“Numbers don’t lie” is the adage of business. This also applies to the film industry, with box office figures—posted on websites such as BoxOfficeMojo, Rotten Tomatoes and IMDB—often used as a gauge of a film’s success or failure. But the landscape of film distribution has changed dramatically in the past five years, and as audiences increasingly watch films on other platforms from the comfort of their own homes, box office figures no longer reflect an accurate, let alone complete, picture. Yet, surprisingly, in this age of information and readily available statistics, there’s a paucity of data on other such revenue streams.
Thus began The Transparency Project, an initiative spearheaded by the Sundance Institute, in partnership with Cinereach, and in collaboration with the IDA (among many others, including IFP, ITVS, POV, BRITDOC, Tribeca Film Institute, PGA and WGA) with the aim of helping filmmakers by analyzing independent films’ financial data.
Documentary spoke via telephone in May to Chris Horton, director of artist services at the Sundance Institute; Paul Mezey, producer-in-residence at Cinereach; and Brian Newman, founder and principal at SubGenre, and the lead consultant on the project.
Documentary: Tell me about the genesis of this project. Where did the idea originate, and how did you get involved?
Paul Mezey: The genesis actually came from the subject of access to data. It has become imperative for filmmakers, including producers and financiers, to have a much better handle on what's happening in the marketplace with new modes of distribution. But the big barrier is always that nobody knows the numbers. Films are still being value-based on this antiquated notion that the box office is the real source of revenue, and somehow traditional box office is the predictor of all other revenues. We know that's not necessarily the case for every film, and that a lot of audiences are being tapped on other platforms, but the data's not available. Nobody really knows how well films are performing on new digital outlets.
I think everyone was recognizing that there was a challenge of access to data, access to hard numbers, as the way we're evaluating films wasn't adequate. We weren't actually using numbers that were as relevant anymore. So it's very hard to understand where to put your resources, how to market and distribute a film, where your audience is actually coming from, and what that means financially in terms of how much a film should cost.
I think it was 2013, at the Sundance Producers' Conference, where there was sort of an epiphany; we were all sitting around the table complaining about not having information, and said, "We're all filmmakers. We all actually have a lot of data individually. What if we pool all of the information we do have? Instead of complaining about lack of transparency and lack of access to data, let's start sharing all of the data among ourselves.” And then we started brainstorming: “If we had an aggregate of all our data, and if we kept it anonymous, we're not breaking any non-disclosure agreements and we're not exposing business practices, but we're getting the value of all this collective data.” And so that sort of ballooned into the idea of The Transparency Project, advocating for filmmakers and producers to share their data in a safe and anonymous way.
Brian Newman: Chris and Paul called me when I was at IDFA two years ago and told me about the project. They knew I had talked a bit about this issue myself in some blog posts and panels. We started with a month pilot project in November 2013, just reaching out to a few films to figure out what we could find. We started realizing we could get some data, but it was not easy, and we decided to really go into the project in earnest.
It’s no secret that digital revenues, in particular VOD, are starting to become as important and sometimes more important for films than theatrical releases. And for documentaries, in particular, broadcast license fees have always been more important than theatrical, but all those things are kind of hidden. As we started digging into it, we realized it wasn't just digital and broadcast fees, but also festival screening and speaking engagement fees, as well as all those other things that go into the life of a film, were hidden.
We definitely aren't saying that money is the only thing that matters. Sundance and Cinereach support films for art's sake, but it's also just that for a lot of these films, people are trying to make back the money and sometimes make back investments, and it just seemed ridiculous that all these numbers are completely hidden when we know they're proof of the financial success of the film.
Chris Horton: I think from Sundance's perspective, it's important for us to convey that we realize there are far more important aspects for our artists to focus on besides financial performance. We definitely don't want to overshadow the fact that there are bold, risk-taking artists out there getting their work made and seen. How much a film makes on cable or VOD is not what defines that movie. But we're in the business of storytelling here at Sundance, and we realized that data can tell us a story, too. And data in aggregate, across a very diverse range of films, is going to give a lot of insights to filmmakers in this rapidly changing, somewhat scary climate. It can give them some tools that are going to be able to make their careers better, and make their decisions about how they choose to release their film more effectively and more efficiently.
One of the purposes for us to do this was to take the first ever, forensic deep dive into what the numbers actually are. You hear a lot of people say, "Well, you'll make your money on digital." That may be true, but we don't know. There are a lot of assumptions that may be mistaken. What we wanted to do was get enough films that have been released recently that can give us a good sense of what is actually happening out there.
D: It's sort of revolutionary to have such openness and clarity in filmmaking. Was there any resistance to the idea from distributors?
CH: Surprisingly not. A lot of distributors were really open to the idea. You might think that embarking on a project like this, you'd get some old-guard distributors saying, "Over my dead body," but that was not the case. In fact, if you go to the website, you'll see a list of brand-name distributors that have openly endorsed this project.
That is encouraging because this project is only going to succeed if we get the full support of the industry—which means filmmakers, producers, nonprofits and certainly distributors. So their buy-in for this project, both spiritually and conceptually, and hopefully, through sharing of data, is going to be what makes this project succeed.
I think that a lot of the distributors—especially those who've been in business for quite a while—can see the writing on the wall, and can see that millennial filmmakers and producers want to have immediate access to data. Unfortunately, they don't have the resources or infrastructure to build and maintain a state-of-the-art database that can provide that data in real time, and I think that a lot of distributors are eager to evolve with the changing times.
BN: Distributors want more people to understand what's really happening in the marketplace. They're hoping to show how they are outperforming the average in the field, when they're doing really well. It also brings to light, in particular for documentaries, the importance of the areas that are sometimes overlooked, like educational and community screenings. So it helps them build a case for how they do a good job there.
And the last piece is that dashboards for data are becoming the norm. So whether you're raising money from Kickstarter or selling your film through VHX, or any of these kind of digital platforms, you've got very robust data that you can look at for how your film's performing.
D: Let’s talk about anonymity and the importance of it to data mining.
PM: We thought anonymity was really important for us to get buy-in, and to move away from the story of a particular success or failure of one film.
We’re looking at the landscape overall, and at medians, which are aggregates of similar types of films. Because in the past, when looking at compatible films, an outlier was always used. We thought it would be better if we had sets of data of 10 or 15 films with a fairly similar profile. That's a much more accurate data set than just looking at the outlier. So we've actually created a system in which the identifying information is stripped out. A very important part of our database is that you can't go in and find out about a distributor's particular deal points, nor identify a film by name. We're trying to be very sensitive to protecting proprietary information.
D: How many filmmakers have responded to the call?
BN: We reached out to over 400 filmmakers. And we now have over 200 who have pledged to submit their data. And I'd say roughly half of those have now given detailed data.
CH: We've gotten a high percentage of filmmakers who not only endorsed the idea of the project, but want to participate. But that doesn't exactly mean they say yes, and that within four seconds, you’ll get an e-mail with every data set cleanly and uniquely in our inbox; it doesn't work that way.
One of the things we wanted to do with this project was look at the field as a whole. We didn't want to only look at the movies that premiere at the Sundance Film Festival, for example. We wanted to look at the big range of the types of movies that Sundance supports, that IFP supports, that Cinereach supports, that are the types of independent films, broadly speaking, that get made and, hopefully, seen.
We want to look at a representative sample of the types of movies in the independent sector that are getting made so that we can arrive at it as a truer gauge of how the business is doing, what filmmakers can expect, how they can take that information to be better about making their work or to pitch their investors with real figures, rather than speculation.
D: Of the respondents, how many have been documentary filmmakers?
BN: It's almost 50-50 right now. We've been trying to keep a mix between docs and narratives. Then within each of those sub-categories, we're trying to keep a good balance among different types of documentaries—social-issue doc, rock doc, investigative doc. We are also trying to keep a good mix among all the projects between lower budget and higher budget. In our outreach, we're mainly looking at projects that have come out into the marketplace in some fashion. So we're not looking at every film. Over 50,000 films are submitted to festivals globally every year. We're not trying to capture all of those movies; we're trying to capture the ones that are getting some kind of distribution. Whether that's self-distribution, or getting bought by a distributor, they have come out in the marketplace in some way.
D: Where are you now in the project?
CH: We've been in this busy phase of collecting data on the one hand, and then building the tool to capture it and display it on the other.
BN: We are launching the beta to a small group of industry at the Cannes Film Festival, and hoping to launch it more publicly after the summer.
It started as a very time-consuming process, and that's part of the things we've been simplifying as well. Filmmakers fill out a very short survey that gives us data that is not even on their distributor's reports: things like their budget, whether they did crowd-funding campaigns, e-mail list followers... And then they're either sharing their reports directly with us or giving us permission to approach their distributor to get reports. We then gather the data and enter it ourselves. We have a team of five, and at any given moment, three that are actually doing data entry and the others working on the data entry system because we keep refining it. It's also taken a long time to build. No one's ever built this before, so we had to make it user-friendly.
D: What has been the biggest challenge in launching this project take?
CH: The data collection is one of the biggest challenges.
BN: The next problem we encountered was the lack of standardization, so it's taken five of us—plus some data scientists—months to make maps of how everything correlates, because every single distributor reports every single data point differently for filmmakers.
CH: If you read some of the reports on IndieWire, you see certain distributors reveal their numbers, showing films that have been pretty successful. But what does "It made X on VOD" mean? Is that gross? Net? From digital? Cable? There's a lot of complexity in there that doesn't tell the full picture.
It becomes very complex and there's a lot of nuance that has to go into how the data gets entered, so we're comparing apples to apples—and that's a challenge. One of the goals we have for this project is to help create standardization for how we're defining these terms.
D: How would a filmmaker use this data to do a crowdfunding campaign, draw up a budget, have a distribution strategy and negotiate contracts?
CH: Our goal in this project is not to say, "Hey, here's what this one film did on this one specific platform," but rather, "Here's how independent films are doing generally," so that we can give filmmakers as many tools and insights as possible, given that they have to be more creative and more effective and efficient in getting their work seen.
BN: Our hope is that first-time filmmakers could go in and set the parameters of the type of film they're thinking of making. They could play around with different variables and pitch to an investor or a grant funder with, "This is why my film might perform well based on the data that we're finding in the marketplace."
We're starting to learn that it's going to be useful in ways we haven't thought of. For example, the IFP Festival Forum is very interested in getting involved because they're hoping to provide data that shows not just festival screening fees, but also butts in seats, and how many people were seeing films at festivals so they can make a better case for importance of festivals and a release strategy.
PM: If we know how films are actually performing in the marketplace—where they are doing well, where audiences are actually going to see the films—that allows us to have real insight in terms of “How do I plan my film? What sort of distribution should I be prioritizing? Where should I actually spend money on this movie? Does the theatrical release for this particular film make a lot of sense? Or is 90 percent of the viewership coming on VOD?” Being able to have information can really empower you to make smart choices.
Then I'm being responsible as a filmmaker, as I go to investors and I'm raising money. I'm showing I can really model out a potential revenue structure for that movie as well. I can actually design a plan from the beginning, instead of waiting around for the distributor to buy my film—like having a digital release soon after my festival premiere and then going on tour. So all the publicity I got at the festival I'm going to parlay into a screening tour.
A lot of times, people didn't really think about the marketplace, and then it all comes crashing down at the festival if they don't get picked up by a distributor. Then it feels like you're in triage mode. It shouldn't be that way. If you're making a powerful film, there's an audience for it.
We want to come up with tailored strategies for individual films; they don't have to necessarily fit into a certain box in order to be viable, because audiences are hungry for a wide range of films. They're just maybe consuming them in different ways. If we can really understand the mechanics of how the marketplace works, we're empowered to actually make much more diverse types of films.
D: What story does the data obtained and collated to date tell?
BN: We’re still in beta, so we're not releasing any figures at this time. All I can tell you is that we're learning that other revenue streams are important to the life of the film, that it's not just about theatrical, it's not just about digital. Especially for documentaries, it's about the mix of what you get from digital platforms, broadcast, festivals and community screenings.
CH: One of the things that we're going to see is that there is not a one-size-fits-all model. I think we're going to see that different films have different outcomes of success. Over time, that's going to evolve and change. The iTunes movie store launched in 2007, and look at where we are right now. One of the things I'm hoping filmmakers get out of it is that there are even more untraditional ways of connecting with their audiences, such as semi-theatrical venues, educational distribution and even festivals, as revenue sources.
BN: There's also a lot of unknown, unquantifiable stuff, like a topic that was in the zeitgeist at the moment or a really good PR person who got them great press for their film. So there are going to be films that can outperform the data.
Essentially, it's not a rule book. We're not saying every film's going to perform this way. We're saying, “These are the trends we're seeing; these types of movies made this range of income from these different platforms.”
PM: Information is king. And it's not giving you one answer. It's giving you a lay of the landscape. We're seeing that there's a lot of revenue being made in semi-theatrical one-off screenings in touring that's not reported anywhere. A lot of independent films, and particularly documentaries, are making a substantial amount of revenue in this sort of semi-theatrical, one-off screening space that's not your traditional theatrical release.
The biggest story it says is that there are different ways to measure success. Every film is different and there's not one path. Box office alone—the one reported number that everyone gets—is not necessarily an indication of financial success for a movie, particularly for independent films. There's a lot of revenue actually being generated on other platforms; sometimes that correlates to theatrical and sometimes it doesn't.
There's a lot of new technology that's affecting how films are being consumed. But the truth is, there are many more hours and minutes of storytelling being consumed at any time in human history. I think all of us understanding the marketplace better—from filmmakers to distributors—are going to create a much healthier system overall,