licensed and sold around the world. The territorial buyers are looking for the films that that work best in their region and they're the media that they're buying for. And the production community I suppose you could say most are looking either to network or sell something producers and writers have scripts film Commission's are trying to encourage productions in their their region up production facilities are trying to get business in. And since so many films are greenlit at the AFM, it becomes a key destination for those who provide production services where they can connect with people who are about to about to go forward on a film they have an opportunity to to grab some business.

Alex Ferrari 7:25
So there it's basically a melting pot of the world filmmaking community.

Jonathan Wolf 7:29
Yeah and filmmaking community. on the business side, the AFM is about the craft. We don't advise actors to be there. The only reason a director should be there is that if they're actually also the writer, or also the producer, or involved in the pitch, it's not a place for cinematographers. It's about a place for those who contribute to the process of green lighting of film.

Alex Ferrari 7:50
Now I know and I've heard you speak before about Cannes and how you guys kind of complement each other. Can you talk a little bit about the differences in how you guys complement each other at the Cannes Cannes Film Festival.

Jonathan Wolf 8:00
There are three major film markets around the world. And just looking at it chronologically from today there's the American Film market in Santa Monica, the European film market that is held in February in Berlin, concurrently with the Berlin Film Festival, the Berlin alley, and then you have the Cannes Film market or marchais. to film which is held concurrently with can the Cannes Festival, the AFM and and the Cannes market are about the same size, they have the same buyers and the same distributors and sales companies there, there's probably a 90 to 95% overlap, the production community there may skew a little bit more European just because of proximity, the production community here may skew a little bit more American. But the business in the activities and the two are almost identical. They have a festival but the festival runs separate from the market just happens to take place at the same time. And and so the activities are the same the size of the audience is about the same. The European film market is probably about 75 or 80%, the size of each of those who and they probably get about 70 or 80% of the participants as sort of a mid semester stop between these two events one held in Hollywood or in Hollywood's backyard, I should say sanim. And so there's a tremendous value for those traveling all over the world to not only come to the AFM but have their meetings with studios and others in in Mecca, if you will. You have the marsh shade of film, which is held with the grandest of all festivals and in a beautiful environment in Cannes. And so yes, we're not competitors. We communicate frequently. They run a website called Senado. We have a feed of our database that goes straight into sananda. So when someone registers for the AFM within 24 hours, they're flagged and sananda is attending AFM so we work you know, in a very complementary way. Fantastic. No

Alex Ferrari 10:00
How can an independent independent producer with a film get the most out of AFM when they attend? Um, well,

Jonathan Wolf 10:09
I want to make sure I'm clear there's there's producers with the film that are finished and yes, for the film that are in a project state.

Alex Ferrari 10:15
So both both both both both tracks.

Jonathan Wolf 10:19
For producers let's let's do it chronologically, where producers with a project and let's let's start by saying that's a finished screenplay. What you don't find in the independent world are our production companies that are willing to pay for development costs. A producer who walks in and says, I just signed the rights to this guy's life, and it's going to be great, and I'm looking for development money for people to help go let's go hire a writer. They're not going to get much traction unless this is just you know, a superstar that they happen to sign. For the most part scripts are written on spec when it comes to independent film. So producer coming into the AFM needs to have a finished screenplay or screenplays. Hopefully they've got multiple projects that they're working on. And their goal really is to connect with the distributor, the sales company, we use those words somewhat interchangeably. Who is adept at licensing those films, packaging those films, assisting them and finding the right production subsidies and, and soft money, if you will, the incentives to help bring that film forward. And so when, when a producer is coming to the AFM, they're looking for the right match. We've got about 400 companies with offices, these companies come from 3035 countries, not every company is right for every film. So the producer is looking for who handles this kind of genre who handles this kind of budget? Are they interested in projects that they haven't produced themselves? Will they get involved in the packaging? You know, you've got decision makers from 400 companies under one roof. It's It's a unique opportunity, but it's an opportunity for someone who's prepared. And that means doing the homework well in advance. Someone who just shows up on opening day and thinks I'm going to go door to door and everybody's going to talk to me is going to walk home very unhappy. FM is about appointments, and schedules are being booked. Now as we speak. We're two weeks out from the show. Producers need to do the research. Use IMDb Pro, use our website, the film catalog comm which you go to from the FM's website, where you can see the films that each company handles and get a sense of who's right start to contact those companies set up meetings, you're looking for a 10 minute meeting, you're looking for a pitch the goal, the producer in that first meeting is to get the listener to read the script. That's all. A lot of times producers will come in and say I'm trying to close a deal and read the script yet they don't have the understanding of the sales process. Each step is just to get to the next step.

Alex Ferrari 12:59
Now as far as how about if you have an actual finished project,

Jonathan Wolf 13:02
You have a finished film first congrats to anybody that does, right. The the process is is similar. What's different is you're not trying to get someone to read a script, you want to receive the film. Now our advice always is if we have a finished film, set up acquisition screenings, la New York, London, you know, 10 o'clock in the morning, three in the afternoon, not in the evening are not cast and crew people don't go to acquire films and their time off. These are business events, set up acquisition screens, get that film to be seen in a dark theater, not in to care 4k, not on a blu ray. That's, that's being watched on a small screen while the kids are screaming or the phone is ringing or things like that, you really want to present the film The right way, if you think it has any hope of seeing a theater in terms of its release, that's the manner that you want to show it. It's no different than a car show where they've got the lighting just right on the car and somebody is waxing and adjusting every hour, you need to make sure that you're unveiling your your hard work in the best way. And a lot of times you reject the company that says Well, we only take blu ray submissions. Most of those companies never acquired those anyways, they just want to see what's up out and out there in the marketplace and maybe a peek at what their competitors may or may choose to do. So. If you don't have if you haven't set that up your goal the AFM is to get the film seen. The best way to do that is I believe, is to select four or five or six scenes from the film that are great examples of the production quality of the work of the director, the actors skills, put them together on a secure website, whether it's Vimeo or something else, the whole thing is three, four or five minutes and send links to it and say here's selected scenes Take a look. We think it's perfectly positioned for your company. Again, the pitch is going to change whatever the company is the pitch is targeted uniquely at that company. And take a look at this. We'd like to meet with the At the FM we're confident we're gonna, you know, close the deal with the FM or right afterwards. The key thing here though, is the producer is not supposed to cut a consumer trailer, the producer is not showing the distributor how the distributor should market the film, the distributor, the producer is selecting the best scenes to show the quality of the film to get the buyer to go see it. b2b marketing and b2c marketing are very, very different. And producers frequently miss what that is. Even when these sales companies cut what they call product reels, not trailers, they cut product reels in a way to entice the territorial buyer. It Again, it isn't cut, like a 62nd or 92nd. trailer for a consumer. In this case, you're not even trying to do that you're trying to show here four or five, six scenes. The goal again, is to get the viewer to invest 90 minutes to watch the film to see if it's a good acquisition for them.

Alex Ferrari 16:03
So do you suggest no trailers? How about have a poster?

Jonathan Wolf 16:08
No, I mean, look, let me back up for a minute. Too many producers fall victim of a disease. And that disease is believing in the theory of transferable expertise. I am an expert in one thing, therefore, I'm an expert in all things, doctors and lawyers, you know, guilty of that all the time. producers. I'm an expert on my film. So I know which screens in the east side in New York, it should plan. I know the best costumes for the actors. I know how to cut the trailer, I'll help oversee the artwork. And that tends to be a disaster. The best producers the absolute best are the ones that bring all the experts around them and create teams for each film have the best of the best, the producer that says I know how to sell my film is the producer that usually fail. And so no, it is an artwork. It's it if the film is done, it's simply here's the film, take a look at the film, the professional is not going to be driven by the artwork. You know, thank you, Mr. producer for spending all this or miss producer spending all all the time to create art that you think I might use to market that to the consumer to motivate me, just tell me the genre. Just tell me who's in it. Give me get a sense of the storyline, and I'll decide if I want to watch the film.

Alex Ferrari 17:27
So then when you're at AFM, they see all these posters everywhere. Who are those posters aimed and those banners aimed at

Jonathan Wolf 17:34
The posters are aimed at the territorial buyers. These are distributors who have created art. They've created art for the packages or the finished films that they have the the the buyer from Japan who is looking for running a Blu Ray Blu ray distribution, the theatrical buyer from France, each of those buyers are looking are looking for film for their territory. And so this is what you see at the AFM is b2b marketing, not not B to C. Now some of it will carry over. Sure, but it's specifically designed, you'll see a lot of posters at the FM with little fine print at the bottom credits, not contractual. Why because at the AFM, they're creating art as a one off, that's only going to hang in that room and then off it goes. that's designed to get the b2b buyer into that sweet, it may not be the contractual credits that ultimately have to be on the poster. It's the art and the message and the cast. You know, you're very rarely unfortunately, going to see the writer listed on any of these posters. Why? Because the buyer is not looking for a writer. But contractually, it's gonna they're gonna have to be there on the consumer art. So these are b2b b2b posters, b2b art.

Alex Ferrari 18:43
Now, I've always I don't know if you can answer this question. I've always wondered, when you say like the theatrical buyer for France? Who puts that person in that position? Or, or the blu ray come? Like, are there just individual companies? Or like so there's multiple theatrical for France, like when you sell a country, like I just saw, I just sold my movie. And it my movie is going to be at AFM this year as well, that I directed. And we just sold South Africa for for Altair, you know, all media and we sold China as well. Who who puts these people in power? Are there multiple versions? Or is it just really just one person?

Jonathan Wolf 19:18
Well, first of all, Nobody puts them on power. There's much then golly, out there. Okay, good. You know, talking for a moment about the difference between independent distributors in the majors, the major studios, seven major studios, they have a web of distribution around the world, meaning a fox makes a film. They just send it the elements and they are to their offices in Japan, their offices in France, and their web distribution pushes that film out into literally every village Hamlet and burrow. That's what makes them a major. They have a web of distribution. Independence don't there's some independence who have distribution in their home country. But but beyond that they don't. So they look for local distributors, local distributors who are in the business of distributing film. And it's not the seven major studios. And there are distributors in every country. I mentioned, let's say in France entertainment film, I saw UK entertainment film distributors, a large local distributor. In Australia roadshow, you can go on and on. There are 1000s, there's probably about 3500. If you include all the broadcasters of distributors, VOD platforms, blu ray distributors, theatrical distributors around the world, these are the territorial buyers who are coming in to buy the film. So when you see a film distributed, you know, in the US by a studio or by a small independent, there are those same independence all over the world, they just don't exist in the US. They exist everywhere, who's distributing all the French language films, it isn't the seven studios. It's local French distributors, who is distributed Italian film and British film and, and, and, and Chinese films. And so all of those distributors are looking to acquire imported product, not just local product. And so it's it's a mix. And so nobody anoints them they have these are entrepreneurs, some of them are publicly held companies in their in their country. And they're coming to acquire all of the rights from from transactional VOD, all the way up to the theatrical rights.

Alex Ferrari 21:32
So it's it's it's similar, like if I was going to sell a movie to Disney, Disney would own Disney is one of many distributors in the United States you could buy from, but they would own the rights for the US if that was the deal that we made. And similar to every other country.

Jonathan Wolf 21:47
Key thing is, is you know, film is not like selling televisions, when you sell televisions, as a manufacturer, you can sell it to competitors, retailers across the street from each other. It doesn't matter. When you license film, you're always licensed exclusively by media and by territory. And so if a buyer comes in and says I'm buying the theatrical and blu ray rights for France, that distributor that buyer is the only person that's going to have that film in that country. And so this causes this causes a lot of negotiation, of course, because if the if films are highly sought after, there will be multiple buyers coming in making offers and it takes quite quite a while. It's one of the reasons the FM is seven days long. trade shows most industries are two and a half to three. FM is busy on day seven as we are on day one. But so anyways, nobody anoints them, these are entrepreneurs around the world, and they the independence are dependent on local distributors throughout the world because they all went away. the studio's wouldn't be buying the film's.

Alex Ferrari 22:52
Right, exactly. Now, can you talk a little bit about pre sales? And and also do they matter as much as they did in yesteryear?

Jonathan Wolf 22:59
Yeah, absolutely. There's been an evolution, just for those who are not familiar with it. Pre selling is bringing a package that's got a finished script cast attached to director a budget, a start date, and, and selling the film to territorial buyers, and hopefully selling enough of the of the world, whatever your needs happened to be, they're able to use those contracts those promises to pay to borrow against them at a bank and help the production financing. Pre selling. And I'll just come back to your question in a second pre selling does something else, which a lot of producers Miss. And that is, is it gives them marketplace pre acceptance. I'll use an example Jimmy Choo, makes shoes makes 10 or 15 shoes, and he goes to whatever the marketer or event that they have for the shoe industry. And he puts out all the shoes and all the retailers come by and they buy different shoes, and there's three or four shoes left that nobody bought. He made me really unhappy, put a lot of time and effort into it thought it was the best shoe in the world, goes in a shelf and never gets seen again. It's not going to manufacture the shoe that nobody wanted. In the in the garment industry. They get to to make samples. They pre sell the samples, they see what's going to be bought and they don't make the rest. Well, when you come to film. We've sometimes heard this phrase, a film that it should have never been made statement. But we've all heard it before. In almost all cases, that film did not go to a market and attempt to be pre sold. When you go to a market and you say here's the cast, here's the script, here's the budget, here's what we're doing. And you have a good portion of the world is coming in the different buyers, all the different buyers and what their needs are and their offers and looks like it's working terrific. And then you spend seven days at the American Film market. You have dozens and dozens of meetings of buyers all the world. At the end of the day got one or two offers and sort of a shrug of the shoulders. You're in the shoe world Put the shoe on the shelf. In the film business, he got to put the script on the shelf and walk away. And there are companies that do. And this is very, very difficult for the creative producer, who's really not the business person, but isn't, you know, just totally invested in, in the craft and then that that film, it's hard for them to walk away. So if a producer even has all of the financing, my advice is, that's terrific. Connect with the sales company, before you make the film. First of all, they may give you some marketplace advice, what actors work better than others that are not telling you to take it to your film your money, but they're going to give you some marketplace advice, then go to market, tempt to pre sell the film. If it doesn't pre sell, we can still go make the film. But you've been truly warned. You've been truly warned about what what might work and what might not. So pre selling works. And pre selling is still very active. But it's active at budget levels that start to get above 567 $800,000 pre selling and budgets below that it tends to be too small, the buyers don't need to guarantee a distribution pipeline of sorry films to fill the distribution pipeline at a budget to that level. So they'll tend to wait. And as budgets have bifurcated over the last 10 years, meaning they're getting bigger or smaller. 15 years ago, you could have made a $5 million horror film and made money on it. Today, it better be about 1,000,002 or less. The same thing, budgets for theatricals are getting much larger. Like there's always exceptions, and we saw one last week or two. But budgets are getting bigger or smaller, the bigger the budgets, they're much more dependent on the presale, once you get below about a half a million dollars much less because the producers tend to find the equity and the incentives and the deferrals. They need to make the film without pre selling. And so now I wouldn't go try and pre sell a $300,000 film. And by the way, there is a business. anybody listening that thinks with a question mark? What do you mean 300. There's lots of people that are making $300,000 films, selling for six, seven and eight, when all the deals are in and have a terrific business. There are niche markets for all kinds of films, you know, from most notably, I suppose, in the US faith based faith based filmmaking

Alex Ferrari 27:29
Family and families as well.

Jonathan Wolf 27:32
In that budget range. And and interesting left, it's still doing very well in blu ray. But so yes, presale is one of the key components of financing film, along with equity on with incentives along with deferrals to bring a package together.

Alex Ferrari 27:55
Now, can you explain to the audience and I preached this a lot on the show? What the importance is of cast, especially to an international community and an international buyer? Can you explain why it's so important? And in any suggestions to help a filmmaker along with that, that whole process?

Jonathan Wolf 28:14
Yeah, I'm just gonna skim on the surface of this question, because I'm not out there selling every day. And I think sales companies can give a more robust answer. But the the simple answer is, the buyer is taking a risk on the film, the more that the sales company can show the buyer how to sell it to the consumer. You know, a lot of times, the sales companies say, Hey, we cut four trailers, we want you to see all four look at which ones might work for your audience. We had 25 comps on the poster, we took five to finish. We're only using one in the US, but we want to show you the other four, because they may work better for your audience. Well, cast is another element where the territorial buyer can say, Ah, I have something to put on my artwork. I have a hook cast. You know, when when, when Tom Cruise is paid $30 million for a film. He's not 30 times better as an actor that someone's paid a million dollars, or 300 times better than someone's paid $100,000. And when you go above a certain level of payment for an actor, you're buying their marketability and your pre buying a marketing campaign. And so the question simply is, is does that person bring marketability and saleability to the film and and that's that's why for you know, all the way back to the beginning of film. Why some casts are paid more than others because they'll resonate with the audience because the pudding I get on keep using Tom Cruise for an example. You're guaranteed millions and millions of dollars. publicity. And you're also guaranteed a built in audience that will at least look at the trailer and pay attention. And it tells the audience, well, this film is gonna have certain production values, if this actor chose to do the film, it'll be noteworthy enough that I should take a look at it too, if they only had actors I've never heard of maybe all the good actors passed on it, you know, it's, it's almost like like giving it a seal of approval, that or reinforcement that the film is worthwhile. So it really has to do with marketing from just different angles. And it depends on what you know what the genre the film is, and who the cast is. which pieces would have just mentioned, you know, fit fit

Alex Ferrari 30:42
Right now, would you suggest that filmmakers before they cast before they sign the dotted line with a cast, go to distributors and find out what they think that that cast might be worth of that actor might be worth because I did a specific group of films with an unnamed actor I won't say his name, but he had diluted himself so much that whatever value he did have once was not people are like, I got five other movies with him in it, I really can't buy it. And the poor filmmaker was stuck in a holding the bag. So do you suggest that they should talk to distributors prior to signing those deals?

Jonathan Wolf 31:17
Yeah, and this comes back to the comment about pre selling gets you marketplace pre acceptance. You know, this is called the film business, not the film, endowment. Film arts and download, right, this is business and the goal of every producer is to get an audience. It's we're not painting paintings that we do out in a park, and then we show to our family and it hangs in someone's bedroom. You know, that's a swell thing for art. artists who want to do films for themselves. You know, I tell producers a lot, the director comes to you and says he just written a great script, he wants to direct and you ask him who's the film for, if the director tells you a specific audience, young women, middle aged men, whatever it is, you say, Great, the director says, well, the film is for me, the producer should just get up and run out of the room. Because Because this is a film business, and those working on it constantly have to face the audience. And everything they do, you know, all across the board even even when it comes to when you talk about casting, when it comes to to costumes, when it comes to language is this for girls 13 to 17, which means we need a PG on it in the US and then some similar in other countries. So the shots that we have the the the the costumes that we do, the language that we use has to be at a certain level, or we going somewhere else that the eye has to always be on the audience. And and so where wherever that that's going to fit. Um, you mentioned actor I'll mention and I'll mention one Nicolas Cage. Yes. So there was a time, there was a time where everybody I knew in distribution had a Nicolas Cage film, where everybody had one, right. And he became for a period of time, an independent film, very diluted, he was working nonstop. And there were five films when you're at the AFM had Nicolas Cage, either in pre production in production in post finished. And so yeah, anybody can can become diluted. But that's that's the actor's brand. And every actor manages their brand in in, in a certain way. And the producer has to understand when they're casting, that they're not just getting someone who's an actor. They're buying a brand, you know, to Nicolas Cage, Tom Cruise, they're buying a brand, whether it's a very small brand, or a large brand, they're still buying the brand. What's that brand? bring to them most both positive and negative.

Alex Ferrari 33:43
Now, can you discuss a little bit about where we are today in the DVD, blu ray and T VOD, and svod markets as opposed to yesteryear as well.

Jonathan Wolf 33:54
Yeah, I look, I probably don't have a lot of new data that we see the consumers you know, more more willing to prep prefers rather to just get the delivery online. I mean, it's, can you imagine that they're going to look back decades from now and say, to watch an hour and a half of television, people used to get in their car, ride in the rain, go around the block, looking for a parking space, go into a shop, you know, go through the whole process waiting in line, blah, blah, blah. And then if they didn't bring it back in two days, they started getting penalties like a like a library.

Alex Ferrari 34:29
It's barbaric. It's a burger.

Jonathan Wolf 34:31
I mean, talk about a transitory technology of VHS from the mid 80s till sure when it finally went away and blu rays as well. I mean, it's it's Goofy, that that it was actually there and truly hollywood, hollywood. Video stores along with blockbuster, they were bubbles, they wrote a great bubble. A lot of people made a lot of dough. But but it's it's technology now is is you know, moving that aside There will always be a packaged goods buyer, the same way people are still buying CDs. They're still buying vinyl. Though most of the listening is done through different digital platforms, and delivery systems, it's it's the same way when it comes to to film in the home. It's just moving in that direction. And you know, who ends up being the big players? We'll see we can we just saw this week the announcement of not movies everywhere, what is it? Movies time? Yeah. And, and so everything's going in that direction, where eventually you're going to, if you want the film digitally available for you, you're going to pay specific, a certain fee. And it may be a higher fee when the film was released, versus a lower fee, you know, later in the film is lized. And once you pay that fee, you have it forever. But what this is done and what the subscription business has done, it is destroyed the value in film in the ancillary markets. And let me explain what I mean 10 years ago selling a film at the AFM to let's say, an Italian buyer, that Italian buyer could forecast what the value of that film was worth in second cycle syndication in Italy on television, and years, five to 10 of the film's life, they would know what that value was, and so they could determine when buying that film, what the life of that film would be. And you would look at networks like TNT and TBS, and FX. And most of what you saw at night were reruns of of action adventure films and whatever their their flavor was. And you'd see it all the time. When subscription models moved up, led, obviously by Netflix, it slowly but swiftly destroyed the value of all of that syndication, not just in the US, but globally. Now, when buyers buy a film, they're looking at the revenue stream about three years out, not 25 years out, because once the film is if you have a Netflix subscription, the film is on Netflix, you're never going to watch it on TBS, what for? Why should I watch it with the commercials at a specific appointed time? I can download it anytime I want for free

Alex Ferrari 37:21
And edited and edited down for content as well.

Jonathan Wolf 37:23
Absolutely. And so one of the reasons that we've seen the huge growth and event television and series and all the specialized series and over 400 narrative series in the US is because these networks had no choice. The model that they started with of showing event film, right off of the theaters, TBS film, 18 months out of the theater going to be on TV is gone. Yeah, they have a few there, you can still see diehard, you know, whatever it is, but most of the stuff is gone, they have no interest in anything beyond a very, very narrow band that happens to fit what they need. And so suddenly, they their, their, their source of content when empty, and they had to create content. And so all of them started, I'm looking at American, you know, AMC stance, most people don't even think about anymore American movie classics, right. That's what it was. And all it showed was classic films, you know, completely gone. Now we're looking at their event series. And, and because why? Because all the films they want to show you can go find them on Netflix now. It doesn't matter destroy their business, but they managed to pivot.

Alex Ferrari 38:38
You're absolutely right. They did pivot and it they could have gone the way of blockbuster but they actually pivoted in Breaking Bad madmen and walking dead now.

Jonathan Wolf 38:47
Yeah. And so and and a lot of them are you know, the question is, well, then this is not the really top of our discussion today. How long? Is this also a bubble? Is this being fed by all the consumers who are unable to unbundle their cable and satellite packages? So fees are flow into all of these networks? And once that unbundling starts to get some momentum? Are the fees going to drop? Are we all paying taxes for films and TV shows that we never watch? And as we unbundle will, that will that source of financing go away? My belief is this is a bubble as well, we'll just have to see how long it lasts. And so so when you talk about the impact of the technology on film, what it's really done is it has taken a big bite out of the ancillary value, and so that the buyer has to look at what they're going to make in a short window, rather than than a long window.

Alex Ferrari 39:40
Now, can you talk a little bit about how distributors set up booths in the hotel rooms at the actual at the actual AFM and so people understand how it works when they walk around.

Jonathan Wolf 39:52
You know, for those who've been to a trade show before you go into big Convention Center and they're aisles and they're different companies, big and small. Whether it's a restaurant show or a furniture show or a Consumer Electronics Show, they're all pretty similar. What we're at the AFM is also a trade show in that way where we have what we call exhibitors with exhibition space. But what makes us different is we're not in the convention center, we're in a hotel. The AFM is held in Santa Monica at the Loews Santa Monica Beach Hotel. It's a 350 room hotel, we close the hotel for two weeks, no one sleeps in the hotel for two weeks. We all have the beds and most of the furniture out of the hotel, and the hotel turns into an office building. And we refer to our exhibition space, not as booths but as offices. And so you might have a large company like Lionsgate come and take 6789 rooms and create a suite of offices because they're large, you might find, you know, very small companies, let's say it's it's trauma, and Trump is coming in and taking a single office. You might studiocanal, one of the largest companies in France takes a large suite. And so they're turning their their space into offices. And they do this because this is about having meetings. It's not about the territorial buyer coming by, let me scan your badge. And I'll follow up with you in the months to come about our our next lineup, like you might have, you're selling couches, and here's this year's model, film is very delicate, it depreciates quickly, it has to go to market globally and simultaneously. So when films are being offered and packages are being offered. These are about closing deals with the AFM not creating sales leads. And it's one of the reasons the market is seven days long. Because these are negotiations, we will go into offices, they're sitting behind desks, the offices are filled with couches and desks and computers. And, and, and obviously lots of screens of different sizes. And it's about it's about closing deals. And so the companies who were there, the first few days that they're there this appointment show to there's no drop bys. But but the show starts right now in a couple weeks, I would imagine that most of the distributors, their schedules are three quarters full the first few days. Those companies are looking to license the packages and the finished film that they're bringing to the market. And those are their key meetings, the first few days as their schedule start to lighten up days four through seven. As they have time, they will start to have some interest. And I have to you know, caution. It's some interest in meeting with producers and starting to hear about new projects coming forward. Some are very interested in doing this. Some say they don't want to do it at all at the FM some will only do it when they have free time you catch them at the right the right moment. But every company there has to find new content and new projects. And so they all have meetings, it's a matter of how much they'll have their FM time they'll spend on that. But their first few days and their primary focus is licensing the films and projects they brought in I need to add one thing to this. We estimate that in the seven days about a billion dollars in deals will be done on independent film at the AFM. But the more interesting number for me is more than half of that over a half a billion dollars of business will be done on films that haven't started shooting yet. We use the phrase presale, but but if you start to wrap your head around a half a billion dollars in business on independent film that haven't been greenlit that's what happens at the AFM. You know, we hear sometimes about a producer with a film that got went to Sundance and at three o'clock in the morning, the distributor came along and saw the film and by by dawn they had a deal and the Sham was popping, we see one or two of those stories every year in the trade. I can promise you, there are dozens and dozens of producers that have worked with a sales company for many, many, many months and and put a project together, got the cast committed, got the bonding company in place found the equity found the incentives, but they need a portion of the of the world to be pre sold or they can't make the film. They don't have the green light or they sold a portion of the film. And they walk in on pins and needles and they walk out with a green light and there's more champagne corks pop popped after the AFM than at any festival. Because they they walk in with uncertainty and they walk out with a green light

Alex Ferrari 44:25
A billion dollars in seven days. That's very impressive. And it's consistent. It's consistent. I've been like because you've been with them since 98. Correct.

Jonathan Wolf 44:33
Right and and and one of the reasons you know people say well, why why even travel? Why do people go to trade shows why why do they go to film markets, they can watch everything on a screen technology is there. The fact is when the FM started in 81, there was VHS, you give a VHS and a FedEx box and send it off. The technology has always been there in one way or another to keep people from getting on planes.

Alex Ferrari 44:57
We'll be right back after a word from our sponsor. And now back to the show.

Jonathan Wolf 45:08
The reason there are markets a few things first, markets very inefficient film markets, people who have to travel get on planes go for all over the world just for the privilege of buying. In efficient markets drive up prices, a distributor and a producer want the best prices possible. So there are loads to see and efficient marketplace. We have seen time and time again, entrepreneurs with websites saying we're gonna set up a website for you to buy and sell yourself. And the distributors have turned their back on them time and time again, because the distributors and producers don't want an efficient website don't want an efficient marketplace. inefficiency drives up prices. But the other more important thing is, markets create an auction environment. If you send an email to a buyer that says, hey, today, we're, we're now starting sales on this or that film. And here's the script and have a read. There's no sense that I need to move in the next 24 hours or that film might be gone. But people have traveled from all over the world. And they walk in the door of the Lowe's. They're learning about projects. And they only been announced in the prior two days for the prior three days or even that morning. That if you do the announcements right around the show, and you'll see a lot of these coming up in the coming week or so. This creates an auction environment. And this is auctions drive up prices. And this is the goal, the producer and distributor, they want to hold back and create that feeding frenzy, if you will. And we haven't seen the advances in technology in any way, reduce the amount of Business at the markets or reduce attendance. In fact, technology is just helping to increase the face to face value by being able to set up meetings, set up calendars, see trailers or product reels online, but know that the sales company says you can see the trailer, but I won't entertain offers until you arrive in LA. They want to create that auction environment.

Alex Ferrari 47:13
And at the end of the day, it's it's a very handshake, look you in the eye kind of business at the AFM. Is that correct?

Jonathan Wolf 47:20
Yeah, well, it is until it is that everything's in contracts.

Alex Ferrari 47:25
No, no, I of course in contracts, but I meant more like I need to like the relationships that you build and, and well, year after year, you keep meeting the same distributors and same producers and you start building relationships up. It's something that is is very it

Jonathan Wolf 47:39
Is that way for product lines. Yeah, I back aways ago, the producers involved in the Olsen twins videos, were considering a different international distributor. And I went to one distributor and said, Hey, this is you know, I can set up a meeting Do you guys want to chat? And the distributors said sales company said no. And I said why this is a slam dunk. It's also in 20. Videos distributor said, we sell theatricals, we have a certain clientele who come to us we don't sell to the buyers who are looking for that type of film. And we'd have to start a new segment of our business and it wouldn't be a good fit the same way, you know, film companies not like Macy's where they have everything from expensive Armani leather jackets to $10 sunglasses, distributors work in narrow bands, whether it's budget language, genre methods of financing, and so so you know, it's it, have to identify for each buyer, each of the buyers identify the distributors and have the product that that they're looking for.

Alex Ferrari 48:48
Now, can you also explain the whole layout of AFM meaning the lobby and then the different floors and what passes get you into what floor and all that kind of stuff? Because I've heard of that. Before I was actually at AFM, I heard the legends of like you need a pass to get this and the pool and deals are made out of out the lobby, you know, all that kind of stuff. Can you talk a little bit about that?

Jonathan Wolf 49:09
Yeah, it's it's it's actually an unfortunate discussion. If you look at most trade shows, and if you look even at the Cannes Film market and the European film market, you have a badge and you walk in the door. And it's as simple as that. At the AFM. The lobby of the hotel is public space. And for a variety of reasons that have to do with security and other things. We don't have security on the front door of the hotel. If we did, we'd be like any of the other markets, you have a credential you're walking into the event, but the lobby is open. And therefore you need a badge to attend the market. You just don't happen to need a badge. If you want to stand around in the lobby. There are about 12 chairs in the lobby. Yes, I know, the place to go hang out and it's usually only those People who don't have a badge and are you know, and are just hanging out. It's it's not a place most people with a credential stack. Once you start to go upstairs or elevators, you need a badge to access the any other part of the hotel. And this is where all of the the sales company offices are. So yeah, there's a lobby, and you know, but But boy, you know, if you're hanging out in the lobby, you're sort of tagged to someone hanging out in the lobby. You know, we had Adam Carolla come and speak, when he had done his film, road heart, and he walked into the lobby through the lobby to get to the, to the seminar room that we had set up. And the interviewer asked him his first question. And before he answered the question, he looks at the camera looks at the interviewer and says, Did you see all the douchebags in the lobby? And he does a minute and a half riff, including things like if they'll kind of bomb this place, the world's supply of douchebags it take 10 years to replenish. went on and on. Of course, we had this pipe out into the lobby, we have screens in the lobby,

Alex Ferrari 51:13
Oh, no, no.

Jonathan Wolf 51:17
Dude, he's talking about you. So all I can save the listeners is, if you come into the FM come to the FM with a credential and your player. If you're hanging out in the lobby, and, you know, I gotta say, you know, there's some people who are actors or actresses and think if they're down in the lobby, they may get discovered and hang out in the bar. It's, it's, it's, it's just not what you do. It's really an indication of I'm not in the business.

Alex Ferrari 51:43
Got it. Now. Did Adam make it out Okay?

Jonathan Wolf 51:47
Yeah, he did. You know, I think we sort of snuck him out the back door, because he realized it wasn't safe to go through the lobby, his exit. But it's so you know, look, it was funny. This is my show. And I'm not insulting my show, of course. But I'm but I'm just trying to say that, that the people who have credentials when they're going to go grab a drink at the bar, they tend to go to a bar, one of the other hotels and not downstairs at the lows.

Alex Ferrari 52:15
And there's plenty and there's plenty of bars and restaurants around the lows, that there's so much business being done, if not at the lows around the lows.

Jonathan Wolf 52:24
Seen in some of the other hotel lobbies.

Alex Ferrari 52:26
Yeah, no question. Now. Can you explain what the IFTA is?

Jonathan Wolf 52:32
Sure. The Independent Film and Television Alliance, that's the parent organization of the American Film market. We're a trade association. And for those who don't know what a trade association is, trade groups are brought together by by industries, to perform services that are best done collectively, for that industry, whether National Restaurant Association, American Medical Association, Motion Picture Association. Usually those are things like public policy, advocacy, lobbying, research programs, that that all the participants in an industry can benefit from, without giving specific benefit to one over another. So competitors get together there 4000 trade groups in this country alone. They're viewed by the IRS is as nonprofits. It's a dues based system. In in the film industry, I mean, you have an NA B, the National Association of Broadcasters, you have the Motion Picture Association MPa, who only has seven members of seven studios, the Independent Film and Television Alliance, we have about 130 members, we represent them from a distribution standpoint, from an export standpoint, we're an international trade group, not domestic, we have members in about 21 or 22 countries. And the common bond is they are all exporting film and television, outside their home country. And so we provide programs and services and representation around the revenue flow. For the most part, we don't look after their needs on the production side, because production is very local. A member in Hong Kong who has an issue with production is going to have a very different issue than a member that might be in Australia, or a member in the UK or the US. But their export and distribution issues are very, very similar. And so in fact, we have more members in Hong Kong than we do in New York. And so, if you look at our website, don't go into a lot of the details as I FTA hyphen, online.org. You'll see, you know, touches on a lot of what we do, but the number one thing we do is advocacy, lobbying, the voice of the independence there are many, many areas where laws are being around the world where laws are being proposed, that could benefit the studios and hurt the independence. And a lot of times we work hand in hand with the MPAA. There's somebody in our office is probably on the phone every day with the NBA. Because various issues of protecting intellectual property, we're both on the same side. But a lot of other issues, we're on the same sides and, and we'll put together united front. But then sometimes we are on the opposite sides of the table, on on on some issues. And so I'll give you a simple example, if if in a country, there, were going to pass a tax a two cent tax on the box office, there was going to go into a fund that was going to help local production or local distribution, it's possible that the MPAA might be there saying, well, this is just going to be, it's going to hurt box office revenue, it's going to decrease our revenue, we don't think it's right, blah, blah, blah, and a competitive, we would be in there on the other side of the table with the local distributors saying this is good, because independence are dependent on strong local business, infrastructures and film to have customers. There's a big, big move for the last five years in the UK and the EU to create a single digital market. Meaning that if you license your film in any country, for and digitally in any country, it must simultaneously be available in all countries now. Wow. Well, this destroys territory licensing, right? But it's perfect. If you're a studio or Amazon or Netflix, no problem, you just put it out all at once. Right. But if you're licensing by territory, and suddenly your little license in Denmark, that person has the right to show the film in Italy and Sweden and, and everywhere else. You've destroyed that value. We've spent five years constantly in the EU, building coalitions to fight that that legislation. So you know, I'm not the expert on this. And I'm not the one that's sitting in the EU. But but but there are many, many areas where the business model of the independence is so different than the business model of the majors, that the independence need that representation to assure that they stay alive.

Alex Ferrari 57:01
That's, that's fascinating. I had no idea about the IFTA and what they did. So thank you for, for helping us out as we as we continue to grow as an industry. Now, you guys do a lot of educational and panels at the AFM. Are there any conferences or panels that you are personally excited about?

Jonathan Wolf 57:23
Well, I'm always always have a lot of fun at the pitch conference, the pitch conference, it's a little different than most pitch conferences, most pitch conferences, you're hoping someone might want to be involved with the film or the giving you advice on how to change the film up a little bit to make it more marketable. Our pitch conference doesn't critique the content, it critiques the quality of the pitch. It's all about the sales process. And we have about 25 filmmakers to come up on stage, we have a panel of three experts, they do a two minute pitch, and then the pitch is critiqued. And, and the audience never leaves. Everybody is taking notes not on the project. But learning how to pitch because one of the problems that we see in our industry is that that selling the sales process, the value of the salesperson is horribly undervalued. Sales is one of if not the top paying profession in the world, much more than doctors and lawyers. But we as consumers actually don't come in contact with salespeople we think we do. But we don't. Yes, if it's a house or a car, that's it. But I'm not talking about someone behind the cosmetics counter at Macy's. But if you sit and look around anywhere who sold the asphalt in that street who sold the metal in that building, most salespeople are a b2b business. And it's a very, it's a very highly skilled area. And producers don't understand that they're in the business of b2b selling. And and so we try and help them understand creative producers, what the sales process is about. The best example is C at the FM and we'll see it over and over. Even people listening to this are going to do what I'm about to say don't do which is they will walk in, they'll meet someone. They'll say hello, they might ask their name if they get that far, and then they'll start to tell them about their pitch. Have you ever walked on a car dealer's lot? The car dealer walks up to you and says Hi, my name is Frank. I've got the perfect car for you. It's a red four door it gets great gas and the blah blah, blah, blah, blah tells you all about the car. No, the salesman first qualifies the prospect. When are you buying What are you looking for? What's your economics? What's your budget, and then tailors his pitch to meet the needs of the prospect? Over and over? I will I will walk by offices at the FM an internal be out there. You know person taking messages. It's going to schedule. How's it going? great company pause for a second, let's say yeah, I've just heard three pitches today. I'm an intern and they keep pitching me. But it happens. Because there's there's this feeling in social media, it's create a little bit of this. There's a feeling of, if I just put it out everywhere, like pixie dust somewhere, someone will mention it magically, I'm going to get that that that phone call. It's faith based pitching. And, and that's, that's not what works. The first thing, the salesman producer, does not the creative producer, but the salesman producer is does is understands what the buyer wants. You know, we talked about the sales companies. Let me let me just go off topic for a second. We talked about the sales companies that the AFM and their, their licensing to buyers from all over the world. These are the best pitchers in the world, bar none. And I'm not exaggerating, think if you're a salesperson for a film company, the acquisitions department has put together three projects and they said here they are. There's a romantic comedy, there's an action adventure, and there's a real tough drama, American drama, and they're on pre production, your job is to go sell them at the AFM. That's your job, every 15 minutes, you're meeting with buyers from around the world don't always speak English. Well, they have different needs and different things. And every 15 minutes you're pitching, and you're actually selling and closing deals on films that you weren't involved in packaging, that you may or may not like, it doesn't matter. And this is your job and you don't sell films, the films don't get made and you don't have a job. These are the best pitchers in the world. And, and the skill is so undervalued by producers, they think it's like like their firstborn, I know how to dress it, I'm going to you know, hold his hand walking to school for the first day, I'm going to tell the teacher how to talk to my child, you know, they have to hold on, they won't, they won't put it in the hands of someone else. You know, in my advice, I tell a producer, find a sales producer, your creative producer, and then don't go to the meetings. And they'll look at me in horror. Like what do you mean, I don't go to meeting you're sold a house or a condo? The first thing that salesperson says I'm showing the house today get out?

Alex Ferrari 1:02:11
Yes, you're absolutely right. Yeah,

Jonathan Wolf 1:02:16
You're just gonna mess it up. Because all you're gonna do as a producer who loves the film, is focus on how much you love the film, not on how to connect, literally connect with that buyer. You know, you sell in cars, and I gotta admit, I sold cars for two years, when I was in school. somebody walks into the lot, you know, I want to know all about, I want to know everything about so that I can tailor the car, I can tailor the pitch rather, to meet what they need the same thing the buyer walks in, what do you need, I need I need action adventures with cast. Well, great film that you had that might not have a lot of action, it just became a lot more action. And that cast we're looking for I'm gonna focus on the one name that happens to be, even though it might be a small roll. Well, I'm just you know, I'm just giving sure they know how to pitch. And and this is sorry, what got me off on this tangent. I don't even remember now. But but it's just so so important. And a salesman producer knows this.

Alex Ferrari 1:03:15
Right? You know, you were talking about the pitch fest at.

Jonathan Wolf 1:03:19
So it's trying to help. My goal in this in this in this pitch conference is not to make the room full of great pitchers, it's 600 people in the audience. They don't all be great pitchers. My goal is for most of them to open their eyes and saying I shouldn't be doing this. Right. They're not the cinematographer. They're not the set designer. They don't need to be the pitcher. It's for them to realize I'm outside my comfort zone. And the project is at risk. If I'm the one that's going to stay in the deep end, I need to find an expert to connect with. And that's one of the advantages of being at the AFM. It'd be 15 to 1700 producers among the 7000 are there 15 1700 producers in about 30 countries, it's an opportunity to find those producers that can pitch and can sell.

Alex Ferrari 1:04:09
It's very similar to when you're making a movie you you hire a cinematographer, you hire production designer, you hire a writer because they're outside of your comfort zone and I think everyone forgets the the marketing aspect of things and the sales aspect of things and they think they can do it all themselves for some reason.

Jonathan Wolf 1:04:25
I have producers that every year two or three producers will come and take an office at the AFM and say I don't need a sales agent. I'm Sally saving the five to 20% fee and I know my film better than they do and I'm going to sell it myself and invariably they buy ads to do all these things the doors that open no one comes in and and they have a horrible experience and they write to me tell me I don't know how to run a film market after a minute by the conversation we had that I said don't do it. And and it's the same reason we don't see a sign that says for sale by owner on a house. You know, as much as as much as we think Third up doing is opening the door, and then standing around watching TV while people walking around the house, and then I'm paying 5% of them just to stand around on a Sunday? Well, yeah, because there's more to it that you don't see. And, you know, selling a film internationally, most buyers won't buy from a producer. First. And I guess most important is, is they're not sure that the producer can actually affect a full international delivery. Or that it's more than just Texas titles and fill them any tracks. There's a whole lot of stuff, marketing materials, chain of title, all these things, they all have to happen at the same time globally. Hopefully, boy, you know, you buy a film, you find out a cut released in a different country three months earlier, now it's being pirated in your country, you're screwed. So unless they can steal it, you know, real, you know, love real low offer. when when when buyers see something for sale by a producer, they don't know who it is and what it is in their business with them before it's a one off, they just stay away. They don't even take the meetings.

Alex Ferrari 1:06:07
Right! It's more then I've heard that before that they will not. It takes years before they can build relationships, if we're going to the FM every year and they're like, oh, he see he's back. Oh, she's back. Okay, then slowly, but surely, you start building those relationships to the point where like, you have that connection. But generally speaking, they don't.

Jonathan Wolf 1:06:25
And that's because in pre sales seller, the pitcher is saying, you get through the whole pitch, there's one underlying comment, which is, the film is going to be profitable for you. Notice, I didn't say the film is going to be good, the film is going to be profitable. And and that, ultimately, is the promise that every picture is made. When you're a buyer saying I'm in love with the film, then I love with the story. They're in love with the profit potential the film, and and so the pitchers are pitching the profitability of the film, because that's what the b2b pitches. It's not about what you are going to experience, the joy, the crying the laughter, they are pitching profitability. That's and that means the trailer, and the artwork, and everything is based on pitching profitability. That's a totally different marketing campaign, then you go to a consumer, where you're pitching the experience, and and beat it. That's why the b2b sales is very different. And that's why when you get to the, when you get to the producer trying to do their own pitch, they're really pitching and selling the consumer experience. They're not pitching the profitability that the buyer might have.

Alex Ferrari 1:07:38
That I mean, Jonathan, this interview has been eye opening and amazing, and I really appreciate you taking the time out to to drop amazing knowledge bombs on our on the tribe. I have a couple questions I asked all my, my guests if you have if you have some time?

Jonathan Wolf 1:07:54

Alex Ferrari 1:07:55
What advice would you give a filmmaker wanting to break into the business today?

Jonathan Wolf 1:08:01
Well, can you define filmmaker,

Alex Ferrari 1:08:03
director, producer, someone who actually wants to produce a film? So let's say producer,

Jonathan Wolf 1:08:08
Okay, yeah, producer is better than writer, or director. So first of all, there are three kinds of producers. There's a creative producer who really worked with writers and, and develop stories and understands the texture, the script, there's a salesman producer, we talked about a lot. You know, walks the walk, talks to talk knows how to sell anything. Then there's the line producer, who takes the great script and the dough that the sales producers raised and knows how to work with, with, with the unions and the location scouts, and how to get on time and time. So you know, really working backwards in that group. Line producers just need experience. You need to just get on sets start at the bottom work their way up. You know, sales producers, they don't need any advice for me. They're better at it than I am. They they know how to make the connections, they know how to work a room there. They know who the players are. My advice for the floor, the only advice I really have is for the creative producer. Find a sales producer. Find a sales producer, if you're the creative producer and you believe that you can really work well and develop a develop film that's going to resonate with an audience. Then find the sales producer who has faith in working with you. As you develop it and work as a team. Most producers are producing teams. And sometimes they do both. Each one one develops the other pitches, sometimes that one of them has a better idea of how to work the pitch than the other. But I would say fine, fine teams. One of the problems of creative producers have it's similar to writers First of all, a lot of creative producers. Let's face it a writers producer so they could sell their script. Compared to music, if you're a drummer and say, Oh, I want to be in a band. Well, I need someone plays bass and where do I find these people? I'm just sitting at home in my garage with my drums. You Get out there, you start meeting people, you go to clubs, you do gigs, you see gigs, and you start to find people that you can start to create relationships with writers are terrible at this. There used to be sitting alone, you know, a drummer needs a band, they need everybody else, you just can't put a headset on, listen to other people's music, play along with it, you need other people. So you're really into that collaborative process. writers are used to sitting alone with a door shut and their thoughts. And, and they really struggle at the process of networking connecting. So all I can really say is when you're not writing, it better be building relationships. And it isn't always with Let me tell you about the film that I've got, you know, it's it's building relationships, building trust, finding the producer, who can who can sell.

Alex Ferrari 1:10:46
And can you tell me the book that had the biggest impact on your life or career?

Jonathan Wolf 1:10:53
Well, you know, I don't read enough. But it was a book in political science in college, called the irony of democracy,

Alex Ferrari 1:11:04

Jonathan Wolf 1:11:06
And the theory or the theme of that book was that in all democracies, you have political institutions, you have hierarchies, whether they're their government institutions, non government organizations, and everything that ultimately have people at the top who are elites. And theory, this book was, elites have more in common with other elites even have opposing views than they do with the people who they represent. And that the irony of the democracy is that it's those elites that work in concert with others, not always to the benefit of those they represent. And so too long time ago, and I haven't thought about it many years, but I got a book that, that that stuck with me. That's it, it's probably Long, long out of print. It's a college textbook.

Alex Ferrari 1:12:02
Great, great, great book sounds like a great book. And then what lesson took you the longest to learn whether in your industry, or in life?

Jonathan Wolf 1:12:15
Every day, I realized I know less. When I, you know, when I got out of school, I knew everything. I know less, and tomorrow, I'm going to discover I know even less.

Alex Ferrari 1:12:29
Jonathan, thank you so much for taking the time out to talk to the tribe and myself. So and it's again been an absolute pleasure having you on the show,

Jonathan Wolf 1:12:36
Happy to do and really enjoyed the discussion.

Alex Ferrari 1:12:39
Well, I know a lot more about AFM than I did before this interview for without question, and I want to thank Jonathan again for being on the show and, and being so candid about the entire process of AFM and how to really sell a movie what what buyers are looking for, and I feel it again. So many times filmmakers forget that this is a business. As my friend Suzanne Lyons says the word there show when there's business and the word business has twice as many letters as the word show for a reason. You know, it is so important to understand how to make a movie but is that as equally important on how to sell a movie and actually make money and to maintain a sustainable career as a filmmaker and as a film producer or writer or director. Now I know of a few tribe members who are going to be at AFM, I'm going to be there on November 1, I'm going to be walking around, if you guys are going to be there and love to catch a drink, get together, I'll be there most of the day of flying around and going to events and things like that. So please reach out to me, let me know if you guys are going to be there. We can meet in the lobby, we can hang out, we could do some stuff. It'll be a lot of fun. And if you guys are interested in going it is on November 1 through the eighth in Santa Monica, you can still get passes, you can still get tickets to go. And definitely if you are in the Los Angeles area or can get here. And you want to learn how to sell your movie and see how movies are really sold. I highly suggest you guys attend. Because it's definitely a amazing educational experience for all filmmakers. Whether you're going to self distribute or not self distribute, you should know how others are making money selling their movies. Now I'll put links to everything we spoke about in the episode at indiefilmhustle.com /192 in the show notes, and if you guys haven't already, please head over to our YouTube channel. It is blowing up we are getting close to 10,000 subscribers, which I know in the grand scope of YouTube is not that big. But for us. That's pretty big. And I'm really excited. And it's growing very fast, especially with our new shows that we have going on the director series and the indie film, hustle film school as well as replays of the podcast and I've got some big stuff coming up in January. And actually, since I want to take this moment to see if you guys can help. I've got a show idea that I want to do for the channel. And it's called, ask Alex. I've done a few of those on the podcast, but I'm actually going to create a YouTube show where I'm going to answer one question from the tribe every day for 30 days in January. So we're going to, I'm going to release them every day in January. And I need questions. Any questions from you guys? So what I want to do is get your questions, your name will be read out on the show, and I'll also put up your your Twitter handle, as well. So you can get a little bit of press and little bit push on your stuff as well. And I want questions about everything in the film industry. What your your what your questions are about what's going on in the business? Should I go to film school? Should I not go to film school? How should I make this? How should I do that? Anything you want, I will be an open book and try to help you as much as humanly possible. So it's an experiment, guys, I'm going to do this for 30 days. And if it's a if it's a big experiment and works well, and people really seem to like it, it might be something I'll do a more continuous show on. But that's the plan. And I am hopefully going to be going as well to Sundance this year. Again, I'm going to be doing a special series of interviews like we did last year, maybe a little bit different, a little bit bigger. We're going to see what we can do. I'm going to create a lot more content coming in from Sundance as well this year. So I'm hoping I'm still trying to figure it all out. I'm hoping I'll be able to do that as well. So for your questions, please email [email protected] That's [email protected] Now I will be selecting 30 questions for the show. So hopefully your question will get in and if it doesn't get in, don't worry. I'm going to do my best to answer those questions. in later episodes of the podcast. Maybe later episodes of the Ask Alec show on YouTube. We'll see. So thank you guys for listening. I hope you got a lot out of this episode. And as always keep that also going keep that dream alive and I'll talk to you soon.