Saturday Nov. 5, 2011, 4 PM
"How to Work the AFM"
by Johnathan Wolf, Executive VP and Managing Director, AFM
notes by B. Hahne
The original blog location of these notes is: http://2011afm.blogspot.com
Clarifications or pithy comments by the note-taker will generally appear in [square brackets like this].
These notes are copyright (c) 2011 by Bruce Hahne. Noncommercial, nonprofit redistribution and/or pointing people to the blog is permitted and encouraged.
Disclaimers: "Free notes, you get what you pay for!" There notes are a summary, not a transcript, and represent my best effort to capture the talk plus Q&A. They also probably contain errors. I'm not in the film industry, nor am I affiliated with AFM / American Film Market or with any of the firms associated with the panelists.
[This is an intro talk given every year for newcomers to the AFM show. See also the official written variation, not by Bruce, at www.americanfilmmarket.com/attendee/first-time-attendees However, this spoken talk by the head of the AFM has much more information than the web page.]
About the IFTA: the IFTA produces AFM. We're for independents. How do we define "independent"? Our definition is: "51%+ of the risk is taken by someone other than one of the big 7 studios." The budget isn't relevant. Lord of the Rings was an indep. Twilight is an indep.
IFTA: we're international, not [just] domestic US. IFTA is just for distributors, not producers. IFTA has about 33 employees and 6 of them are staff attorneys. The average film can have 75 to 120 legal licenses. We work to standardize licenses so that people don't have to write contracts from scratch - you start with our stuff and modify. Compare the California Realtors Association - it's similar, they have stock documents available for their members for selling real estate.
We have the IFTA "model license agreements" - we estimate those are used 50K to 100K times per year. Licensing is complex, e.g. what does "I want to license this for all French-speaking audiences" mean?
We also run an arbitration program which is used ~130x/year, so about twice per week on average.
We have a research department. We can tell you the blu-ray penetration in Argentina. We can give you all box office receipts, not just for the big movies, for ALL movies, in all countries in multiple currencies, local and dollars.
Now let's talk about the AFM. The AFM is a trade show. Sellers have booths [these are mostly offices, actually, but whatever.] Buyers visit the booths. We use a hotel rather than a convention center due to sound bleed - we like walls, because sellers are showing their films in their [rented] offices on-site and that doesn't work in a convention center.
Film is perishable - you want to move product quickly once it's complete. So this is an appointment-based show. Most people here have set their appointment calendars weeks in advance [for this show]. We estimate that ~$800M in business will be transacted here, at this convention, right now. About 50% of that spend will be for films not yet in production.
Are there any buyers here in the audience? [Only 3 hands out of audience of 150. Oops. Maybe they're all in their booths since they know what they're doing and don't need to attend the newbie training!]
OK, let's talk about producers. I break down producers into three main roles, very different:
1. The creative producer. This person works to nurture the writer, locks him/her in a room until the script is done, works on story elements. The creative producer's focus is to generate a great CREATIVE PRODUCT.
2. The sales producer. This person pitches the movie, sells the movie. This is a hard job, not that many people are good at it, and they might get paidmore.
3. The line producer: good with budgets, execution, make it happen, work with the unions, etc. This producer takes the completed script and gets the budget and herds the cats and produces a finished film [which is presumably not yet sold].
Now the thing is, good producers are usually experts at ONE of these three roles and then they know how to assemble a TEAM OF PEOPLE to do the rest. You can't do it all yourself, the theory of skill transferability does NOT hold, you can't do all three of these just because you happen to be good at one of them.
So, at this morning's pitch conference, what we saw were a lot of CREATIVE producers trying to act like SALES producers. It didn't work well. [I.e. most of those people sucked at pitching... yes, it was true.] Sales is hard.
At the AFM: you can sell both finished film, and unfinished film.
By contrast, there are thousands of film FESTIVALS worldwide each year. Festivals have curation. They are for people who like to see movies.
There are only 4 film markets worldwide, i.e. trade shows like this one. There is no curation here - you can bring whatever you want. These four film markets are:
1. AFM [you are here]
2. Berlin, held at the same time as the Berlin film FESTIVAL, so easy to get confusd.
3. Cannes, held at the same time as the Cannes film FESTIVAL, so again easy to get confused.
4. Hong Kong Film Market [FILMART]
Sundance is special, that was created for the benefit of the film industry, not film audiences, but they're an outlier case. If you live near Sundance, you get OUT of town when Sundance comes to town, nobody who lives there wants to be there when Sundance happens.
For success at AFM: you do your homework and come to do presales, knowing that you need a specific presales percentage of certain countries. And you try to get that percentage, and if you get it, then typically you get to greenlight your film.
Presales is about RISK TRANSFER. Presales transfers risk to the buyer - they give you money up front hoping for a good product. Many sales companies (sellers) here are risk-averse [so they want to do lots of presales]. Other companies want a larger upside [so they won't presell as much.]
Now, about presales of a film. Ask yourself, which is easier to presell?
1. A Jean-Claude Van Damme film, 5th in a continuing series, with a known, reachable audience that has already purchased the first 4 films.
2. Or, the script to Brokeback Mountain.
The obvious answer is that the former is easier to presell. The risks are well understood. You know how much money that 5th movie is going to make.
Dramas are hard to presell.
Talky comedies are hard to presell. Pratfall comedies are easier to presell.
This problem of risk is why we see a strong "stick to the genre" approach. [It's also worth noting that in the pitch conference Saturday morning, one of the early ground rules that the panelists gave was that you must state your film's genre up front when pitching. The buyer wants to know the genre. Frustrating but apparently true.]
Q: Can you presell a story only, without a lot attached, no stars, no director yet?
A: If it's 3D and CGI and has monsters, maybe. But really I'm not the expert, you should go ask the 400 exhibitors upstairs [in the rental offices in the Loews conference hotel].
BTW, 70% of revenue on U.S. pictures is from non-US sources these days, so you need to know where your audience is.
Indep film producers are at a disadvantage compared to the studios, because the media often won't cover films without a release date. You call them and they say "when is it coming out?" and you say "we don't know, we don't have a distributor yet!" and the reporter says "well, call us when you have a release date."
There are 1500 buyers here from ~70 countries. The sellers are here to do an auction process with their films, effectively auction them to the buyers.
About film festivals: the WORST thing you can do with a finished independent film is to put it into a festival. [Bruce says: this is a hardline approach compared to the positions taken by the various "how to distribute your independent film" books I've been looking at. I think most indep film producers would still say that festivals can/might have a legitimate role in the distribution strategy for a film. However there are definitely a lot of bad stories about films that went to festivals to die.]
Why is it bad to do festivals? You put it in the festival. This triggers reviews, you get reviewed. The reviews go onto the internet. They are now global reviews. You don't control the audience. You don't even know if there are ANY buyers in the audience. You often don't even know what time of day or when your film will show at the festival.
Here is what to do instead of festivals: Set up a 10 AM or 3 PM acquisitions screening in Los Angeles, New York, and maybe in London. Not at 7 PM, you put it at 10 AM or 3 PM during the work day, this is business for the acquisitions people, remember. You want an auction-like environment. Invite the right acquisitions people to your event.
Don't send a DVD or screeners. "Never do this". [It was mentioned in one of the panels that when the distribution guy says "send me a DVD", he's telling you what's convenient for HIM, not what's best for you to sell your movie.] Even if you send them a Blu-ray, often the resolution is only SD, which is 2 levels worse than what buyers are going to see if you show the film in an actual screening room / theater. With DVDs you don't own the event - the guy is putting it into his DVD player at home and maybe he's surrounded by screaming kids, you don't have his attention. DVDs say "my film doesn't matter", and "buzz" only lasts a week.
If your acquisitions screening efforts don't work THEN you might try festivals. But more pictures die at Sundance than find distribution at Sundance.
Q: What about the AFI film festival which is hitched to AFM? [It's true, there's a mini-festival, but I think it's separate from AFM, run by separate people, not IFTA.]
A: Sometimes festivals work, but not often. Note also, that if your film is a showcase piece to show off the SKILLS of a director, that's a different story - in that case you're not chasing money, you have different desired outcomes.
Only 500 English-language films get made each year. [Really that low?] But thousands of scripts get written each year.
I asked a director: "who are you making this film for". The director said "for me, obviously". If the director says this, RUN. You need to know your target demographic - it impacts everything. You need to be thinking about ratings: G, PG13, R [i.e. if you're targeting a certain demographic then you need to target the right rating.]
People ask me: why not just sell my film internationally myself? Why do I need a sales agent? The answer is that buyers can't buy one of every film. Most producers know nothing about international deliverables requirements. It's nasty [putting all the deliverables together]. When buyers see producers selling their own films, they think "well, this will probably be a headache" and so they're going to make you a low offer to compensate for the headache.
We get [film] producers here [at AFM] every year who buy office space with us [in the hotel, i.e. they get one of the official AFM temporary offices], and I call them and ask, "do you really want to do this? You shouldn't do this", and inevitably they assure me that they know what they're doing. And then within 2 weeks after AFM I always get multiple angry emails about how much AFM sucks because they bought this rental office and nobody came to buy their film. The buyers are blocking out their meeting calendars weeks in advance - they're not going to walk into your rental office door just because you got an office and opened the door.
About pitching and what names to drop:
- If somebody is "attached" to a project, it's OK to talk about that. Somebody has made a commitment, they are "attached".
- If somebody is "interested" in your project, that's irrelevant, don't talk about it, who cares.
Q: I have a script, not a film, how do I sell just my SCRIPT? [Another in a series of starving artists who are probably at the wrong convention, wrong place.]
A: Many of the sales companies here [in the rental offices] do get involved in some level of funding or preparation. Some will even work with writers. Some are pure production companies - Lions Gate does read scripts, but they don't do that here at AFM, that's a completely different process, reading scripts. Many firms are here only to look for films in a package ready to sell. That's what they do, they buy film packages and sell [distribute] them. [There's some potential terminology confusion here, in the sense that "buyers" at AFM later turn around and become "sellers" or "distributors" of that same film within their local international markets. More on the meanings of words is coming up later, please stand by.]
Q: We have a film entering postproduction, it's a 4.5 hour pseudo-documentary, what should we do?
A: AFM is about long-form content, though that content isn't always aimed at theaters. BTW, you need to know your target medium - is it TV, cinema, something else? If you're filming a TV project and you show it in ONE theater somewhere, that can trigger all kinds of residuals payments - it's a big mess.
Q: Do you have any advice for TV [productions]?
A: Long-form content, or a series?
Q: It's a series.
A: That doesn't happen here at AFM [you're in the wrong place].
Q: Is there a directory of buyers?
A: Well, not one that I'll share with you. [ha, i.e. I'm not going to put my rolodex up for public view]
Q: I want to sell into Europe. A documentary. Can I sell this on my own?
A: What does a documentary sell for in Italy at prime-time rates?
A: That's my point. The sales people upstairs KNOW the answer to that question, and you should work with them.
To check out people, in this business you can check everybody's references. Go into the sales agent's office, look at the 7 movie posters on the wall, then call the producers of those 7 films and find out what their experience was working with that sales agent. [There's your background check.]
Q: How do we know normal seller's agent fees?
A: I'll give you the broadest range: 5% to 25%. And it's a HIGHER percentage for films with SMALLER budgets.
Q: About language, you said "sales rep" and you said "distributor", I'm confused.
A: OK, what I call a "buyer" is called a "distributor" in their home country. They might sell or distribute DVDs, or they own a TV network, or whatever. Here at AFM I use the words "distributor" and "sales agent" interchangeably - I might say "we have 400 distributors upstairs [in the hotel in rental offices.]"
[Bruce's attempt to make a simplified movie-chart:
Filmmaker / producer ----> Distributor aka sales agent aka seller ----> buyer aka "distributor" in buyer's home country ----> End consumer/viewer of the movie.]
[At AFM, the "sellers" come typically with a set of films packaged and ready to sell. The sellers rent office space; the buyers -- who are called "distributors" when they step off the plane in their home country -- do not. The buyers run around to all of the rented hotel offices following their appointment calendars set up weeks in advance, and they make offers on the film packages.]
Q: How can I get in front of Weinstein group here to sell them my movie?
A: You won't. Their production people aren't even here. Weinstein Group is here to SELL product, not to buy product.
Q: What keywords do I look for if I'm trying to sell my movie?
A: "Acquisitions" is usually about finished or nearly-finished products [that's what "director of acquisitions" would mean]. "Development" is usually involved much earlier in the production process.
Q: I'm here to find a sales JOB. Any advice?
A: Um... I could make some pithy comment about how you might want to find some other career. Part of it is about your background.
Q: How about people selling [film] product here, who don't have a room [office], is that productive?
A: That's sort of like selling a home from a park bench. You're not going to sit in the hotel lobby and get acquisitions people to listen to you. This situation happens with producers who took half of my advice when I told them "don't get an office here, it won't work for you", and they take me literally and they don't get an OFFICE here but they still try to SELL THEIR FILM here at AFM, without an office. [Doesn't work.]
Q: I'm looking for projects to fund, how can I find good projects without visiting every booth [office] here on all 8 floors of the hotel?
A: You're looking to fund projects? OK, we'll take a 10-minute break and let everybody here swarm this guy. [ha]. You should write down the 5 things that you MUST have for projects that you want, write them down on one sheet of paper, give that sheet plus your business card to every seller here [in the offices], then you're done. That will take you one day, then spend the rest of the days at the beach.
Fundamentally, here is the thing: We have an industry filled with ARTISTS WHO CAN'T AFFORD THEIR CANVAS. This generates passion, both good passion and bad passion. You need to focus on your AUDIENCE to get a better chance of success. Most of the pitches this morning at the pitch conference were clearly "passion projects" with no focus on audience.
People ask me: "who should my role model producer be?" and they name big-name producers. But here is what to do. The next time you just sat through a crappy movie in the theater, and you turn to the person you went to the movie with and say "that movie was a total piece of crap!", write down the name of every producer in the credits. These are the producers who know how to get crap distributed. Then call those producers and say "how did you get that crap on the screen?" Because they did it... and YOUR film will be better than THEIRS.
[I'm going to assume that that last bit is a stock closing joke he uses, though it's somewhat difficult to tell.]