Netflix 101, a Dispatch from IFP's Filmmaker Conference

In Chris Anderson’s popular new book "The Long Tail," about "the new economics of culture and commerce," the Wired magazine editor-in-chief explores, "Why the future of business is selling less of more." That is, how a number of businesses that make their money selling culture (music, movies, books) make an increasing amount of revenue not from the high-profile hits, but from increasingly popular niche content. Considering Anderson’s writing, both in the book and on his popular blog of the same name, offered a useful way to consider some of the issues and trends explored at this week’s Independent Feature Project conference in New York City.

[Editor’s note: This article appeared originally in indieWIRE on Sept. 20, 2006]

Re-branded as the Filmmaker Conference, IFP’s annual weeklong series of panel discussions at the IFP Market has included a number of insightful sessions exploring the business of film, including a number of discussions revolving around changes in production and distribution. Daily themes including deals, new technologies and making that first feature gave the event an umbrella for each day’s session, with Thursday set aside for an all-day look at documentary and reality TV.

Monday’s Netflix 101 session (which I moderated), included the company chief content officer Ted Sarandos, joined by new head of acquisition and distribution Liesl Copland (formerly of Cinetic), as well as filmmakers Laurie Collyer ("Sherrybaby" and "Nuyorican Dream") and Michael Skolnik ("The King of All Nations" and "On The Outs") and producer Jeb Brody ("Sherrybaby" and "Little Miss Sunshine"). Through its growing Red Envelope Entertainment label, the company has become an important outfit to watch, particularly after Sarandos (reflecting on his company’s deal for a dozen movies at Sundance) was quoted in a Wired article explaining, "Eventually we’ll be coming to Sundance and saying, ‘We can buy everything’. There’s a deal for every film."

The definition of "niche" can get blurred on a website that offers movie rentals of some 65,000 titles, 95 percent of which are chosen by subscribers at least once each quarter. Sarandos added that the site would be at 100,000 titles in the coming years, at which point it may just pick and choose from the 3,000 features submitted to a festival like Sundance. The more options offered to Netflix’s more than 5 million members, the more movies they seem to consume. This "paradise of choice" (on sites like Netflix for movies, iTunes for music, or Amazon for books) as Wired’s Anderson calls it, can make a small movie into a niche hit. Sarandos offered the recent "Born Into Brothels" as a prime example; it was rented some 600,000 times. Through software that carefully predicts and promotes movies to subscribers based on their rankings of other films on the site, Netflix is able to make subscribers aware of movies they might be interested in, and when the company has a film in theatrical release (such as "Sherrybaby" or "The Puffy Chair") they have a targeted way to market it.

Driven at times by blogs, and friends made via any number of online social networks (like MySpace, Friendster, indieLOOP, etc), viewers and filmmakers alike are finding the Internet to be an incredibly valuable way to network, promote and even sell one’s work. During Wednesday’s discussion about online social networking and its increased role in film marketing and awareness, a five person panel ranging from Netscape and Cinematical’s Karina Longworth, blogger Stu VanAirsdale ("The Reeler"), Ingrid Kopp of networking site Shooting People and David Dinerstein from the new iklipz.com site, were guided through a discussion by moderator Brian Clark of GMD Studios and indieWIRE.

While the group seemed to collectively agree that networking outlets such as the behemoth MySpace.com were key ingredients for any filmmaker’s strategy to market and generally spread the word, the perception of its value varied by panelist. Dinerstein, former co-head of Paramount Classics, argued that while MySpace provided a lot of views, the industry — which he argued is the audience many filmmakers hope to attract — won’t generally view the popular site, and then he touted his iklipz (a sort of combination of MySpace combined with YouTube) as one frequented by insiders. Meanwhile, Netscape’s Karina Longworth probably had the most surprising quote of the hour-long session, saying she believed the peak of online social networking had passed. "I’m waiting for the kids to tell me what’s the newest thing," she noted.

Kopp from Shooting People seemed to offer a compromise solution on how to approach online outlets for social networking. "Of all the panels I’ve attended this year (at the IFP Market), I’ve found that it’s necessary to have a hybrid approach," she explained, "It’s crazy to think that just one site is going to be the answer. You have to be clever in your approach, and make sure [all your] bases are covered."

Mining web tools as a way to jumpstart a young career was a topic during Tuesday’s morning keynote conversation between Filmmaker Magazine editor Scott Macaulay and agent Micah Green from CAA, the talent agency that has signed the creators of the recent LonelyGirl15 web hoax that featured a seemingly authentic teen girl’s confessions via a bedroom webcam (housed on the YouTube & MySpace websites). Green explained that when it works, such a move is far more economical (and rapid) way to gain attention in Hollywood than relying on the often-expensive route of making a feature and taking it the film fest route.

When asked about the current marketplace for new features, Green emphasized the current trend of high-concept horror and comedy films scoring the bigger deals at most festivals of late. In such a market, even well made features can face tough times, but creative distribution solutions can yield positive results. During Monday’s "Indie Films Now" session, moderated by Colin Brown of Screen International, panelists Bob Berney from Picturehouse, Evan Shapiro from IFC TV and Ted Mundorff from Landmark Theaters contemplated the future of theatrical distribution. Among the new models worth watching, Berney explained, is the strategy being implemented by Yari Film Group to release Neil Burger’s "The Illusionist." After a Sundance debut that lead to few offers, financier Bob Yari backed the P & A costs of distribution and worked with Freestyle Releasing and the aforementined David Dinerstein to execute the release. The film, slowly expanding into more and more theaters, has already earned nearly $25 million after a month in release. Monitoring the success of the movie, Berney noted that he expects to see even more equity investors put money into marketing and distributing films themselves, as a viable alternative. "They may do one and realize it’s not (a good idea), but there will be a lot of that," Berney added.

After the Berney/Shapiro/Mundorff session, I popped into the green room where a group of filmmakers were talking about their own alternative distribution options. Capping a day of sessions devoted to DIY distribution, "Four Eyed Monsters" makers Susan Buice & Arin Crumley and "Head Trauma" director Lance Weiler were comparing notes on releasing their movies on their own and considering how they might create alliances between indie theaters to support smaller movies, while also pondering the best way to structure DVD distribution in relation to a DIY theatrical release. Listening to the filmmakers explore how the might lay the foundation for an alternative system that would benefit smaller movies by indie filmmakers, I couldn’t help but recall the words of a panelist earlier in the day.

"The monolithic gate keeping model will break down."

(Reprinted with permission, copyright Eugene Hernandez, indieWIRE 2006.
indieWIRE’s Associate Editor Brian Brooks contributed to this report.)