The Internet has not entirely emancipated independent filmmakers

But fear not, opportunities abound. And are perhaps with film’s closest living relative: gaming.

At the recent Annecy International Animation Film Festival, I attended a presentation on the financing of animation films given by a very experienced panel of producers, distributors, and broadcasters. At the Q&A session afterwards, I asked them two questions:

a) when do they expect to see the first fully-funded animation feature film financed off a crowdfunding platform like Kickstarter? And,

b)   given the rise of large digital platforms like The iTunes Store and Netflix, where do they see the economics of film production going?

After some whispering among themselves, the panel had no answer for either of these questions. Afterwards, the panel co-ordinator apologised to me saying the panelists “had probably never heard of Kickstarter”. The incumbents are either nervous or myopic.

Anyone who has been in the business of raising money for a film, or made a film, or tried to sell a film, will understand how brutal and heartbreaking the process is. Hollywood is not going to give you a break and independent producers are at the bottom of the food chain. If you’ve survived all three stages and your film is in the theatres, you are separated from your audience by the exhibitor, the distributor, the sales agent and multiple teams of expensive lawyers all looking for a slice of the pie (this is besides keeping your own investors happy). If you think start-up life is hard, don’t go near filmmaking.

The news is not all bad. The rise of large digital platforms like Netflix and Hulu and the explosion of smartphones and iPads present massive new opportunities for content creators to build and aggregate their own audiences. It’s remarkable how casual gaming companies like Zynga or Rovio (Angry Birds), have garnered tens of millions of active paying customers at a fraction of the cost of a typical studio film release – which can cost well over $30m in marketing and publicity alone.

Digital distribution has disrupted the music and book publishing industries. At Triggerfish Animation Studios, we’re excited about what digital distribution will do to the film industry and what that means for independent producers. But Hollywood functions as gatekeeper to audiences and they will not give this up without a fight. Hollywood has money, serious money. In its last financial quarter, Disney generated over $2B in free cash flow. There is too much at stake for them to roll over.

What Hollywood does, and does so well, is tell stories. They sell you the dream. Even today, I bet more people have heard of Tom Cruise than Steve Jobs. Until Silicon Valley can generate the “I can’t wait to see this” excitement for a new film like Finding Nemo or Toy Story, Hollywood will keep its edge and a couple of engineers at Google will be the last of their worries.

Change is coming though. Digital distribution will give independent content creators more power not less. What the change will look like is anyone’s guess, but the casual gaming industry holds some clues. All casual gaming companies have to deal with the issues of customer acquisition and customer retention. Increasingly, they will look to the film industry on how to keep their franchise alive. This will create opportunities for forward thinking independent producers and casual gaming companies.

Cathal Gaffney, the CEO of Brown Bag Films, recently wrote:

Content production businesses equally have to adapt to radical shifts in their business models ….. they now need to explore models where they are selling directly to the consumer. We have a lot to learn from the social gaming companies who make it very easy for their audiences to spend a euro on their site but possible to spend €100, and where only 10 per cent of the audience paying them is enough to make their site profitable.

 And there is huge opportunity for synergies between producers of computer games and producers of film and TV content. Once upon a time web design companies and graphic design companies were totally different businesses until they merged. I see the same thing happening between content producers and computer game firms.

This is the future. This is what tomorrow’s Walt Disney will look like.

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