MAY 2001







In this 2001 article for the Cannes Film Festival, Greg Bernstein takes a look at the overall marketing of movies. All too often, independent producers make movies without a clear view as to whether they are marketable. A film, like any other merchandise, must be appealing, not only tot he ultimate consumer, but to each of the buyers in the distribution and delivery chain leading to the consumer.

Greg S. Bernstein

So, you want to make a movie. You've got a script, which most people believe to be very good, and you have even cobbled together the $2.5 million necessary to make this movie.

Before you make this movie, have you thought about the target consumer audience? Have you thought about the demographics of this group, their movie viewing trends and preferences? Have you thought whether your product will in fact have access to the consumer delivery systems you seek? Have you thought about the price point necessary to achieve profitability? How about the supply vs. demand for films similar to the one your about to manufacture?

What's that you say? You're not making the latest food processor to be marketed on some infomercial, you're making a movie. Movies are art, they're not some commodity where supply and demand parameters, manufacturing considerations and other such factors applicable to most goods are relevant.

Unfortunately, too many filmmakers think just that way. They think that if they simply make a good movie (in their view) that will suffice. They believe movies are an art form, not manufactured goods like something you might buy at the supermarket, or commodities subject to supply and demand considerations like soybeans or milk.

We don't call this the motion picture "industry" for nothing. It is a business. Like any other business we make "product," which is marketed and sold to wholesalers, then to retailers, and then to the consumers. Product that is subject to the same economic forces of supply and demand like any other commodity. Product subject to the same decision making process that applies to planting wheat or building an office building.

All of the same considerations that go into designing, manufacturing, marketing and purchasing of a new car, kitchen gadget or can of beans, applies equally to making films. You have to consider what the demand is for the product you plan to manufacture, what price it can be sold for, what the anticipated sale price relative to the cost to manufacture and distribute is, whether you have access to the distribution channels to get the product in front of consumers, whether the projected supply of your product will exceed demand and a multitude of other factors.

I am always amazed when an investor in a movie, who made a fortune in some other business, usually real estate, jumps in to the investment in a film like he just won the state lottery and was frittering it away without any consideration. If the investor were asked to invest in a new office building, to be designed by a new architect with no prior experience, but the design looked great, like the next Taj Mahal, but is to be built in the middle of the desert, the investor would have lots of questions to ask before proceeding, if at all. Questions like, it looks great but, what would be the likelihood of renting the building in the desert, what is the current vacancy rates, what amenities might increase the likelihood of rental, how and why will tenants be attracted to rent in this building over others, what are the demand rates, rental rates, building costs, forecasted growth rates, etc. The same kinds of questions that should be asked with respect to investment in film.

Filmmakers will undoubtedly respond that each movie is unique, have no discernible value and are not fungible like bottles of milk or cans of soda. Filmmaking is an art and creating good films is the key.

While I think we would all agree that making a good film is paramount, most filmmakers completely misunderstand what is a "good film." A good film is one that provides entertainment value. Not the entertainment value that a filmmaker thinks the consumer should have but, the entertainment value "distributors" perceive consumers seek.

Consumers choose to have a glass of milk, wine or soda based on what particular thirst they wish to satisfy at that moment and what is available to them to satisfy that thirst (you cannot get wine at McDonalds nor would you likely order milk at a fancy bar nor can you buy something at the supermarket that the market has decided not to carry).

Each week consumers buy bottles of milk because they want to drink milk. Each week, consumers view movies because they wish to be entertained. They wish to laugh, cry, be excited or scared. But, once viewed, they have consumed the film, in much the same way they have drunk the milk. So they buy a new bottle of milk and view a new film to satisfy a new desire to be entertained. They may feel that a film entertained them more or less then the last film they had viewed, but they nevertheless viewed it and obtained some level of entertainment satisfaction. They wanted to be entertained. That's it. And the next day or week they will desire to be entertained again.

But what films are available at any given moment to satisfy the particular entertainment a consumer seeks is dependent on what the theatrical distributor, TV programmer or video store has decided to make available to the consumer that particular day, just like the milk, soda or wine that the supermarket or restaurant has decided to stock.

Bringing any product, be it milk or films, to the consumer is called distribution. Distribution of merchandise is a process of delivery of goods to the consumer. The movement of goods from the manufacturer, to the wholesaler, to the retailer and ultimately to the consumer.

That movement can run into a roadblock at any point along the road to the consumer. If the wholesaler never buys it from the manufacturer, or if the wholesaler cannot make the sale to the retailer, the consumer will never get a chance to buy it. Many good products never make it to the supermarket or hardware store because the retailer does not want to give up the shelf space of something that is selling to try out something new, or because of existing agreements with other manufacturers, or promotional items or whatever. A film, like any other merchandise, must be appealing, not only to the ultimate consumer, but to each of the buyers in the distribution and delivery chain leading to the consumer. Each vendor in the distribution chain ultimately seeks to buy and sell what they think will be sold for the most profit further up the distribution chain.

Movies are no different. Consumers can only pick from the films chosen by the TV programmer to be aired at that time. The films chosen by theatrical distributors to be screened that weekend. The films bought by video stores to be made available for rental. The consumer does not even know of the hundreds of films that never made it to the theater, video store or TV that they might have enjoyed. But that's just it. They enjoyed whatever they did watch and they will never know what enjoyment they would or would not have received if they had the chance to watch the film that the programmer passed on.

The TV network, video store and film exhibitor decides what to purchase and resell to the public based not on what they perceive to be more artistic or better, but based on how much profit they think they can make. They decide this based on whether they think viewers will tune in, rent or come to the theater. And when faced with a number of films that they believe will equally provide their viewers with the entertainment value they seek, they choose which film to buy based on other factors unrelated to the quality of the film. They choose the films based on price, relationships, packaging, past experience and other factors that they think might affect their ultimate profitability.

Many would say that you cannot gage how an audience will react to a film and whether they will or won't like the film. You cannot have a crystal ball as to whether the film will turn out good, whether buyers will buy, whether there will be a recession or change in an economy (like Korea or Latin America) that will impact sales, etc. You cannot crystal ball what will be hot a year from now (that's how long it takes to bring a film to meat). That's right. You can't. But, that is frankly true with everything being manufactured and sold. How do you know that if you plant wheat that there won't be a drought, an oversupply, economic turmoil, war, or a new fad diet to avoid wheat? But you nevertheless move forward based on all the information you have available at the time you embark on your economic journey. You make an educated decision.

Does this mean that every film must be a genre film? No. People want a selection of different films. But Just as they might drink milk more than soda, and soda more than wine, certain films are viewed more often then other kinds of films. Genre films seem to provide the common entertainment escape that viewers want most. In either event, the market will only take a certain supply of these films. If everyone were to switch to making genre films, the oversupply would drive prices down for these films and up for others, shifting interest to the manufacture of non-genre films. Again, supply and demand comes into play. Moreover, not all producers can access the buyers that each other manufacturer can access.

Finally, even if a film has full access to the avenues of distribution and is perceived to satisfy an entertainment demand, each movie, given its component ingredients (cast, production values, director, genre, etc.) has only a certain likely potential total revenue. The cost of the film is irrelevant. If the film is perceived to satisfy entertainment needs for the afternoon TV programming slot vs the midnight slot, its perceived value, and ultimate price, is different. The programmer pays a price based on what ad revenues they normally can get for that slot based on the typical viewership for that time slot. The market won't view a film as a distinctive accomplishment but, as a generic, fungible, good. After all, the viewer who watches channel 99 at 3 am each Saturday night is not going to change drastically because your film is "better" or worse than the film that shows in that time slot the week before or the week after. The same holds true for theatrical and video. Whatever market demands will be satisfied when all the factors are added together will be apparent, and the ultimate price for the film determined.

In the end, filmmakers are only providing a commodity, a manufactured good. A product that happens to entertain. Sometimes consumers go to sporting events for their entertainment value, sometimes concerts, sometimes the theater and once in a while, they go to the art museum.

As for the question whether films are "art," keep in mind that art hangs in museums, after people have seen it and think it belongs in a museum. Art in museums tends to be viewed once and a while. In the movie business, art is not what you make, but how you make it. Just because a film is dramatic, adventurous or erotic, does not make it more or less artistic. Making a film is the "art" of filmmaking. Filmmaking, is a business, like any other. A business to entertain.




Reprinted with permission by The Business of Film

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