Gatekeeping in the Evolving Business of Independent Film Distribution [1st ed.] 978-3-030-16895-7;978-3-030-16896-4

Table of contents :
Front Matter ....Pages i-xiii
Film Distribution and the Role of Gatekeepers (Roderik Smits)....Pages 1-23
Front Matter ....Pages 25-25
The Historical Development of Film Sales Markets (Roderik Smits)....Pages 27-55
The Film Sales Process at the European Film Market (Roderik Smits)....Pages 57-77
Front Matter ....Pages 79-79
Analysing Sales Agents as Gatekeepers (Roderik Smits)....Pages 81-100
Sales Agents and Their Gatekeeping Functions (Roderik Smits)....Pages 101-121
The Gatekeeper Role of Distributors in the Dutch Market (Roderik Smits)....Pages 123-144
Front Matter ....Pages 145-145
VOD Platforms in the Era of Online Availability (Roderik Smits)....Pages 147-170
The Powerful Influence of Netflix and Amazon Studios (Roderik Smits)....Pages 171-192
Changing Circumstances of Gatekeepers (Roderik Smits)....Pages 193-209
Experiments with Direct Distribution in the UK (Roderik Smits)....Pages 211-230
Conclusion (Roderik Smits)....Pages 231-238
Back Matter ....Pages 239-276

Citation preview

PALGRAVE GLOBAL MEDIA POLICY AND BUSINESS

Gatekeeping in the Evolving Business of Independent Film Distribution Roderik Smits

Palgrave Global Media Policy and Business Series Editors Petros Iosifidis Department of Sociology City University London, UK Jeanette Steemers Culture, Media & Creative Industries King’s College London London, UK Gerald Sussman Urban Studies & Planning Portland State University Portland, OR, USA Terry Flew Creative Industries Faculty Queensland University of Technology Brisbane, QLD, Australia

The Palgrave Global Media Policy and Business Series has published to date (2017) 15 volumes since its launch in 2012. Concentrating on the social, cultural, political, political-economic, institutional, and technological changes arising from the globalisation of media and communications industries, the series considers the impact of these changes on matters of business practice, regulation and policy, and social outcomes. The policy side encompasses the challenge of conceiving policy-making as a reiterative process that recurrently addresses such key challenges as inclusiveness, participation, industriallabour relations, universal access and freedom in an increasingly globalized and transnationalized world. The business side encompasses a political economy approach that looks at the power of transnational corporations in specific contexts - and the controversies associated with these global conglomerates. The business side considers as well the emergence of small and medium media enterprises. Focusing on issues of media convergence, industry concentration, and new communications practices, the series analyses the tensions between systems based on national decision-making and publicly-oriented participatory structures and a more global perspective demarcated by commercialization, privatization and monopolization. Based on a multi-disciplinary approach, the series tackles three key questions: • To what extent do new media developments require changes in regulatory philosophy and objectives? • To what extent do new technologies and changing media consumption require changes in business practices and models? • And to what extent do privatisation, globalisation, and commercialisation alter the creative freedom, cultural and political diversity, and public accountability of media enterprises? Editorial Advisory Board Sandra Braman, UM-Milwaukee, USA; Peter Dahlgren, Lund University, Sweden; Charles Fombad, University of Pretoria, South Africa; Manuel Alejandro Guerrero, Universidad Iberoamericana, Mexico; Alison Harcourt, University of Exeter, UK; Robin Mansell, LSE, UK; Richard Maxwell, Queen’s College  – CUNY, USA; Toby Miller, City University London, UK; Zizzi Papacharissi, University of Illinois-Chicago, USA; Stylianos Papathanassopoulos, National & Kapodistrian University of Athens, Greece; Caroline Pauwels, Vrije Universiteit Brussel, Belgium; Robert Picard, University of Oxford, UK; Kiran Prasad, Sri Padmavati Mahila University, India; Marc Raboy, McGill University, Canada; Chang Yong Son, Korean Communications Commission, South Korea; Miklos Sukosd, University of Hong Kong, Hong Kong; Kenton T.  Wilkinson, Texas Tech University, USA; Sugmin Youn, Seoul National University, South Korea; Roderick Flynn, Dublin City University, Republic of Ireland; Manjunath Pendakur, Florida Atlantic University, USA; Deepa Kumar, Rutgers University, USA; Winston Mano, University of Westminster, UK

More information about this series at http://www.palgrave.com/gp/series/14699

Roderik Smits

Gatekeeping in the Evolving Business of Independent Film Distribution

Roderik Smits Department of Theatre, Film and Television University of York York, UK

Palgrave Global Media Policy and Business ISBN 978-3-030-16895-7    ISBN 978-3-030-16896-4 (eBook) https://doi.org/10.1007/978-3-030-16896-4 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2019 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover image: © Alex Linch / shutterstock.com Cover design: eStudioCalamar This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Acknowledgements

Most of the research for this book has been undertaken at the University of York (UK) in the period between October 2013 and October 2017. My involvement in the European research project ‘Mediating Cultural Encounters Through European Screens’ (MeCETES) was particularly valuable for my research. It was the first major study to provide much-­ needed insight in the funding, production, distribution and consumption of European films and television series. The project helped me to develop an extensive network of academic and industry relationships, to co-­ organise academic-industry events such as ‘UK Film Distribution—What’s Changing?’ (London, 2016) and ‘Distributing Films Online’ (London, 2017), and to participate in numerous conferences. I was also part of the scoping study ‘How On-demand Culture Is Changing the Business of Films and High-End Television Drama’, which was useful to develop my understanding of the rapidly evolving online market for film and television. It is a relatively new area of research that deserves more academic attention. I am attentive to online developments in this book, and that will remain an important focus in my research. It is also worth mentioning that I was part of a film industry project ‘The Circulation of European Films: The Distribution Sector Perspective’, which was commissioned by the European flagship support organisation for film, Creative Europe. It provided another opportunity to learn about film funding, production, distribution and exhibition. More recently, I became part of the UK research project ‘Beyond the Multiplex: Audiences for Specialised Films in English Regions’. It is the first major study that seeks to understand how to enable a wider range of audiences to ­participate v

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ACKNOWLEDGEMENTS

in a more diverse film culture that embraces the wealth of films beyond the mainstream. Once again, I learned about the industrial circumstances that impact on the process of introducing and promoting films to audiences. Several colleagues have been instrumental in providing support and advice during the course of writing the book. I am particularly grateful to Andrew Higson for his support, inspiration and motivation. His expertise of the film industry, the role of national film industries within and beyond Europe, and the impact of online developments on film distribution and consumption has been critical to develop my work. I am also grateful to Huw D. Jones for numerous conversations about the industrial context in which films are developed, produced and distributed. Huw also provided critical support and advice on how to develop my work. Further, I am grateful to have received feedback from Kevin Sanson, Virginia Crisp, Philip Drake and John Mateer at various stages of the writing process. I would like to thank, more generally, my colleagues on the projects I have worked on and colleagues in the Department of Theatre, Film and Television at the University of York. In particular, I feel fortunate to have worked with James Ballands, Ib Bondebjerg, Ed Braman, Mattias Frey, Matthew Hanchard, Martina Lovascio, Peter Merrington, Caroline Pauwels, Duncan Petrie, Eva Novrup Redvall, Ilse Schooneknaep, Nathan Townsend and Bridgette Wessels. Guidance and support from Mala Sanghera-Warren at Palgrave has also been vital for developing this book. I would like to extend my thanks to the film industry professionals I interviewed for the research, including policymakers and producers; sales agents and distributors; online platform operators, broadcasters and festival organisers; and venue managers and programmers. Many of them have also introduced me to colleagues within their networks. I appreciate that they were prepared to share their knowledge with me and helped to inform this book. Finally, I am greatly indebted to my parents René and Annemarie, and my brothers Domien and Leander, who have always been there to support me.

Contents

1 Film Distribution and the Role of Gatekeepers  1

Part I Film Sales Markets  25 2 The Historical Development of Film Sales Markets 27 3 The Film Sales Process at the European Film Market 57

Part II Gatekeepers and Gatekeeping Networks  79 4 Analysing Sales Agents as Gatekeepers 81 5 Sales Agents and Their Gatekeeping Functions101 6 The Gatekeeper Role of Distributors in the Dutch Market123

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Contents

Part III Online Film Distribution 145 7 VOD Platforms in the Era of Online Availability147 8 The Powerful Influence of Netflix and Amazon Studios171 9 Changing Circumstances of Gatekeepers193 10 Experiments with Direct Distribution in the UK211 11 Conclusion231 Appendix: Interviews239 Glossary243 References245 Index271

Declaration

Parts of this work have been published in other academic outputs:  Smits, R. (2016). Gatekeeping and Networking Arrangements: Dutch Distributors in the Film Distribution Business. Poetics, 58, 29–42. Smits, R. (2017). Film Distribution: A Changing Business. In: J.  Wroot and A. Willis (Eds.), DVD, Blu-Ray and Beyond: Navigating Formats and Platforms within Media Consumption. Houndmills: Palgrave Macmillan, pp. 115–134. Smits, R. (2018). Tournaments of Values at the European Film Market. Arts and the Market, 8(1), 64–79.

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List of Figures

Fig. 2.1

The poster of the first American Film Market in 1981. Courtesy of the Independent Film & Television Alliance® 36 Fig. 2.2 Trade exhibitor organisations participating in Cannes, AFM and Berlin, 2005–2014. Source: Figures are collated from the Cannes, AFM and Berlin sales markets (http://www. marchedufilm.com/en; http://www.americanfilmmarket.com/; http://www.efm-berlinale.de/en/home/homepage.html)49 Fig. 2.3 Industry participants attending Cannes, AFM and Berlin, 2005–2014. Source: Figures are collated from the Cannes, AFM and Berlin sales markets 50 Fig. 3.1 The cover of Screen International on the first day of the EFM. Courtesy of The Match Factory GmbH and Screen Daily 73 Fig. 7.1 The growing online VOD market in European countries (in $ millions). Source: Statista (2016). Figures and estimates provided by Statista are based on market research, third-party data and macro-economic indicators 150 Fig. 10.1 Traditional distribution and day-and-date release strategy of The Survivalist in the UK home market 220 Fig. 10.2 Direct distribution and near day-and-date release strategy of Borrowed Time in the UK home market 223 Fig. 10.3 Direct distribution and day-and-date release strategy of The Machine in the UK home market 225

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List of Tables

Table 2.1 Table 3.1 Table 4.1 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 8.1 Table 8.2 Table 10.1 Table A.1

Industry attendance at Cannes, AFM, MIFED and London in 199745 Differences between business locations at the EFM 68 A typology of sales agents in the contemporary film industry 92 A typology of gatekeeping functions 102 The creative and business context of The King’s Speech104 The creative and business context of Ida109 The creative and business context of Oh Boy115 Market share of Hollywood major distributors in the Dutch market in 2016 127 Market share of major independent distributors in the Dutch market in 2016 128 Market share of specialised independent distributors in the Dutch market in 2016 129 Differences between major and specialised independents in the Dutch market 141 A self-compiled list of Netflix original feature films ordered by date of release, October 2015–December 2016 176 A self-compiled list of Amazon original feature films ordered by date of release, December 2015–December 2016 180 The number of film releases in UK cinemas 214 List of interviewees 239

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CHAPTER 1

Film Distribution and the Role of Gatekeepers

1.1   Research Focus This book is about the business of distribution, which is the point around which the international film business revolves. It brings together thousands of companies who participate in the process of selling and buying the rights of films in the marketplace. These companies mediate and consult between film producers on the one hand and exhibitors or retailers on the other hand. They directly influence the types of films that are able to circulate to international markets, well beyond the national or domestic markets within which they originate. As such, distribution immediately impacts on the structures of film production and film consumption. From the perspective of producers, distribution performs a critical role in the process of enabling or disabling access to audiences; from the perspective of audiences, distribution performs a critical role in providing public access to films they prefer to watch. In other words, distribution is situated at the heart of the film business, representing a powerful gatekeeping function in connecting the structures of production and consumption. Studying the business of film distribution is therefore important for two reasons in particular. First, distribution is a process of regulating the circulation of and access to films in both national and international markets (Tryon 2013; Crisp 2015). Distribution organisations are operationalised metaphorically as ‘gatekeepers’ that filter out product at different levels in the marketplace. Such organisations in effect decide which films are made © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_1

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available to audiences: they exert control over processes of inclusion and exclusion, over the process of enabling access to some films and disabling access to others, and over the process of rendering films visible to audiences. Gatekeepers are particularly needed to deal with issues of oversupply and abundance of product in the cultural industries. For instance, in terms of the film industry, research by the European Audiovisual Observatory has revealed that an enormous quantity of more than 6000 feature films was produced worldwide in 2016, but only a fraction of these films secured (substantial) distribution in a range of international markets (Focus 2017). Reports by the German Films Service (2017) demonstrate that between 550 and 850 films were released in cinemas in large European markets such as the UK, France and Germany in 2016. The fact that only a relatively small number of films secure such distribution is also understood from the perspective of scarcity economics, whereby physical resources put restrictions on the process of media circulation and prevent products from flowing freely in the global marketplace. The second reason why it is important to study the business of film distribution, which intersects with the first point, is that distribution is a process that impacts on the comparative value of films in the global marketplace. The distribution business classifies and evaluates the potential of films against each other. By making an investment in selected films and helping to shape their profile in the marketplace, the distribution business impacts on the process of value creation and creates hierarchies. To this end, studies by Brian Moeran (2011) and Timothy Havens (2011) have demonstrated that cultural, social and economic values in fields of cultural activity are created within a global institutional environment of festivals and sales markets in which cultural products are introduced and promoted; and cultural and economic values are created by distribution companies which become formally attached as investors and gatekeepers. The cumulative impact of such values has an important influence over the distribution process of films and the capacity to invest financial resources in marketing and promotion to reach audiences at the level of consumption. The process of distributing films is organised by sales agents and distributors, who we can describe as traditional gatekeepers in the sense that they have developed a long-established reputation in the distribution business as key organisations through which films are traditionally distributed. They differ from other types of gatekeepers which have appeared in the marketplace more recently to capitalise specifically on the development of the online market. Sales agents organise the distribution of films to

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i­nternational markets: they represent films from particular producers and sell the rights to distributors in international markets. Distributors, in turn, acquire distribution rights from sales agents and release films in local or national markets. In industry discussions around film acquisitions in the marketplace, sales agents are often referred to as ‘sellers’ in the distribution business, while distributors are ‘buyers’. It is worth noting, however, that distributors negotiate deals with cinema exhibitors, DVD/Blu-ray retailers, online platforms and television broadcasters in local or national markets, and thus equally operate as sellers. As I will demonstrate in this book, sales agents and distributors operate as part of international gatekeeping networks through which distribution processes are organised. They gradually filter out and narrow access through decentralised decision-making at national and international levels. Thus, sales agents often make a first selection from new film projects on offer in the global marketplace. There are several hundred such companies in the global film business, and film projects generally need their commitment to enable access to distributors in international markets. The distributors make the second selection and decide which films are made available to audiences in specific countries or territories. They negotiate deals with sales agents to acquire foreign films in the international film marketplace, but they operate from local or national markets. There are several thousand such distributors worldwide. Sales agents and distributors are then the primary gatekeepers that invest in films and add values to those films by inserting them into the distribution process. As Miriam Ross (2010: 11) and Peter Bloore (2013: 34) note, they each have their own role to play in the value chain, between the processes of production and consumption. Their expertise and skills from different levels in the marketplace are critical in positioning films in the marketplace. Together, they create gatekeeping networks through which they exert power and control over the distribution of films in the marketplace. This book examines in depth the functions of these gatekeepers and gatekeeping networks, in order to understand where power and control lie in relation to processes of cultural flow: which films reach which audiences in the marketplace, how those films reach these audiences and how distribution impacts on the commercial performance of these films. Given the powerful role of distribution processes, it is surprising that the practice of gatekeeping and the organisation of gatekeeping networks in the film industry have not been examined in more detail. What is missing is an

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understanding of the work practices, selection processes and distribution strategies of sales and distribution organisations, large and small. Such an analysis would provide an insight into their decision-making and their ability to exert power and control over the process of enabling or disabling access for films. It is this analysis that I provide in this book, and the first research question asks how gatekeepers and gatekeeping networks operate in the film distribution business and how their conventional practices have developed over time. In addition to such conventional gatekeeping practices, it is important to acknowledge that recent online developments in the marketplace brought about by increasing digitisation have impacted on the nature of the distribution business. A recent surge of studies of digital disruption (Iordanova and Cunningham 2012; Cunningham and Silver 2013; Crisp 2015; Nikdel 2017), on-demand culture (Tryon 2013; McDonald and Smith-Rowsey 2016; Smits and Nikdel 2018) and connected viewing (Holt and Sanson 2014) has demonstrated that the film distribution business is in a state of transition. Stuart Cunningham and Jon Silver, for instance, noted in 2013 that the online film market was still very much in early development and had yet to grow into a state of maturity (2013: 31). They argued that the advent of new online corporations such as Netflix, Apple, Google, Microsoft and Amazon would have a dramatic impact on film distribution, changing the current landscape and existing power dynamics. That has indeed proved to be the case. In addition, new-media advocates, such as Chris Anderson (2006), have drawn attention to the evolving nature of cultural access in the online market. They describe the implications of the new online economy of media distribution in relation to the long-standing physical economy of media distribution, arguing that online distribution is dramatically changing the processes of regulating access and cultural flow. In particular, online developments provide new opportunities for small-scale, stand-alone producers at the specialised end of the marketplace because producers can retain control themselves over the distribution process and make films available without the intervention of sales agents and distributors. Dina Iordanova (2012: 4), for instance, notes that while such new approaches to organising distribution are emerging, conventional distribution and gatekeeping arrangements are being challenged, resulting in processes of dis-intermediation: that is, the belief that digital and online technologies undermine the value of cultural gatekeepers. This provides a new perspective through which to explore gatekeepers and gatekeeping networks. The second research question

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then aims to establish an understanding of those changes now taking place: how do online developments impact on the practice of gatekeeping and the function of gatekeeping networks?

1.2   Discussions About Film Distribution I have briefly introduced the practice of gatekeeping as an essential part of the film distribution business and will now survey some of the broader theoretical and analytical discussions about film distribution. Ramon Lobato (2007) offers a useful starting point. He noted in 2007 that the study of film distribution has received much traction from academics focusing on consumption or reception studies (2007: 114). Because distribution in those studies is analysed from a consumer perspective, there is a need to research “the circuits through which texts move” (2007: 114). He also noted that there is much to be done in terms of understanding the business of film distribution analytically and theoretically. In particular, “researchers often find themselves bogged down in the minutiae of box office figures or sales agreements without the theoretical tools which might help them make sense of this unfamiliar terrain” (2007: 114). In developing the limited theoretical work about film distribution, he is attentive to the work of film industry historians and political economists. Film industry historians such as John Trumpbour (2002) and Douglas Gomery (2005) have investigated the business structure of the film industry in the past, and particularly the long-standing dominance of the major Hollywood studios in the global film industry since the 1920s. The Hollywood studios were and still are able to exert such dominance through vertically integrated production and distribution structures, with the desired effect that they regulate and control decision-making about their own productions at the stages of production and distribution. This historical industry perspective has some similarities with the political economy perspective: Colin Hoskins et  al. (1997), for instance, focus more specifically on issues such as market structures, market powers and market concentration. They and others have consistently emphasised the powerful operations of Hollywood’s studios in the US and international markets, in terms of box-office revenue in the theatrical cinema market and ancillary revenue in the home video and television markets.

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One important notion that emerges from both theoretical perspectives is that control over distribution has been the primary means through which Hollywood studios have exerted power in the past, and continue to exert power in the present. Thus, to enable market access, the Hollywood studios have established global distribution networks to ensure that the films they engage with are shown in countries worldwide, while they are also able to exert control over the processes of making such films available to audiences in these countries. Hoskins et al. (1997: 52) note that such control over distribution has governed their business activities since the First World War, and this has separated Hollywood studios traditionally from independent companies in the business, who need to negotiate individual deals with distributors to secure distribution for their films. Related to this notion of distribution at the centre of Hollywood’s business operations, the notion of an unevenly balanced, polarised market structure is prevalent in the perspectives of political economists and film industry historians. The argument here is that the Hollywood studios are able to reduce risk through their global distribution networks. Indeed, Hoskins et al. (1997: 61) note that their capacity to circulate films globally provides a competitive advantage, as well as their capacity to work with their own distribution offices in local markets through which distribution is organised. The global film business is thus very much controlled by an oligopoly of Hollywood studios that exert power over distribution. These questions of power and control have been taken further in more recent academic contributions about online film distribution. The work of Stuart Cunningham and Jon Silver (2013), Chuck Tryon (2013), Michael Curtin et  al. (2014), Kevin McDonald and Daniel Smith-Rowsey (2016) and Benjamin Birkinbine et al. (2017) has demonstrated that there is a proliferation of powerful globally oriented corporations in the online film market, including Netflix, Apple, Google, Microsoft and Amazon. Cunningham and Silver note that such companies have formed a new oligopoly in the online market in the 2010s (2013: 3). They also note that, despite several attempts to enter the online market and anticipate online growth, the Hollywood studios have lagged behind the new online corporations in terms of control over video-ondemand (VOD) platforms. For instance, in the period from 2008 to 2013, only the VOD platform Hulu was owned as part of a joint venture between some of the Hollywood studios, but that service was (and still is) available only in the US and Japan, rather than worldwide. Cunningham

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and Silver therefore see Hollywood studios as powerful suppliers of content in the online market, but not as powerful VOD platforms. This raises questions about power dynamics between Hollywood studios in the physical economy and relatively new but already powerful ­corporations in the online economy—what Cunningham and Silver refer to as the new ‘King Kongs’ of the distribution business. As they asked in 2013: “To what extent is the present moment one where we can trace a decoupling of powerful controllers of content supply and those emerging powers which control the new distribution [VOD] platforms?” (2013: 5). In more recent years, Netflix and Amazon have presented themselves as the new online market leaders in Europe and the US, both attracting tens of millions of subscribers. They do not just operate as VOD platforms, but they have branched out into film production and distribution, and thus increasingly operate as vertically integrated studios. That is an increasingly important strategy through which they exert control over distribution in today’s film business. Given the importance of Hollywood studios and online corporations to the film business, and their ability to support films with substantial distribution support to reach mainstream audiences in international markets, it makes sense that such discussions prevail in studies of film distribution. In terms of the film distribution business as a whole, however, this focus on the biggest companies represents only one part of the business. In my own study of gatekeepers and gatekeeping networks, I will therefore explore distribution from a broader perspective, providing insight into the distribution of films beyond the vertically integrated operations of the most powerful companies. In broadening my focus to this aspect of distribution, the emphasis of my analysis shifts to the independent sector of the film business. The independent business operates in a markedly different way to the major Hollywood companies. It brings together a range of companies working at various stages of a film’s life cycle. Most of them are small, stand-alone companies working in film financing, production, distribution or exhibition, but companies with fully or partly integrated operations also belong to this business. Even the Hollywood studios and large online corporations regularly participate in this business as sales agents or distributors. The label independent business is here thus conceptualised in broad terms, describing a context in which producers establish collaborations with other companies to further support their films through subsequent stages, rather than all of those industrial functions being carried out and ­controlled

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by one single company. In particular, I am interested in analysing the process of introducing films to the marketplace through sales agents and a range of different distributors in international markets. While most academic contributions to the study of film distribution since 2010 have focused on the proliferation of powerful online corporations, the work of Julia Knight and Peter Thomas (2011), Dina Iordanova and Stuart Cunningham (2012), Elliott Nikdel (2017) and Roderik Smits and Elliott Nikdel (2018) has provided insight into the independent distribution business. Such studies have in common that they focus on new opportunities for small-scale, low-budget films to reach global audiences in the digital online era. For instance, Knight and Thomas noted in 2011: In view of the potential offered by digital technology, it is possible to argue that it is now more important than ever that we understand the processes that connect movie image work to its audiences. If we are to more fully understand why we have the film culture we do—both historical and temporary—we need to better understand the factors that shape and influence the distribution process whereby some films are more widely seen while others are not. (2011: 16)

A better understanding of distribution processes is thus required to comprehend digital online changes. Indeed, as Knight and Thomas argue, such an understanding can be developed through a comparison of industry practices in the past and present. Knight and Thomas have therefore adopted the perspective of continuity and change. This perspective is central to David Hesmondhalgh’s influential book The Cultural Industries (2013, the third edition). In short, Hesmondhalgh argues that it is important to analyse the extent to which online changes “really represent major, epochal shifts in the way that culture is produced and consumed” (2013: 3). Elaborating on this point, he notes that “there are many continuities that might be obscured by an overemphasis on change” (2013: 3). He therefore claims that the notions of continuity and change are entangled with each other, and may overlap, rather than describing quite distinct situations. In the case of Knight and Thomas, they have embraced this perspective of continuity and change to analyse factors that impact on the way films are introduced to audiences. This perspective of continuity and change could also help to understand the role of gatekeepers and gatekeeping networks in the film distribution business. To date, academic studies have

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largely ignored the work practices and strategies developed by sales agents and distributors in the independent business, and the wider organisational business context in which they operate. However, industry handbooks and secondary literature provide insight into such film distribution practices and the organisation of the independent film business more generally. For instance, the contributions of Martin Dale (1997), Jeff Ulin (2013) and Angus Finney and Eugenio Triana (2015) have brought into focus the global context in which sales agents and distributors develop professional relationships. Such studies reveal that the distribution business gathers several times each year at sales markets organised as parts of film festivals such as Cannes, Berlin and Los Angeles. Sales agents and distributors have formed close-knit business communities by gathering at such markets, and it is through those business communities that they exert a dominant influence over the distribution of independent films internationally. While such studies are very informative in terms of beginning to understand the work practices of sales agents and distributors, a critical academic consideration is needed to make more sense of their gatekeeper roles in the past and the present.

1.3   Studying Film Distribution and Gatekeepers In designing this study of film distribution and gatekeepers, I have drawn on insights from the Humanities and the Social Sciences. Since the inception of Film Studies as an established academic discipline in the 1970s in the UK, film scholars have clearly favoured the study of texts over an analysis of the industry, primarily because Film Studies in the UK, and to some extent in the US, is traditionally rooted in the Humanities research tradition, especially in Literary Studies. By contrast, research engaged with industry-related analysis is traditionally associated with Media Studies, which bears more resemblance to a Social Science research tradition. More specifically, I have drawn on the tradition of ‘critical media industry studies’ as proposed by Timothy Havens et al. (2009). This perspective focuses on the “complex interplay of economic and cultural forces, as well as the forms of struggle and compliance” in media industries (2009: 235). It is useful for my study to critically analyse how meso-level interventions of sales agents and distributors are taking shape. To study how sales agents and distributors operate as gatekeepers is to explore their labour and work practices, the relationships they develop and maintain within gatekeeping networks, and their ability to regulate access and exert power and control

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over distribution. The critical media industry studies perspective is also useful to enhance our analytical understanding of the role of gatekeepers at a time of disruption and change to traditional business models and industry professions. For instance, there is a need to develop theories of digital disruption and the widespread narrative of dis-intermediation processes. The critical media industry studies perspective examines the media industries in a different way than macro-level political economy studies, which have traditionally dominated media industry discourse. In a related study, Lotz notes that macro-level political economy studies “have expansive scope, yet they are typically informed by data such as broad statistical measures that do little to reveal the daily functioning of media or the situation of particular workers” (2009: 26). Critical media industry studies have addressed the need to develop a better understanding of the processes of labour behind the creation and circulation of media works in the new online era. Alongside the critical media industry studies framework developed by Havens et al. (2009), the edited collection Media Industries by Jennifer Holt and Alisa Perren (2009) has been another key publication that helped to conceptualise media industries as a field of study. In a recent review about the development of media industry scholarship, Holt and Perren (2019) demonstrate that the field has matured in the past ten years. The changing nature of media industries has revived discussions about “creative labour and media work, digital distribution, platforms and algorithmic culture, and infrastructure” (2019: 34). In particular, distribution is an emerging research area in the context of the digital revolution, with media industry scholarship increasingly recognising its impact on disruption and change in media industries. Alisa Perren argued in 2013 that media industry scholarship has, perhaps unwittingly, failed to recognise the wealth of research that has been undertaken about distribution (2013: 165). The fact that distribution studies by scholars in disciplines such as film, television or other media industries are too often separated from each other has been an obstacle for developing distribution as a coherent and meaningful sub-discipline within media industry studies. Perren therefore calls for more comparative research about film, television and other media industries to bring “often parallel-­ but-­ separate conversations” into dialogue (2013: 169). Film industry scholars, for example, can employ conceptual and analytical perspectives about distribution that have been developed in research about television and game industries.

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While my study about gatekeepers in the film distribution business is situated within critical media industry studies, it also benefits from analytical perspectives developed in other disciplines. The concept of gatekeepers is  often employed in relation to the ‘production of culture’ perspective, particularly by scholars in Sociology and Organisation Studies (Peterson and Anand 2004).1 Such studies have analysed the work practices and strategies of gatekeepers as decision-makers with an immediate impact on processes of cultural flow. Influential perspectives by Pierre Bourdieu (1984) on taste and Paul DiMaggio and Walter W. Powell (1983) on uncertainty, for instance, have been useful to analyse how gatekeepers make acquisition decisions about creative works. In addition, influential perspectives by Joseph Lampel and Alan Meyer (2008) and Brian Moeran and Jesper Strandgaard Pedersen (2011) on trade fairs and sales markets have been useful to analyse how sales companies operate as gatekeepers that ascribe values to creative works to support international sales. It is also clear that gatekeeping practices are played out in different stages of the production and distribution process, and the perspective by Pacey Foster and Richard Ocejo (2015) on brokerage functions offers a way to understand such practices in analytical terms. These various analytical perspectives are useful to analyse how work practices and processes impact on cultural flows, but they are less attentive to the operation of power. They are therefore more closely associated with the production of culture studies than with the critical media industry studies. However, that is not to say that they are irrelevant to critical media industry studies. My study combines an understanding of the organisational work practices of sales agents and distributors with an understanding of the operation of power to develop a critical analysis of gatekeeping in the evolving business of film distribution. My focus on professions such as sales agents and distributors also contributes to labour studies of media industry practitioners in ‘less remarked upon’ roles. Todd Gitlin’s (1983) foundational study on professional practices of television executives, producers and creative talent is an important precursor in this respect. Timothy Havens (2006), Denise Bielby and Lee Harrington (2008) and Violaine Roussel (2017) have also made important contributions about the industrial function of media professions. There is, in addition, a broader tradition of studies by John T. Caldwell (2008), Vicky Mayer (2011), Bridget Conor (2014), Michael 1  In addition, there is a rich tradition of gatekeeper studies undertaken by scholars working in Journalism and Mass Communication (Shoemaker and Vos 2009).

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Curtin and Kevin Sanson (2016) and Mark Deuze and Mirjam Prenger (2019) that have examined the working conditions of labour, cultural practices and identities of professional workers in media industries. It is clear that media industry professions and their industrial practices are also affected by developments in the new digital and online era. Deuze and Prenger (2019: 19) point to the influence of shifting power relations in this respect: “Given the profound transformations across the media industries and the corresponding destabilization of media professions and practices, questions of power become highly relevant.” In the film industry, this notion of power is often associated with shifting relations between producers, sales agents, distributors and consumer platforms: the development of powerful online VOD providers is impacting on the distribution business and the professions of sales agents and distributors. My study will analyse how the industrial practices of sales agents and distributors are changing to maintain an important influence over the creation and circulation of films in the online era.

1.4   The Scope of the Study For the purposes of this study, I focus primarily on the distribution of European and North American films. Such films are usually initiated by European and/or North American producers but may well include co-­ production partners from other countries. I also focus primarily on sales and distribution companies and film sales markets in Europe and North America. It provides opportunities to speak with industry professionals that belong to international distribution networks, which increases the generalisability of the study. Industry professionals, journalists and analysts use different currencies to describe production budgets and other specific costs and expenses related to films. I use the US dollar ($) by default because it is the standard currency for the international film industry. In cases where other currencies such as Euros (€) or British Pounds (£) are used, I also include a conversion to US dollars. I acknowledge that distribution activity takes place on local, national, international and global levels. While these dimensions often overlap, I use some of these concepts in a relatively strict manner and others rather loosely. It is, for example, often difficult to distinguish between the local and the national, and I therefore use the term local, national market to draw attention to a specific consumer market, a local context in which industry players from a single country or a distribution territory

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of several countries compete against each other. By way of contrast, I use the terms international markets and international marketplace much more loosely, to refer to several countries or distribution territories or to refer to a great many countries or distribution territories worldwide. My use of the term global marketplace, in addition, is less concerned with the sale and distribution of films to international markets, and more about the film industry as one globally connected business marketplace. It is also important to further clarify my focus on gatekeeping processes in the film distribution business. Distribution intersects with the processes of development, production, marketing and exhibition. The involvement of gatekeepers is analysed through these various stages of the film supply chain. More specifically, I analyse how films are acquired in the marketplace, how the distribution process of films is organised and how films are released in local, national markets. While the focus remains primarily on sales agents and distributors, I am also attentive to arrangements developed between producers and sales agents and between distributors and exhibitors. For instance, because gatekeeping arrangements have an important impact on the ways that films are ultimately introduced and promoted to audiences, I analyse how distributors work with gatekeepers in the film exhibition business, such as theatrical cinema exhibitors, DVD/ Blu-ray retailers and online VOD platforms. Given my focus on gatekeepers in relation to power, control and access, I will be less attentive to other important subjects in studies of film and media distribution. Digital disruption and online change have revived discussions around intellectual property rights, governance and regulation of distribution networks. Ramon Lobato and Julian Thomas (2015) have analysed how informal (illegal) distribution and exhibition networks have developed online, while Paul McDonald et al. (2015) have analysed legal frameworks around copyright laws, licensing and piracy. Another discussion revolves around film distribution policies developed by European institutions such as Creative Europe and Eurimages to support the circulation of European films and strengthen their competitiveness, particularly in response to the popularity of Hollywood studio films in Europe and other international markets (Bondebjerg et al. 2015). Similarly, national film institutions, such as the British Film Institute (BFI) in the UK, have prioritised new distribution policies to support the circulation of local or national films. While I will acknowledge the role of such publicly funded film bodies at European and national levels, the focus remains on the

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involvement of sales agents and distributors with specific films, rather than addressing how specific policies impact on the distribution of films.

1.5   Methodology A variety of methods have been employed in media industry scholarship and culture studies to analyse meso-level interventions of media industry practitioners (Freeman 2016). Consistent with research designs by Caldwell (2008), Bielby and Harrington (2008) and Lotz (2009), I developed a multipronged approach of different yet overlapping methods to establish an in-depth understanding of gatekeeping practices and arrangements in the film distribution business. This involved interviews with 40 film industry practitioners, a participant observation of sales and distribution practitioners at work at the European Film Market (EFM) in Berlin, and analysis of 300 trade press and newspapers articles as well as several film industry reports. First, the trade press and newspaper articles provided an important starting point for developing an understanding of pressing issues in the film distribution business. Online articles in trade press media such as  Variety, Hollywood Reporter and Screen International were useful to learn about sales and distribution deals, film release strategies and box-­office figures. I also consulted the digital database ‘Entertainment Industry Magazine Archive’, which allowed me to conduct historical research on the development of sales agents and distributors, as well as to learn about the career trajectories of particular industry professionals.2 Variety, Hollywood Reporter and Screen International report mostly about the US and UK markets, but they also work with a team of international correspondents who report about developments in other countries and world regions, which was useful for my research. I also read online articles about the film distribution business in newspapers to keep informed. In particular, the film and media sections of The Guardian in the UK provided important insights. Such articles are often more analytical than trade press articles. It is worth noting that some journalists are reporting for the trade press and newspapers, such as Geoffrey Macnab and Charles Gant. I also read news articles on the European film website Cineuropa, which reports about developments 2

 http://www.proquest.com/products-services/eima.html.

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in European countries. I will use terms such as trade journalists, trade observers and trade analysts while referring to information from trade publications in this book. I also want to highlight the relevance of industry reports for acquiring a sense of industry discourse. Such reports are often commissioned by public support institutions such as Creative Europe and the BFI to inform industry professionals about current issues and changes in the industry. These reports were also useful for gathering statistical data about the performance of individual films or about national film industries. In combining these various sources of secondary material, I have drawn on a sizeable list of references, as my bibliography demonstrates. Second, I conducted interviews with 40 industry practitioners in the period between October 2012 and October 2017 (see Appendix). It enabled me to ask questions tailored to specific subjects and extract in-­ depth information. Matthew Freeman’s (2016) work on methodological approaches to media industry studies demonstrates that the value of interviews is well recognised. However, there are challenges for researchers in terms of gaining access to industry professionals and companies (2016: 112). Industry professionals are not always forthcoming in wanting to talk about their work, partly because much of the information involved might be considered to be private business information. Lotz (2009: 34), for instance, notes that industry professionals in executive positions are particularly difficult to reach for academic researchers. In terms of approaching industry professionals, the first introduction is often critical. Giselinde Kuipers (2014) notes that it is particularly important to introduce the research topic and provide context to demonstrate how interviewees can make a valuable contribution. Further, self-promotion is important for academic researchers, as Kuipers (2014: 57) notes: “Assume that people will look you up on the Internet, and try to tweak your own online presence. I have benefitted greatly from my personal and project websites.” John Mateer, in addition, notes that approaching industry professionals through personal contacts and networks is valuable for establishing an initial connection, and this approach is often preferred because it demonstrates a link to the individual’s business networks (cited in Freeman 2016: 112). It was precisely this networking approach that I adopted in my research. I experienced first-hand how valuable personal contacts are in the film industry, and how one contact enabled access to other colleagues within their networks. I also learned from the first interviews that film professionals are surprisingly open to discussion and debate. Kuipers, in

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this respect, notes that the interview is a method with which industry professionals are familiar, since it resembles the character and the nature of business conversations and meetings (2014: 55). The interviews were conducted with industry practitioners in different functions, including representatives of sales agents, distributors, content aggregators and VOD platforms, as well as book scouts, producers, festival programmers, trade journalists and distribution consultants. Most of these interviews were conducted with experienced executives of sales and distribution companies, typically Managing Directors. The interviews typically lasted between 45 minutes and 60 minutes. I conducted the interviews in person or over Skype, and they were semi-structured and informal in tone. Third, my fieldwork involved a participant observation of sales and distribution companies at work at the EFM in Berlin. As will be clear in Chap. 3, I observed the organisational structure of the sales market and the hierarchies created between sales agents within that market. I also attended industry events within the sales market itself to learn about current issues in the business. My observation underlines Bielby and Harrington’s (2008: 186) statement that sales markets provide critical insights into “the presentation and conduct of the marketplace”. For Bielby and Harrington, this means “its social organization and stratification, social networks, cultural tone and sensibilities, vocabulary and discourse, interpersonal tensions, industry issues, and institutional hurdles and goals, as it oriented to the product it markets”. According to Vicky Mayer (2011: 182), a particular advantage of participant observation is that it opens up “the potential to examine our academic assumptions and biases as we participate in the work world we observe”. In line with that statement, I experienced first-hand that my observations at the sales market helped to enrich insights from interviews and trade press articles. I also participated in small-scale events such as Film Expo South and Distribution Rewired in the UK, and I co-organised the academic-­industry event ‘UK Film Distribution: What’s Changing’ and the academic-­ industry event ‘Distributing Films Online’.3 I moderated several panel discussions with distribution professionals at events like these. Such opportunities provided an effective way of acquiring knowledge about 3  I co-organised several academic-industry events that brought together academics and industry professionals as a project member of the MeCETES research project (www.mecetes. co.uk) and of the ‘On-Demand Culture’ research project (www.ondemandproject.wordpress.com).

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specific subjects from several industry professionals at the same time: rather than organising individual interviews with industry professionals and having different conversations, the panel discussions brought together several industry professionals who were contributing to the same conversation. Research findings from participant observations, interviews and news articles allowed for a productive triangulation of evidence, with each of these methods contributing something different to a comprehensive and precise account of gatekeepers in the film distribution business. In particular, this multipronged approach was important to substantiate the views of industry practitioners and media observers who may protect their own business interests.

1.6   Outline of the Book The book is structured in three distinct sections. The first section focuses on the role of film sales markets. As noted above, sales markets offer a business environment in which sales agents introduce films to international distributors. Chapter 2 provides a historical account of the distribution business through the analysis of sales markets. It surveys the development of sales markets from the 1960s onwards to analyse how such events have contributed to the construction of a business environment for the sales and distribution community. The chapter also involves a consideration of how the development of sales markets can be understood in analytical terms, and, as such, will be discussed in relation to the concept of field configuring events. While the focus in Chap. 2 remains on the broader field of film distribution and the development of sales markets therein, the focus in Chap. 3 shifts to one of the key sales markets: the European Film Market in Berlin. The main purpose here is to analyse the film sales process within sales markets, and the role of sales agents in influencing that process. First, I analyse how sales agents position themselves within the EFM, since they work from different types of stands and offices. Second, I analyse how they make use of film screenings to introduce and promote films to distributors. In analytical terms, this chapter draws on discussions about processes of value creation within sales markets. I argue that sales markets exert an important influence over gatekeeping by creating social and cultural hierarchies that impact on value creation processes.

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The focus of the analysis in the first section of the book remains primarily on the contextual circumstances that impact on the process of gatekeeping. In the second section, I develop in-depth analyses of gatekeeper practices through case studies of sales agents and distributors. Chapters 4 and 5 provide insight in discussions around cultural  gatekeepers to develop an analysis of sales agents in the film industry. In Chap. 4,  I discuss the sorts of roles and business functions that sales agents perform; the types of companies of which the sales community is made up; and the political influences of trade associations, funding bodies and other film agencies. I expand further on this analysis of sales agents in Chap. 5, where the focus will be on the ways they organise the metaphorical process of opening and closing the gates, and how they introduce and promote films to international distributors. By analysing the involvement of sales agents with films such as The King’s Speech (2010), Oh Boy (2012) and Ida (2013), I demonstrate that gatekeeping is a complex process that requires more than just acquiring and selling films. Chapter 6 addresses the role of film distributors in the Dutch market to demonstrate that they make a selection from several thousands of films on offer in the global marketplace every year. The majority of films released in the Dutch market are international productions, rather than domestic productions, demonstrating the important role of distributors in working together with sales agents to enable access for such films. In order to analyse relationships between them, I focus on acquisition decisions of different types of distributors. In particular, I analyse how factors such as reputation and status, taste preferences and networking arrangements work together as important influences in the decisionmaking process. This analysis also sheds further light on the notion of gatekeeping networks. Having analysed sales agents and distributors as traditional gatekeepers in the film distribution business, I go on to explore how online developments and new power dynamics are impacting on their business in the third section of the book. The online market developed rapidly since the early 2010s, and this provides a new perspective from which gatekeeping arrangements can be explored, particularly in relation to claims of digital disruption and dis-intermediation. Chapter 7 establishes an understanding of the emerging field of online distribution. The nature of the online market differs from the physical (analogue) market, representing a dramatic change from scarcity of content to abundance of content. I focus on

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various types of VOD platform providers in the marketplace to analyse how they enable distribution for a greater range of films. Such new online opportunities for films will be discussed in relation to notions of cultural democratisation and long tail economics. Chapter 8 addresses the powerful influence of Netflix and Amazon in the distribution business. In recent years, they expanded their business operations and rebranded from VOD platform providers to fully integrated studios with production and distribution departments. I will draw comparisons between the strategies of Netflix and Amazon and analyse how they associate with the concepts of digital disruption and dis-­ intermediation. Chapter 9 takes the analysis of Chap. 8 further to explore how circumstances of gatekeepers such as sales agents and distributors are changing, and how they are responding to those changes. In addition, I will demonstrate that a new type of gatekeeper, so-called content aggregators, have appeared in the distribution business to enable access for films to VOD platforms. Through a discussion of these various types of gatekeepers, I put several limitations on claims of digital disruption and dis-intermediation. Having analysed how powerful companies such as Netflix and Amazon associate with claims of digital disruption and dis-intermediation, it is also important to acknowledge that such processes are associated with smaller companies at the specialised, indie end of the market. In Chap. 10, I focus on the perspective of small-scale, stand-alone producers in the UK, who are experiencing serious difficulties in terms of generating sufficient value for films through conventional distribution arrangements and release strategies. My analysis demonstrates that specialised independent distributors increasingly recognise that new strategies are needed to generate more value for their films, such as day-and-date, whereby films are simultaneously released in cinemas and online. Further, because it is not always possible for small-scale, stand-alone films to  work with a distributor, I demonstrate that some producers are experimenting with an alternative distribution approach, ‘direct distribution’. I compare conventional distribution arrangements with direct distribution arrangements in order to analyse the involvement of gatekeepers such as sales agents, distributors and content aggregators. Against claims of dis-intermediation, I argue that the involvement of gatekeepers remains critical to organise distribution. Overall, what will become clear in the various sections of this book is that distribution is the point where important decisions about films are made, where gatekeepers negotiate access to international markets, and

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where they exert power and control over the sort of access given to specific films. It is therefore important to understand film distribution as a process of gatekeeping.

References Anderson, C. (2006). The Long Tail: Why the Future of Business Is Selling Less or More. New York: Hyperion Books. Bielby, D. and Harrington, L. (2008). Global TV: Exporting Television and Culture in the World Market. New York: New York University Press. Birkinbine, B., Gomes, R. and Wasko, J. (Eds.). (2017). Global Media Giants. New York: Routledge. Bloore, P. (2013). The Screenplay Business: Managing Creativity and Script Development in the Film Industry. London: Routledge. Bondebjerg, I., Novrup Redvall, E. and Higson, A. (Eds.). (2015). European Cinema and Television: Cultural Policy and Everyday Life. London: Palgrave Macmillan. Bourdieu, P. (1984). Distinction: A Social Critique of the Judgment of Taste. Cambridge, MA: Harvard University Press. Caldwell, J. (2008). Production Culture: Industrial Reflexivity and Critical Practice in Film and Television. Durham: Duke University Press. Conor, B. (2014). Screenwriting: Creative Labor and Professional Practice. Andover: Routledge. Crisp, V. (2015). Pirates and Professionals: Film Distribution in the Digital Age. London: Palgrave Macmillan. Cunningham, S. and Silver, J. (2013). Screen Distribution and the New King Kongs of the Online World. Basingstoke: Palgrave Macmillan. Curtin, M., Holt, J. and Sanson, K. (Eds.). (2014). Distribution Revolution: Conversations About the Digital Future of Film and Television. Oakland: University of California Press. Curtin, M. and Sanson, K. (Eds.). (2016). Precarious Creativity: Global Media, Local Labor. Oakland: University of California Press. Dale, M. (1997). The Movie Game: The Film Business in Britain, Europe and America. London: Cassell. Deuze, M. and Prenger, M. (Eds.). (2019). Making Media: Production, Practices, and Professions. Amsterdam: Amsterdam University Press. DiMaggio, P. and Powell, W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, 48, 147–160. Finney, A. and Triana, E. (2015). The International Film Business: A Market Guide Beyond Hollywood. 2nd edn. London: Routledge.

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Focus (2017). World Film Market Trends. A Statistical Report Produced by The European Audiovisual Observatory for the Cannes Film Sales Market. Foster, P. and Ocejo, R. (2015). Brokerage, Mediation, and Social Networks in the Creative Industries. In: C. Jones, M. Lorenzen and J. Sapsed (Eds.), The Oxford Handbook of Creative Industries. Oxford: Oxford University Press, pp. 405–420. Freeman, M. (2016). Industrial Approaches to Media: A Methodological Gateway to Industry Studies. London: Palgrave Macmillan. German Films Service. (2017). Market Study German Films of the Number of Films Released in 2016  in the UK and Ireland, France, Germany, Belgium. [Online]. Available at: https://www.german-films.de/publications/marketstudies/ [Accessed 3 September 2017]. Gitlin, T. (1983). Inside Prime Time. New York: Pantheon Books. Gomery, D. (2005). The Hollywood Studio System: A History. New  York: St. Martin’s Press. Havens, T. (2006). Global Television Marketplace. London: British Film Institute. Havens, T. (2011). Inventing Universal Television: Restricted Access, Promotional Extravagance, and the Distribution of Value at Global Television Markets. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 145–168. Havens, T., Lotz, A. and Tinic, S. (2009). Critical Media Industry Studies: A Research Approach. Communication, Culture & Critique, 2, 234–253. Hesmondhalgh, D. (2013). The Cultural Industries. 3rd edn. London: Sage Publications. Holt, J. and Perren, A. (Eds.). (2009). Media Industries: History, Theory, and Method. Malden: Wiley-Blackwell. Holt, J. and Perren, A. (2019). Media Industries: A Decade in Review. In: M. Deuze and M. Prenger (Eds.), Making Media: Production, Practices, and Professions. Amsterdam: Amsterdam University Press, pp. 31–44. Holt, J. and Sanson, K. (Eds.). (2014). Connected Viewing: Selling, Streaming, & Sharing Media in the Digital Era. New York: Routledge. Hoskins, C., McFadyen, S. and Finn, A. (1997). Global Television and Film: An Introduction to the Economics of the Business. Oxford: Oxford University Press. Iordanova, D. (2012). Digital Disruption: Technological Innovation and Global Film Circulation. In: D.  Iordanova and S.  Cunningham (Eds.), Digital Disruption: Cinema Moves On-line. St. Andrews: St. Andrews Film Studies, pp. 1–33. Iordanova, D. and Cunningham, S. (Eds.). (2012). Digital Disruption: Cinema Moves On-line. St. Andrews: St. Andrews Film Studies.

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Knight, J. and Thomas, P. (2011). Reaching Audiences: Distribution and Promotion of Alternative Moving Image. Bristol: Intellect. Kuipers, G. (2014). Ethnographic Research and Cultural Intermediaries. In: J. Smith Maguire and J. Matthews (Eds.), The Cultural Intermediaries Reader. London: Sage Publications, pp. 52–64. Lampel, J. and Meyer, A. (2008). Field-Configuring Events as Structuring Mechanisms: How Conferences, Ceremonies, and Trade Shows Constitute New Technologies, Industries, and Markets. Journal of Management Studies, 45(6), 1025–1035. Lobato, R. (2007). Subcinema: Theorizing Marginal Film Distribution. Limina, 13, 113–120. Lobato, R. and Thomas, J. (2015). The Informal Media Economy. Cambridge: Polity. Lotz, A. (2009). Industry-level Studies and the Contributions of Gitlin’s Inside Prime Time. In: V. Mayer, M. Banks and J. Caldwell (Eds.), Production Studies: Cultural Studies of Media Industries. New York: Routledge, pp. 25–38. Mayer, V. (2011). Below the Line: Producers and Production Studies in the New Television Economy. Durham: Duke University Press. McDonald, K. and Smith-Rowsey, D. (2016). Introduction. In: K. McDonald and D. Smith-Rowsey (Eds.), The Netflix Effect: Technology and Entertainment in the 21st Century. New York: Bloomsbury Academic, pp. 1–13. McDonald, P., Carman, E., Hoyt, E. and Drake, P. (Eds.). (2015). Hollywood and the Law. London: British Film Institute. Moeran, B. (2011). The Book Fair as a Tournament of Values. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 119–144. Moeran, B. and Pedersen, J. (Eds.). (2011). Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press. Nikdel, E. (2017). Online Distribution and the Relocation of Specialised Film. University of Southampton, Faculty of Humanities, Unpublished PhD thesis. Perren, A. (2013). Rethinking Distribution for the Future of Media Industry Studies. Cinema Journal, 52(3), 165–171. Peterson, R. and Anand, N. (2004). The Production of Culture Perspective. Annual Review of Sociology, 30, 311–344. Ross, M. (2010). South American Cinematic Culture: Policy, Production, Distribution and Exhibition. Newcastle: Cambridge Scholars Publishing. Roussel, V. (2017). Representing Talent: Hollywood Agents and the Making of Movies. Chicago: University of Chicago Press. Shoemaker, P. and Vos, T. (2009). Gatekeeping Theory. New York: Routledge. Smits, R. and Nikdel, E.W. (2018). Beyond Netflix and Amazon: MUBI and the Curation of On-Demand Film. Studies in European Cinema, 16(1), pp. 22–37.

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Trumpbour, J. (2002). Selling Hollywood to the World: US and European Struggles for Mastery of the Global Film Industry, 1920–1950. Cambridge: Cambridge University Press. Tryon, C. (2013). On-Demand Culture: Digital Delivery and the Future of Movies. New Brunswick: Rutgers University Press. Ulin, J. (2013). The Business of Media Distribution: Monetizing Film, TV and Video Content in an Online World. 2nd edn. Burlington: Focal Press.

PART I

Film Sales Markets

This first part of this monograph focuses on the important role of film sales markets in the distribution business. I will survey the historical development of those markets to analyse how they have shaped and structured distribution activities and the role they have played over time in supporting and enhancing the distribution of films to international markets. I will also analyse sales markets in relation to processes of value creation, with the purpose of demonstrating how sales agents introduce and promote films to distributors at such markets.

CHAPTER 2

The Historical Development of Film Sales Markets

2.1   Sales Markets and Film Distribution Film sales markets are crucial events for the film distribution business because they offer a self-contained environment within which film professionals can conduct their business. Such sales markets are often organised as part of important international film festivals. Over time, they have become meeting places at which a large number of films are introduced and promoted by sales agents to distributors and other buyers, such as television broadcasters, film festival programmers and, since more recently, online VOD providers. Films on offer at sales markets range from low-­ budget films to medium-budget films and occasionally even big-budget, mainstream films. Although the majority of the films at sales markets fall into the low-budget category, most of the attention is concentrated around a limited number of much more high-profile films. The inclusion of such films in sales markets has a positive impact on the status and reputation of these events, making them attractive to private equity firms, financiers, large independent companies and even major Hollywood studios as both producers and distributors. Because film sales markets are often organised as part of international film festivals, the role of sales markets is often acknowledged in scholarship focusing on film festivals, where their function is analysed in the context of such festivals (Iordanova and Rhyne 2009; Iordanova and Cheung 2011; Ruoff 2012). However, beyond film festival studies, the role of film sales © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_2

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markets has been largely ignored in academic discourse. What discussions there are about sales markets are predominantly based on industry sources such as trade press articles and industry reports, and there is as yet no comprehensive analysis from an academic perspective. There is thus still much to be analysed in terms of how sales markets operate in the film distribution business, and how they have developed historically. Film sales markets exist in different configurations and they are organised at different times and locations throughout the year. Sales markets such as Le Marché du Film in Cannes (France) and the European Film Market in Berlin (Germany) are formal integrated sections of major international film festivals. They offer sales and distribution professionals the opportunity to conduct business from temporary offices in official market venues or in hotels where sales companies set up temporary offices. Sales markets at other international festivals like Toronto (Canada), Sundance (US) and Venice (Italy) are less formal, but they are still places where distribution deals are negotiated. There are also sales markets without a strong affiliation to or partnership with a major international festival. The Mercato Internazionale Filme E Documentario (MIFED) in Milan, which was one of the key sales markets in the past, is a good example in this respect. While MIFED established loose partnerships with various smaller festivals, the sales market was not formally integrated with those festivals. Similarly, the American Film Market (AFM) in Santa Monica (Los Angeles) has operated independently for more than 20 years before it established a partnership with the American Film Institute Festival (AFI Fest) in Los Angeles in 2004. This chapter offers a historical account of the role played by sales markets in the distribution business. Sales markets have changed in various ways since the late 1950s. They started as simple, low-key events, but gradually expanded in size and number, attracting more industry participants and media attention, and thus becoming increasingly important events where films are introduced and promoted to international distributors. As a result, they have shaped sales and distribution arrangements in the global marketplace for films. The focus will be firmly on the biggest and most prestigious sales markets—Cannes, MIFED, AFM and Berlin—to analyse their development in various periods between the late 1950s and the present. Foregrounding those key markets reveals their contribution to an expanding business environment for sales and distribution professionals, raising the following questions about their historical development: when did these various sales

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markets develop into key events? How have they developed subsequently? To what extent have political, technological and economic influences impacted on their development? And what role have they played over time in supporting and enhancing the distribution of films to international markets?

2.2   The First Sales Markets Film festivals and sales markets have historically been important meeting places for the film distribution community to watch films and negotiate distribution deals. However, an expanding business environment for the distribution community has been constructed with the development of a few key sales markets. The Cannes sales market in France and the MIFED sales market in Italy marked the beginning of this development. According to trade observer McCarthy (1997), the Cannes sales market started as a simple and low-key event in one screening room of the film festival in 1959. Although it did not really stand out from the film festival itself, it gradually expanded and became a marketplace for films that were of low interest to the festival audience. While Cannes had established the reputation of a prestigious, art-house festival, showing a carefully curated selection of films, the sales market offered opportunities for a much greater range of films. Because Cannes attracted an increasing number of sales and distributors professionals with an interest in the sales market only, festival observers were arguing that the reputation of the festival was undermined by the sales market. Other festival observers took a more positive stance, arguing that the sales market enabled access for films with traditionally limited distribution opportunities. McCarthy (1997) describes the development of sales markets in relation to a more economically driven independent film industry: In philosophical terms, the introduction of the market was a frank admission of the unavoidably two-pronged nature of motion pictures themselves, as an art form that, more than any other, requires significant economic support to survive.

McCarthy is thus arguing that the development of the Cannes sales markets could be supportive to the economic state of the film industry. The terms ‘marketplace’ and ‘bazaar’ were often used to describe the business activity at the Cannes sales market, since films on offer were no longer

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exclusively associated with the notion of cinema as a form of high art. The Cannes sales market was a marketplace for different types of films: low-­ brow and high-brow, low-budget and high-budget, old and new. In addition to Cannes, the MIFED sales market in Milan developed as another important meeting place for sales and distribution professionals. MIFED, which started in 1960, established a distinctive market profile. Rather than being a part of a festival, it was a stand-alone market designed for sales and distribution professionals. Films were introduced and promoted to distributors under different circumstances. While films selected for the Cannes festival could generate media exposure and word-of-mouth talk to support the sale of films in the Cannes sales market, films at MIFED were unable to benefit from this symbiotic relationship between festivals and sales markets. MIFED’s orientation on content was also different, since the market was designed for sales and distribution companies in the film and television industries. They strategically responded to the fact that some companies were already combining film and television activities in this period. A Variety article demonstrates that the first edition in April 1960 attracted 170 representatives from some 28 countries around the world, and already operated with eight screening rooms where distributors and other buyers watched films (Variety 1960). Sales activity was taking place on the sales floor of the market venue, the Milan fair grounds, but business meetings were also organised in hotels and restaurants in the locality. It is thus clear that MIFED started as a relatively sizeable market. The notion of a sales market as a marketplace also applies to MIFED, since it was established with the objective of bringing together the sales and distribution community. In terms of the development of the Cannes and MIFED sales markets, McCarthy (1997) notes that the Cannes sales market remained a relatively simple and low-key event throughout the 1960s, but developed into a more vibrant marketplace for film professionals in the late 1970s. The market “finally took on a life of its own as a teeming cinematic bazaar for buyers and sellers, as well as a place for buffs to search for diamonds in the rough” (1997: 3). Similarly, MIFED had attracted an increasing number of sales and distribution companies by the late 1970s. Together, they positioned themselves as the most important sales markets on the industry calendar, with MIFED taking place in the spring and fall of every year, and Cannes in May. In addition to such sales markets, there were also more informal sales events. In particular, the four-day ‘La Costa international film conference’

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in Los Angeles was an important event in the late 1970s. This event was organised by the US production companies Lorimar and Melvin Simon Productions to introduce their film collections to the international distribution community. According to an article in Boxoffice, 125 distributors and exhibitors from more than 80 countries attended the event in 1979. Lorimar and Melvin Simon Productions showed footage of films in production as well as finished films, and they organised marketing presentations for those films (Boxoffice 1979: 9). The fact that the La Costa event was attended by distributors and exhibitors from countries worldwide is illustrative for the rapid development of the distribution business in the 1970s. Selling Films Internationally In order to understand the gradual growth of sales markets in the 1960s and 1970s in more depth, I will analyse how relationships between production companies and sales agents have developed throughout this period. The starting point for this analysis is the relationship between Hollywood studios and independent companies. Academic scholarship has provided important insights into Hollywood’s global operations in the 1960s (Neale and Smith 1998; Cook 2000; Maltby 2003). The process of selling films internationally has been associated with their integrated production and distribution operations in such studies. The distribution market for films in the US and Europe was largely dominated by an oligopoly of Hollywood studios, who were able to control the distribution of in-house productions films through their global distribution networks. In order to secure distribution for their films, they established their own distribution offices in some of the biggest markets, while they developed partnerships with independent distributors in other markets. Such partnerships were usually output deals with independent distributors in specific markets, involving a commitment from distributors to release their films. In addition, the Hollywood studios acquired films from smaller, stand-alone producers in the global marketplace with the purpose of distributing through their global distribution networks. Independent producers, in turn, were often reliant on such distribution support from the studios to be able to finance their films. Richard Maltby (2003: 170), for instance, notes that producers in the US market had little control over their films in this period: “Most producers would be more accurately classified as ‘semi-independent,’

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since the precondition of their movies’ production was a guarantee of distribution, under terms defined by the major distributor.” The Hollywood studios were able to exert control over distribution through such global distribution networks. In addition to the Hollywood studios, there were several powerful studios in European countries, such as The Rank Organisation in the UK and Pathé and Gaumont in France. They used their distribution networks particularly for their in-house productions rather than acquisitions in the global marketplace. While they were distributors in their home markets, they would typically rely on output deals with Hollywood studios or independent distributors to distribute in-house productions in international markets. Only The Rank Organisation had also established their own distribution offices in countries such as Argentina, Brazil, Chile, Colombia, Venezuela and Mexico in Latin America and in Sweden and Germany in Europe in the 1960s, as demonstrated in the trade press (Variety 1969). For their distribution offices in Latin America, they established output deals with international production companies, such as Cinema Center Films in the US, to secure distribution rights of other international films in addition to their in-house productions. In an interview with Bobby Meyers, an experienced sales and distribution executive for US production companies Lorimar Distribution and National General Pictures in the 1960s and 1970s, he confirmed that Hollywood studios as well as some European studios were dominant forces in the distribution business. However, he also recalled that the structure of the distribution business gradually changed with the development of other non-Hollywood studios that began to produce medium-­ budget and big-budget films in the 1960s. In particular, he acknowledged the influence of the pioneering independent producer Samuel Bronston in Spain and sales executive Milton Goldstein. Together, they developed historical dramas and westerns such as the $6.25 million production El Cid (1961), the $17  million production 55 Days at Peking (1963), the $19  million production The Fall of the Roman Empire (1964) and the $9 million production Circus World (1964). Goldstein worked previously for the Hollywood studio Paramount Pictures, where he experienced first-­ hand how economic value for such films could be established. Critically, he prioritised individual distribution deals with different distributors around the world over multi-territory deals with Hollywood studios. According to IMDb (2016), El Cid and 55 Days at Peking were distributed by the non-Hollywood distributor Allied Artists Pictures in the US

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market and by non-Hollywood distributors in other international markets, such as The Rank Organisation in the UK market. In the case of The Fall of the Roman Empire and Circus World, they were distributed by Paramount Pictures in the US market but by non-Hollywood distributors in other international markets. Mini-Majors Several production companies in the US market followed Bronston’s example by starting to invest in medium-budget and high-budget films. David Cook (2000: 331–333) explains that two large American television networks, CBS and ABC, expanded their businesses and entered the film industry. In the period between 1967 and 1973, CBS produced films through its production company Cinema Center Films, while the experienced sales executive Milton Goldstein was recruited to sell those films internationally. For instance, they produced the $15 million western Little Big Man (1970) and the $5.5 million drama The Boys in the Band (1970). In addition, ABC produced films through Cinerama Productions and other subsidiary companies. Together, they became known as mini-majors in the US market, positioning themselves between Hollywood studios on the one hand and smaller independent producers and distributors on the other (Cook 2000: 322). More importantly, these US mini-majors produced such films for a global audience and they were able to maintain control over international sales. They distributed their in-house production through their own distribution offices in the US market, and they sold their films to other independent distributors in international markets. Cook (2000: 331) underscores the involvement of CBS and ABC in the independent film business: “In each case, a television network entered feature film production with the idea of supplying its own prime-time movie programming in addition to distributing its product to theaters through independent exchanges.” Neither CBS nor ABC were able to maintain their reputation as mini-­ majors for more than a few years, but other major independent production companies, such as De Laurentiis Entertainment Group and Carolco Pictures, replaced them and established offices in Hollywood in the 1970s. Sheldon Hall and Steve Neale (2010: 179) note that these new mini-­ majors were also known for their orientation on films designed for global audiences, and those companies developed similar distribution strategies

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to CBS and ABC. Thus, they recognised the importance of international sales and established small, in-house sales departments to develop direct relationships with distributors in international markets. These new mini-majors began to employ a pre-sales distribution model for their films, whereby the distribution rights of films were sold to distributors in a pre-production stage, before the start of shooting. Such pre-sale deals became an important means to finance medium-budget and high-budget films. Thus, in addition to private investment and other sources of financing for films, mini-majors turned to the distribution business to secure additional financing and raise production budgets. While Samuel Bronston and others were already developing the pre-sale model in the 1960s, such deals became much more common in the 1970s. Frederick Wasser (2002: 354) notes that banking corporations had an important role to play in establishing such pre-sale deals because they provided advanced financing against discounted pre-sale contracts. In particular, the Dutch banker Frans Afman is often recognised as a pioneer in the 1970s in this respect. He established a close relationship with De Laurentiis Entertainment Group in the early 1970s on behalf of Slavenberg Bank in the Netherlands, but developed his network further in subsequent years to help finance medium-budget and high-budget films, as trade observer Borsten (1985) notes. For instance, he worked with the well-known producer Alexander Salkind to finance the $55  million superhero film Superman (1978). The pre-sales arrangements established with the support of banking corporations enabled mini-majors to produce films on more substantial budgets. This development gradually impacted on existing power dynamics between Hollywood studios and independent companies in the distribution business, with mini-majors taking a position in the middle-ground. The effects of this development were also noticeable at the sales markets. While independent distributors played an increasingly important role in the financing and distribution of films of mini-majors, Cannes and MIFED were the most important meeting places where they negotiated deals with the sales teams of mini-majors in the late 1970s.

2.3   The Third Sales Market Given the development and influence of mini-majors and other US independent production companies on the international film business, they were contemplating the possibility of establishing a third key sales market

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in the US market. This made a great deal of sense given the  value and popularity of the US film industry. Further, some smaller sales events were already successfully organised by production companies in Los Angeles, such as the La Costa event. A first step was taken when mini-majors and other independent production companies in the US market joined forces and started the American Film Marketing Association (AFMA) in 1980, with the purpose of protecting the interests of US companies in the global film business.1 One year later, in 1981, the American Film Market (AFM) in Los Angeles was formally established by AFMA. The AFM became the third key sales market  for  the sales and distribution community on the industry calendar (Fig. 2.1). Trade observers Saperstein and Klady (1995) note that the AFM was also established as a response to the dominant role of the Cannes and MIFED as European sales markets. For instance, American companies complained about expensive rental prices for hotel suites and stands at the Cannes sales market. As a result, they asked themselves: “Why should we spend all that money there and keep being taken advantage of?” (Saperstein and Klady 1995). Given such political tensions, the first edition of the AFM was organised for AFMA members only, and thus deliberately excluded European sales agents from participation. A relatively small number of 34 US sales companies participated in the market, with amongst them powerful companies such as ABC, Carolco, Hemdale, Samuel Goldwyn and Overseas. The AFM became more accessible in subsequent years, when European sales companies were also  invited to participate. Like MIFED, the AFM was established as a stand-alone sales market, rather than being a part of a festival. The experienced distribution executive Bobby Meyers notes: “We wanted to combine the glamour of Hollywood with the efficiency of Milan” (quoted in Saperstein and Klady 1995). According to Saperstein and Klady (1995), the AFM market attracted close to 1900 executives of distribution companies and other types of buyers in the mid-1980s. It is worth noting that such companies sent either one or two executives to the sales markets, and sometimes more. The  In 2004, AFMA became part of a newly established global trade organisation in 2004, called Independent Film & Television Alliance. 1

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Fig. 2.1  The poster of the first American Film Market in 1981. Courtesy of the Independent Film & Television Alliance®

number of distribution companies and other types of buyers attending the sales market is thus much lower, between 500 and 1000 companies approximately. Other trade press journalists reported that attendance figures at MIFED and Cannes were roughly the same in this period. The three sales markets were organised in joint coordination at different times throughout the year, with the AFM taking place in February, Cannes in May and MIFED in October. This newly recurrent pattern of three sales events each year contributed to the development of a more formalised distribution environment for the sales and distribution community, with films being introduced at specific times throughout the year.

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Glory Days Wasser (2002) notes that the three sales markets were also affected by the growth of the home video and television markets since the 1980s. He demonstrates that home video and the new forms of television developed into lucrative additional distribution windows. Traditionally, film has been a medium that was consumed primarily by audiences in cinemas and other public spaces. Audiences have been able to access a limited selection of films from their private homes in the early stages of cable television from the 1950s, but cable television would remain a niche market for films for several decades. The development of home video and cable and satellite television in the early 1980s, however, would have a dramatic impact on the film industry. Slowly but surely, films released in cinemas were able to generate significant additional revenues in the home video and television markets. In particular, the demand for films in the home video market was enormous. Gatekeepers such as sales agents and distributors were critical in enabling access for a wide variety of films to home video audiences. Films with the potential to attract cinema audiences remained a priority for distributors, but they also invested in other types of films in order to match the demand for films in the home video market. As a result, low-budget films became more attractive propositions at the sales markets, and they were often acquired by distributors for a release in the home video market only. Some of what might once have been called B-films were now specifically designed for the home video market. Alongside existing distribution companies, many new independent distribution companies entered the film business in this period, with some of them focusing specifically on the home video market. The competition for video titles was particularly fierce in the early stages of the home video market, and some distributors developed aggressive acquisition strategies. The former sales executive of US video distributor Vestron, David Whitten, recalls their strategy at the AFM in 1984, where they “would enter on the first day and put in pre-­ emptive bids on every film that still had open video rights. Other distributors were forced to increase their own bids or stay out of the game” (quoted in Wasser 2002: 120). Such strategies were illustrative for the development of the video market. Wasser (2002: 122) notes that video sales accounted for 60% of all sales at the AFM in 1985, and similar figures were reported at MIFED.

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The home video market helped to rejuvenate the international film business, which explains why producers and distributors often nostalgically refer to this period as the glory days. As Mike Goodridge (2014), who observed such developments as a trade journalist for Screen International, put it in an interview: “The video market in the 1980s was so lucrative. Video provided these extraordinary cushions to the business, and this was the birth of ancillary markets. Yes, there was television sales too.” Such market developments were also having an impact on pre-sale arrangements. As described above, pre-sales were particularly common for medium-budget and high-budget films in the late 1970s. However, because low-budget films increasingly secured international distribution, pre-sales became an important form of film financing for other types of films, with producers claiming that pre-sales put some projects into profit before the start of production. Goodridge (2014) draws a comparison between the state of the distribution business in the 1980s and the present: Those were the glory days. That is when you could make a 100% of your budget through pre-sales in a couple of days. It is a terrible sadness that you cannot do that so easily today. There is less money floating around now and the business environment is much more corporate, more institutionalised.

Given this period of economic prosperity in the 1980s, Goodridge (2014) also notes that promotional activity was an important aspect of the film sales process at sales markets. In particular, Cannes was an important sales market where promotional activity was effectively combined with market intelligence. Some of the biggest producers used the Cannes festival to create enormous excitement around their films, and were taking advantage of such exposure while selling these films at the sales market. A few major producers established a reputation as ‘movie moguls’ by organising special promotional events at Cannes. Goodridge (2014) underscores the presence of such movie moguls in this period: All those classic showman came to Cannes. I mean Cannes was the greatest showman place: you would host huge events, you would bring your movie stars to the festival and you would organise big press conferences. You could sell the market out in ways MIFED and AFM could only do on a much smaller level. It was so much fun in the 1980s, it was a big world with people like Dino de Laurentiis [De Laurentiis Entertainment Group], Yoram Globus and Menahem Golan [The Cannon Group], Mario Kassar and

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Andy Vajna [Carolco Pictures], and others like Alexander Salkind, all those wonderful colourful characters.

Promotional events organised by these self-proclaimed movie moguls were thus characteristic of the flourishing business in the mid1980s, and spoke to a need to impress and establish reputations, with aggressive marketing campaigns. For instance, Andrew Yule (1987: 60) notes that the Managing Directors of the Cannon Film Group, Yoram Globus and Menahem Golan, organised some spectacular events at Cannes: “An example of Cannon’s corporate hustling was the $500,000 they laid out in Cannes in the spring of 1984 on a gigantic sales and promotion campaign, culminating in a lavish gala ball at the Casino.” Such promotional activity created an idyllic atmosphere for the buying and selling of films. While the sales and distribution community was taking advantage of the rapid development of the video and television markets in the 1980s, it is worth noting that both markets remained important revenue windows for the film business in the years and decades that followed up to the present. Paul McDonald (2007: 150) notes that home video had grown into the biggest revenue market for films in the mid-1990s. Several technological developments have consolidated such growth, such as the introduction of DVDs in the late 1990s, Blu-rays in the mid-2000s and online VOD viewing in the late 2000s. The key sales markets became increasingly important as events where films were introduced and promoted to international distributors throughout this period of change and growth, as I will demonstrate in subsequent sections of this chapter. High-Profile Sales Companies The flourishing state of the film business in the 1980s resulted in increasing opportunities to sell films internationally. Traditionally, the sales community comprised a small group of powerful studios and mini-majors with in-house sales departments on the one hand, and a bigger group of much smaller sales organisations and individual salespersons on the other hand. These smaller sales organisations were typically dealing with low-budget, independent films with modest opportunities in terms of international sales. However, a new group of more high-profile sales companies appeared in the film business. They developed relationships with independent production companies to represent their films to distributors in international

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markets. In particular, they were representing medium-budget and high-­ budget films of independent production companies, for which they competed against studios and mini-majors with in-house sales departments and distribution offices. These high-profile sales companies emerged more or less at the time that the demand for films in international markets began to increase. One of the first such companies to emerge was the Los Angeles-based company Producers Sales Organization (PSO), founded by sales veteran Mark Damon in 1978. Damon co-authored a book in which he informs about the business model that he developed for PSO (Schreyer and Damon 2008).2 He notes that, while making a career as a film actor in Italy, he experienced first-hand that there was an opportunity to generate more value from US films in international markets, and therefore decided to establish PSO. Damon was inspired by the fact that pre-sale deals provided opportunities to finance and distribute films through independent distributors. According to Damon, there was an important underlying economic logic, since he argued that distribution through independent distributors in markets outside the US could be more lucrative for film producers than distribution through Hollywood studios. Thus, while approaching independent producers, he emphasised the economic need for both sales agents and independent distributors to make films as successful as possible: It’s a win-win all around. You want your movie to be a hit. So do the foreign distributors who license it from us because that’s how they earn back the money they advance for it. And PSO really wants your film to be a hit because if it goes into overages, that’s how we make most of our money. (Schreyer and Damon 2008: 48)

Because independent distributors paid distribution fees to acquire distribution rights, Damon argued that they were prepared to work harder for their films than Hollywood distributors in international markets. While US productions would normally generate most of its economic value from the domestic US market, Damon was convinced that it was possible to generate much more economic value from international markets. For 2  Journalist Linda Schreyer and Mark Damon co-authored a book about Damon’s career as a film actor and film business professional, but the book is actually written by Schreyer, recounting many of Damon’s experiences and including some quotations from him. Damon is currently the CEO of the sales company Foresight Unlimited, which specialises in the international sales of high-profile American films.

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instance, for the $6.5 million comedy The Choirboys (1977), he demonstrated to distributors that international markets accounted for 75% of revenues, while the US market accounted for 25%. He therefore consistently stressed that independent producers would be better off through independent distributors in international markets, with a relative share of distribution fees and profits flowing back to them. PSO would become an important sales company in the early 1980s. They  sold US productions such as the $30  million action crime-drama Once Upon a Time in America (1984), the $58 million crime-drama The Cotton Club (1984) and the $16  million crime-drama Prizzi’s Honor (1985) to distributors. In most cases, their films were distributed by Hollywood studio distributors in the US and by independent distributors in international markets. For instance, Once Upon a Time in America was distributed by Warner Bros in the US market and by independent distributors such as Concorde in the Netherlands and Titanus in Italy. Because PSO distributed such high-profile US productions to independent distributors in international markets, they have been credited as a pioneering company in the business of international sales, with other high-profile sales companies in the US and Europe following in the 1980s and 1990s. These high-profile sales companies were also participating in the sales markets, as trade journalist Dionne (1983) observed at the Cannes market in 1983: “A growing source of business at Cannes is the role of people such as Irvin Shapiro [CEO of the sales company Films Around The World] and Mark Damon. Both Mr. Shapiro and Mr. Damon serve as kinds of brokers between American film producers and foreign distributors.” Dionne identified Damon and Shapiro as part of a growing group of high-profile sales agents at Cannes that undermined the dominant position of Hollywood studios in the distribution business. In addition to the development of mini-majors in the late 1970s, this new group of high-­ profile sales agents reinforced the emergence of companies positioned in the middle-ground. Hollywood studios remained powerful, but a high-­ end market for independent companies gradually developed in the 1980s.

2.4   Politics and Competition Between Sales Markets In order to analyse the further development of the AFM, Cannes and MIFED sales markets, I will first consider the political role of the American trade association AFMA in the distribution business. As noted above,

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AFMA was partly established as a response to the dominant role of the Cannes and MIFED sales markets in Europe. In particular, US sales companies were complaining about relatively high costs for participation in the Cannes and MIFED sales markets. AFMA’s role was to protect the interest of those companies and to exert more political influence over the distribution business more generally. Their first response, in this respect, involved passive participation in the Cannes market in 1981, as trade observers Saperstein and Klady (1995) note: There was something of a gentleman’s agreement among the U.S. sellers to keep a very low profile at the European markets, specifically at Cannes. The companies agreed not to screen there, not to advertise and not to throw any lavish parties. The idea was to send a message that buyers looking for American indie product would have to travel to Hollywood to get it.

The second response followed about eight years later in 1989, when AFMA turned its attention to MIFED. One important issue involved high costs for participation in the sales market, but sales companies also complained about the fact that business was not always satisfying, since some of them were expecting to secure more distribution deals at MIFED. With such  issues in mind, some AFMA members began to put serious effort into organising another AFM market in the October slot of the annual industry calendar, which was about to take place in direct competition with MIFED. Despite their efforts, “the association’s officials at that time did not think it was a wise move. They set up a voting procedure that barely saved Mifed”, as demonstrated in a Variety article (Variety Staff 1991). Two years later, another attempt to derail the MIFED market was supported by more AFMA members: “The desire to dump Mifed was so strong this time among the smaller companies that AFMA officers did not try to turn on a red light” (Variety Staff 1991). In addition to their market in February 1991, AFMA organised another market in October 1991 that coincided with  MIFED.  This decision did  have an impact on the film ­distribution business more generally, essentially dividing the sales community into one group that participated in the AFM sales market and another group that participated in the MIFED sales market: The AFMA is well aware of the hornet’s nest it stirred up in Europe scheduling a second market in Los Angeles in late October. But the organization is

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confident it will win converts for the added film bazaar once buyers and sellers experience the pleasures of balmy Santa Monica and calculate the effects of a less costly trade event. (Variety Staff 1991)

This hostile response generated much commotion amongst the sales and distribution community in the months prior to both events. First, MIFED’s initial plan was to organise their market one week earlier to provide sales and distribution professionals with the opportunity to visit MIFED as well as the AFM, but they ultimately decided to  commit to their original time frame in direct competition with AFM.  Second, in order to attract sales companies, MIFED and AFM were offering large discounts to industry professionals for office space and hotel accommodation. Third, trade associations and national film organisations played an important part in this conflict. Trade observer Young (1991) notes that AFMA relied largely on the support of their own members, especially those from the US, while MIFED relied largely on relationships with European trade associations. “Mifed is not going to roll over and play dead,” said Fred Sidon of the Princeton Overseas Consulting Group, which represents the Fiera di Milano, Mifed’s parent body. “Solidarity is building in Europe. They’re going to the American Film Market in February, but they’ll be coming to Mifed in October.” (quoted in Young 1991) Mifed, with the assistance of the Fiera di Milano, the Italian film industry and the Italian government, has been busy marshaling support among Europeans. Industry bodies—such as Anica, the German Film Union and groups from the U.K. and France—are said to have indicated they will not attend AFM in the fall. (Young 1991)

Because of such tensions, trade journalist Alexander (1991) notes that the AFM market in October 1991 was unsuccessful, with less than 100 sales organisations participating in the AFM sales market in October, compared to more than 210 sales companies in the sales market in ­ February. According to trade observer Hazelton (1992), AFMA immediately evaluated the decision to organise a second market in October: “The members voted almost unanimously at the start of this market not to repeat last year’s experimental October AFM.” MIFED also experienced the effects of the AFM autumn market, with a decrease in the number of US sales companies. However, attendance figures at MIFED

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increased in the next year, as trade observers Lieb and Ilott (1992) demonstrate: “With hatchets buried after last years’s American Film Market– Mifed battle, Yanks have returned in strength, adding to a general atmosphere of optimism.” The London Screenings While the issue around expensive costs for participation in the sales markets remained a major concern, it is important to acknowledge that there were also several small-scale events where the sales and distribution community came together. One important event was the London Film Festival, which developed as a pre-event for MIFED, as trade observer Dawtrey notes (1995). The idea of inviting distributors to come to London before MIFED was initiated by the London-based sales company J&M Entertainment in 1985. Because they were disappointed in the screening facilities at MIFED, they organised their own exclusive screening event for a select group of distributors in London. Several other UK sales companies were developing similar strategies in the years that followed. Dawtrey (1995) notes that even some US sales companies decided to organise screenings in London. For instance, mini-majors such as New Line, Summit and Miramax were organising film screenings in the mid-1990s. For one week every fall, Le Meridien on Piccadilly [London] becomes the center of the international independent film distribution business. That’s the hotel where most of the significant theatrical movie buyers from around the world hole up just before the Mifed market in Milan, for a few informal days of viewing the latest completed pics and showreels from the leading British and American sales companies. (Dawtrey 1995) Initiated a decade ago in response to the deficient screening rooms and frenetic pace at Mifed, the pre-Mifed screenings in London have evolved organically into one of the most important and compulsory events of the independent film calendar—despite having no organization or even a proper name. (Dawtrey 1995)

The London Screenings, as this sales event became known eventually, offered an opportunity for those companies to introduce films in different stages of production. For instance, sales executive David Linda of Miramax noted that they were “screening promo reels” and “showing footage from

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as many films in production as possible” at the London Screenings (quoted in Dawtrey 1995). This was a strategy developed to generate attention for their films before the start of MIFED. However, participating in such additional sales events was certainly not affordable for all sales companies. Some sales companies decided to send only one or two executives, while more sales executives would be at MIFED. For instance, the Vice President of the American sales company Showcase Entertainment in 1997, Theresa Dokey, noted: “My staff and I decided that unless someone could concentrate on London, we wouldn’t do it,” says the international distribution VP, who’s going to London while the rest of her sales force attends Mipcom [a sales market for television content] and Mifed. “Frankly, if you do London like I’m doing, it costs a lot less than attending the other markets, so even if I make one sale, it’s worth it. I think when you’re out networking you can’t lose. Opportunities are always coming up. Also, if there are certain U.K. broadcasters we didn’t meet up with at Mipcom, I can meet them there.” (Quoted in Hardesty 1997)

Although Dokey notes that the London Screenings provided more flexibility in terms of networking and meeting specific companies at various markets throughout the year, the key sales markets remained the most important events for sales agents. Table  2.1 charts the importance of MIFED, AFM and Cannes in terms of the number of sales and distribution executives and the number of film screenings in 1997. It also provides insight in the overall number of industry participants in the market, since those markets were also attended by financiers, producers and representatives of public funding bodies. Table 2.1  Industry attendance at Cannes, AFM, MIFED and London in 1997 Sales market Cannes AFM MIFED London screenings

Sales executives 385 265 285 80

Distribution executives and other buyers

Total industry attendance

Total screenings

2023 1710 N/A 58

4466 5046 N/A N/A

481 356 N/A 174

Source: Adapted from Hardesty (1997). Numbers for Cannes, AFM and MIFED are official figures; numbers for the London Screenings are estimated by Hardesty

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The table demonstrates that between 250 and 400 sales executives and between 1700 and 2100 distribution executives participated in the key sales markets. These figures correspond broadly with numbers in the mid-­1980s, as I demonstrated before. The figures also show that attendance figures at the London Screenings were comparatively low, with only 80 sales executives and 58 distribution executives participating in 1997. Such insights confirm the dominance of the key sales markets in the distribution business, while also demonstrating that small-scale events had a role to play.

2.5   A Continuing Triad of Sales Markets? Competition between the key sales markets remained fierce in the early 2000s. There were ongoing discussions about more effective and efficient ways of conducting business throughout the year. This remained a serious issue, with some trade reporters speculating about the future. In 2002, for instance, Variety reporters envisaged the following scenario: Picture this: The American Film Market happens in October. Mifed and London Screenings get scrapped altogether. Berlin becomes a truly European Film Market or Toronto beefs up. Meanwhile, Cannes remains in its May slot and continues its reign as the mecca for buyers and sellers the world over. Officially, these changes may never happen. AFMA’s late-­ February market dates, for one, are fixed through 2004. But talk of changing the calendar is spreading throughout the corridors of the film markets. And it’s spreading fast. (Variety Staff 2002)

Somewhat ironically, this scenario whereby AFM would replace MIFED and London in the October slot of the industry calendar would become a reality in 2004. While MIFED was still a key sales market in the early 2000s, there are various reasons for the fact that it has come under increased pressure. First, trade reporter Rooney (2002) notes that there was a lack of screening space, with the effect that sales agents were not always able to show films to distributors and other buyers. Although MIFED responded to this issue by organising an extra day of pre-­ screenings, as their Market Director Elena Lloyd admitted that there was a demand for more screenings. Second, Rooney notes sales companies complained about the fact that they worked under time pressure, with a relatively short period of only four days for negotiations with distributors.

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Third, they complained about the market building and market facilities at MIFED, as trade observers Harris and Dunkley (2003) point out: It’s held in the labyrinthine corridors of the Fiera Milano, where cigarette smoke wins out over oxygen. While few sellers feel they can skip the early November event, Mifed is known less as a showcase for debuting A-list product and more as home for video and exploitation titles.

While Harris and Dunkley note that AFMA members were complaining about the circumstances within the market itself, they also highlight that MIFED became increasingly associated with low-budget, niche films, what they refer to as video or exploitation titles, rather than as a promotional platform for high-profile films. Fourth, as a consequence of such complaints, the London Screenings had grown into an increasingly popular sales event in the early 2000s. A growing number of sales companies felt that there was a need to participate in the London Screenings as well as MIFED. However, as established above, this was not affordable and manageable for some sales companies. Jane Barclay, Managing Director of the UK-based sales company Capitol Films, noted in 2002: “There is the cost factor, the time factor and no one can afford to be out of the office for two weeks. That is the immediate issue of banging this on the head once and for all” (quoted in Variety Staff 2002). Barclay therefore argued that sales and distribution organisations reached a point that they decided to participate in either the London Screenings or MIFED. Dominique Orsini, the General Secretary of the French sales association ADEF, reinforced this point: “The London Screenings had grown from a small gathering to screen three or four films into an unavoidable detour before going to Mifed, but it means doubling the money and energy spent” (quoted in Frater 2002). Given such growing frustrations, the idea was once again borne to organise the AFM sales market in direct competition with MIFED  in November. Trade journalist Goodridge (2003) notes that, with the knowledge in mind that their previous attempt to derail MIFED failed, AFM considered giving up their slot in February to organise the sales market in November. Two years later, AFMA confirmed that the AFM market in November 2004 would replace the AFM market in February 2005. AFMA also established a partnership with the Los Angeles-based festival, AFI Fest, providing opportunities for films in the AFM sales market to benefit from festival exposure.

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Trade observer Vivarelli (2004) notes  that MIFED responded to AFM’s decision by organising their sales market in October rather than in November, allowing industry professionals to attend MIFED as well as AFM. However, with comparatively few American and UK sellers attending MIFED in 2004, and overall attendance numbers decreasing by almost 50%, MIFED was no longer able to sustain its dominant position. While MIFED explored various opportunities to prolong its existence, including organising a combined market with Venice, the demise of MIFED became a reality in 2004. Looking beyond AFM’s November slot on the industry calendar, further implications of this dramatic change became clear. Because the AFM gave up the February slot in 2005, the Cannes sales market in May became even more important, as noted by Nan Wong, General Manager of the sales company Intercontinental Film Distributors: “There should be quite a lot of completed product at Cannes because it’s been almost half a year since the last big market” (quoted in Minns 2005). Despite the desire for only two key sales markets in the film distribution business, it was the EFM sales market,  organised as part  of the Berlin International Film Festival, that took advantage of the fact that the AFM  gave up its slot in February. Industry attendance at the EFM in February 2005 increased from 3500 in 2004 to 4284, and trade reporters noted that the EFM was “busier than ever before”, with an increase in distribution deals (Screen International Staff 2005). Despite such growth, the EFM was a small sales market compared to Cannes and AFM in 2005. In fact, Cannes and AFM had developed rapidly in the period between 1997 and 2005, with industry attendance at Cannes increasing from 4466 to 9476, and industry attendance at AFM increasing from 4466 to 8014. The dynamics between those sales markets, however, would change in the years that followed. EFM became the third key sales market, as I will demonstrate in the next section.

2.6   The Further Development of the Key Sales Markets Having analysed how political tensions have impacted on MIFED, I will now demonstrate how Cannes, AFM and EFM have developed from 2005 onwards. I will inform about the number of trade exhibitors and industry participants at sales markets in order to understand how they relate to each

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other in terms of size and popularity. The term trade exhibitors is employed to refer to sales companies as well as national film agencies. In terms of national film agencies, they offer space to small sales organisations and other film organisations from their countries. They are included in the figures provided by Cannes, Berlin and AFM because they are also working from exhibition stands. The number of trade exhibitors are based on companies participating in the sales markets rather than individual sales executives. In terms of the development of the sales markets, Figs. 2.2 and 2.3 demonstrate that Berlin established rapid growth in the period between 2005 and 2008. While the number of trade exhibitors increased from 165 to 430, this already exceeded the number of trade exhibitors at the AFM. EFM would continue to attract close to 430 trade exhibitors in the years that followed up to 2012. The number of industry participants at the EFM increased from 4284 in 2005, to 6443 in 2008, to 7749 in 2012. EFM reached roughly the same numbers as the AFM in 2012. Cannes, on the other hand, attracted more trade exhibitors and industry participants than EFM and AFM in the period between 2005 and 2012. Their number of trade exhibitors increased from 486 in 2005, to 610 in 2008, to 883 in 2012; while the number of The number of trade exhibitor organisations 1400 1200 1000 800 600 400 200 0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cannes

AFM

EFM

Fig. 2.2  Trade exhibitor organisations participating in Cannes, AFM and Berlin, 2005–2014. Source: Figures are collated from the Cannes, AFM and Berlin sales markets (http://www.marchedufilm.com/en; http://www.americanfilmmarket. com/; http://www.efm-berlinale.de/en/home/homepage.html)

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The Number of Industry Participants 14000 12000 10000 8000 6000 4000 2000 0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cannes

AFM

EFM

Fig. 2.3  Industry participants attending Cannes, AFM and Berlin, 2005–2014. Source: Figures are collated from the Cannes, AFM and Berlin sales markets

industry participants increased from 9476 in 2005, to 10,709 in 2008, to 11,481 in 2012. AFM, EFM and Cannes consolidated their leading positions between 2012 and 2017. The number of trade exhibitors at the AFM increased from 357 to 445 in that period, but the number of industry participants declined from 7920 to 7415. The EFM continued to grow in the same period, with the number of trade exhibitors growing from 403 to 540 and the number of industry participants from 7920 to 9539. Slowly but surely, they became the second biggest sales market. In terms of their number of trade exhibitors, it should be noted that while this number only includes companies that participate in the official market buildings of the EFM, a further 50–60 companies were working from non-partner hotels, as I will explain in Chap. 3. Cannes also established further growth between 2012 and 2017. Their number of trade exhibitors increased from 883 to 1183, and the number of industry participants from 11,481 to 12,360. In particular, the number of trade exhibitors is much higher than AFM and EFM. The Cannes sales market is the most popular sales market. While most of the bigger sales companies participate in all key sales markets, smaller companies with modest possibilities need to be more selective, and they  often prioritise Cannes over AFM and EFM.

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2.7   Film Sales Markets as Field Configuring Events How have sales markets developed in the distribution business since the late 1950s? What are the most important sales markets? And how did they operate as part of the process of selling films to distributors? These were some of the key concerns of this chapter. But we can make yet greater sense of sales markets by combining this empirical account of their development with analytical discussions about such events. There is a considerable body of work that addresses these sorts of issues in fields of business activity beyond the film industry. Management and Organisation scholars in particular have made analytical  claims about the influences of industry events on organisational structures in fields of business activity. Lampel and Meyer (2008), for instance, have introduced the concept of field configuring events (FCEs). The focus here is on trade fairs and other competitive events with an important impact on industry activity in particular fields of business. Moeran and Pedersen (2011: 5), in addition, address the collective nature of such events, arguing that sales and distribution business activity takes place across “networks of fairs”, while Power and Jansson (2008: 425) speak of “cyclical clusters within global circuits”. Such studies point to the need for consistency in the work of industry participants, with FCE’s playing an important role in establishing routinised business patterns and networking relations. My analysis demonstrates that film sales markets have gradually taken the form of FCEs. Cannes and MIFED started as simple, low-key events but gradually expanded. They put themselves at the forefront of the distribution business in the late 1970s. The development of mini-majors and pre-sales financing through independent distributors gave a strong impetus to sales and distribution activity at Cannes and MIFED in this period. They became known as important ‘marketplaces’ and ‘bazaars’ for films. While Cannes and MIFED were still in a relatively early stage of development, the advent of AFM in the early 1980s brought about two changes. First, AFM became the third key sales market, which reinforced the understanding that sales markets were important meeting places for the sales and distribution community. Second, Cannes, MIFED and AFM were organised in joint coordination at different times throughout the year, resulting in a more structured and formalised distribution environment for the sales and distribution community. This marked the beginning of a

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new business structure for sales and distribution companies that reinforced interactions and networking arrangements through cyclical clusters, while at the same time making work processes and decision-making about films manageable. With this new business structure in place, Cannes, MIFED and AFM increasingly positioned themselves as FCEs. There is another argument to make about the role of sales markets as FCEs. The relationship between sales markets and the development of the home video and television markets in the 1980s is a good example to demonstrate that they supported each other. On the one hand, sales markets benefited from the flourishing state of the distribution business and the fact that the demand for films in international markets increased. Their role became more important because the sales and distribution community negotiated deals for a much higher number of films. On the other hand, the sales and distribution community benefited from three key sales markets throughout the year, which created more opportunities to conduct business in effective and efficient ways. It is thus clear that sales markets began to play a more important role once they became more established; in addition, they embraced external developments to ensure growth. This discussion also relates to the function of sales markets. I have demonstrated that the key sales markets have grown over time, particularly since the late 1990s. While they started as specific meeting places for sales and distribution professionals, they have developed as meeting places for a wider range of industry participants, with each of them attracting between 7000 and 13,000 industry participants in 2017. While sales and distribution activity remains a priority for sales markets, they have developed other initiatives such as co-production markets, networking gatherings, technological showcases, conferences and workshops to attract more producers and industry professionals and inform about new developments. With their orientation extending to the film industry more widely, they have a more important role to play in the process of driving field evolution. Having analysed the development of sales markets, it is important to explore in more detail how they are impacting on gatekeeping processes between sales agents and distributors. Sales markets are critical events where sales agents establish reputations, develop networking relations and negotiate deals. The growing number of sales companies at sales markets offers opportunities for a growing number of films. Because sales organisations decide which films secure access to sales markets, and how those films are introduced and promoted to distributors within these markets,

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they are important events where powerful gatekeeping decisions are made. It is precisely this issue that will be explored further in the next chapter.

References Alexander, M. (1991). AFMA Says 97 Companies Will Attend New Fall Mart. Variety, 15 April 1991, p. 5. Borsten, J. (1985). To Frans Afman, Films Are Money in the Bank. Los Angeles Times. [Online]. 9 July 1985. Available at: http://articles.latimes.com/198507-07/entertainment/ca-9344_1_film-industry [Accessed 6 April 2016]. Boxoffice. (1979). Editorial: Lorimar, Mel Simon Co-Host ‘La Costa ‘79’, 29 January 1979, p. 9. Cook, D. (2000). Orders of Magnitude I: Majors, Mini-Majors, “Instant Majors,” and Independents. In: D. Cook (Ed.), Lost Illusions. Los Angeles: University of California Press. Dawtrey, A. (1995). London Upstages Milan Screenings. Variety. [Online]. 16 October 1995. Available at: http://variety.com/1995/more/news/londonupstages-milan-screenings-99128716/ [Accessed 10 February 2015]. Dionne, E. (1983). Cannes, The Festival of Film Deals. The New York Times, 14 May 1983, p. 14. Frater, P. (2002). Belt-tightening Squeezes Pre-Mifed Screenings. Screen International. [Online]. 11 July 2002. Available at: https://www.screendaily. com/belt-tightening-squeezes-pre-mifed-screenings/409877.ar ticle [Accessed 15 February 2015]. Goodridge, M. (2003). AFM on Collision Course with MIFED in 2004. Screen International. [Online]. 17 June 2013. Available at: https://www.screendaily. com/afm-on-collision-course-with-mifed-in-2004/4015794.article [Accessed 20 February 2015]. Goodridge, M. (2014). Private Interview with the Managing Director of the UK Sales Company Protagonist Pictures via Skype, 22 September 2014. Hall, S. and Neale, S. (2010). Epics, Spectacles, and Blockbusters: A Hollywood History. Detroit: Wayne State University Press. Hardesty, M. (1997). How Marts Stack Up. Variety, 13 October 1997, p. 3. Harris, D. and Dunkley, C. (2003). Inside Move: Is MIFED in AFM Crosshairs? Variety. [Online]. 27 April 2003. Available at: http://variety.com/2003/ film/news/inside-move-is-mifed-in-afm-crosshairs-1117885168/ [Accessed 17 February 2015]. Hazelton, J. (1992). Dip in AFM Attendance Seals One-market Vote. Screen International, 13 March 1992, p. 7. IMDb (Internet Movie Database). (2016). A Global Film Database. [Online]. Available at: http://www.imdb.com//.

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Iordanova, D. and Cheung, R. (Eds.). (2011). Film Festival Yearbook 3: Film Festivals and East Asia. St. Andrews: St. Andrews Film Studies. Iordanova, D. and Rhyne, R. (Eds.). (2009). Film Festival Yearbook 1: The Festival Circuit. St. Andrews: St. Andrews Film Studies. Lampel, J. and Meyer, A. (2008). Field-Configuring Events as Structuring Mechanisms: How Conferences, Ceremonies, and Trade Shows Constitute New Technologies, Industries, and Markets. Journal of Management Studies, 45(6), 1025–1035. Lieb, R. and Ilott, T. (1992). 59th Mifed Opens Strong with Good Biz, Attendance. Variety. [Online]. 25 October 1992. Available at: http://variety. com/1992/film/news/59th-mifed-opens-strong-with-good-biz-attendance-100947/ [Accessed 7 February 2015]. Maltby, R. (2003). Hollywood Cinema. 2nd edn. Oxford: Blackwell Publishing. McCarthy, T. (1997). Cote Du Cinema: Famous Fest Casts a Golden Showbiz Glow. Variety, 24 March 1997, p. 3. McDonald, P. (2007). Video and DVD Industries. London: British Film Institute Publishing. Minns, A. (2005). Pent Up Demand Set to Drive Cannes Market. Screen International. [Online]. 9 May 2005. Available at: https://www.screendaily. com/pent-up-demand-set-to-drive-cannes-market/4022927.article [Accessed 19 February 2015]. Moeran, B. and Pedersen, J. (2011). Introduction. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 1–35. Neale, S. and Smith, M. (Eds.). (1998). Contemporary Hollywood Cinema. London: Routledge. Power, D. and Jansson, J. (2008). Cyclical Clusters in Global Circuits: Overlapping Spaces in Furniture Trade Fairs. Economic Geography, 84(4), 423–448. Rooney, D. (2002). Mifed Mulls Extra Days to Ease Sked. Variety. [Online]. 5 November 2002. Available at: http://variety.com/2002/film/news/mifedmulls-extra-day-to-ease-sked-1117875520/ [Accessed 15 February 2015]. Ruoff, J. (2012). Introduction: Programming Film Festivals. In: J. Ruoff (Ed.), Coming Soon to a Festival Near You: Programming Film Festivals. St. Andrews: St. Andrews Film Studies, pp. 1–22. Saperstein, P. and Klady, L. (1995). Fifteen Seasons of Sun and Sums. Variety, 20 February, p. 2. Schreyer, L. and Damon, M. (2008). From Cowboy to Mogul to Monster: The Neverending Story of Film Pioneer Mark Damon. Bloomington: Authorhouse. Screen International Staff. (2005). European Film Market Closes at an All-time High. Screen International. [Online]. 21 February 2005. Available at: https:// www.screendaily.com/european-film-market-closes-at-an-all-timehigh/4022116.article [Accessed 19 February 2015].

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Variety (1960). Editorial: Lotsa Reservations for Milan Film Trade Fair, 28 September 1960, p. 19. Variety. (1969). Editorial: Cinema Center’s Latin Distributor: Rank, 19 February 1969, p. 84. Variety Staff. (1991). Americans are Confident for Fall. Variety. [Online]. 24 February 1991. Available at: http://variety.com/1991/more/news/americans-are-confident-for-fall-99126068/ [Accessed 5 February 2015]. Variety Staff. (2002). Calendar Discussions Continue. Variety. [Online]. 17 February 2002. Available at: http://variety.com/2002/scene/markets-festivals/calendar-discussions-continue-1117860803/ [Accessed 15 February 2015]. Vivarelli, N. (2004). Diehards Hang on at Desolate Mifed. Variety. [Online]. 12 October 2004. Available at: http://variety.com/2004/film/news/diehardshang-on-at-desolate-mifed-1117911869/ [Accessed 20 February 2015]. Wasser, F. (2002). Veni, Vidi, Video: The Hollywood Empire and the VCR. Austin: University of Texas Press. Young, D. (1991). Mifed: ‘Not Going To Roll Over’. Variety. [Online]. 24 February 1991. Available at: http://variety.com/1991/more/news/mifednot-going-to-roll-over-99126043/ [Accessed 5 February 2015]. Yule, A. (1987). Hollywood a Go-Go: The True Story of the Cannon Film Empire. London: Sphere Books Ltd.

CHAPTER 3

The Film Sales Process at the European Film Market

3.1   The Role of a Sales Market The historical account of film sales markets in Chap. 2 demonstrated the importance of such markets in the distribution business from the 1950s to the present. I employed the concept of the film distribution business while describing the relationships between sales markets and their influence on the wider field of film distribution. While the film distribution business is a deliberately general concept, I will use the concept of the film sales process in this chapter to refer specifically to sales and distribution activities taking place within sales markets. In order to analyse this process, the focus shifts to the EFM sales market, which takes place as part of the Berlin International Film Festival. Strategically located around the Potsdamer Platz commercial centre in the heart of Berlin, this is a market in which 490 trade exhibitor organisations—sales agents and national film agencies—rented space at the 2015 edition, and worked from exhibition stands or business offices in one of the two official market venues: Martin-Gropius-Bau (MGB) and Marriott Hotel (EFM 2015a). Also, a further 50–60 sales agents were working from non-partner hotels. Altogether, they introduced their film collections to distributors and other types of buyers, such as television broadcasters, film festival programmers, content aggregators and digital providers, with more than 1500 such companies participating (EFM 2015a). © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_3

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Sales agents introduce and promote several thousands of films to distributors and other buyers at the EFM. It is a highly competitive event in which only few films are able to build up awareness and raise sufficient attention. The sales market itself has an important role to play since sales agents make use of spatial and physical arrangements within the market to ascribe values to films. Factors such as the type of exhibition stands as well as the location and size of stands in the market are examples of spatial arrangements through which sales agents create values for films. In addition, film screenings are important physical arrangements through which values are created. Film screenings give an aural and visual presence to the films being bartered, and that is how film markets as well as television markets stand out from other sales markets in fields of cultural activity. Crucially, film screenings provide a better insight into the film sales process, since they are organised by sales agents for individual films. With this focus on spatial and physical arrangements within the EFM in mind, the aim of this chapter is to analyse the EFM as an event where important gatekeeping processes are taking place. This raises several questions. How do sales agents make use of spatial and physical arrangements within the EFM to create values for films? How some films are rendered more visible than others at the EFM? How is power exercised over the process of regulating cultural flow and the ways films secure access to both national and international markets?

3.2   Analysing Film Sales Markets I will further elaborate in this section on the organisation of exhibition space and film screenings as tournaments of values. More specifically, I will consider how the organisation of exhibition space has been analysed in academic discussions and how sales markets create social hierarchies through the disposition of space. I will also provide a context through which to understand the importance of film screenings at sales markets, and how they can add values to films. Before I start this discussion, it is worth noting that film scholars and those focusing on the film industry from other perspectives have consistently prioritised the study of film festivals above the study of film sales markets. In terms of discussions about sales markets in the film industry,  Ruby Cheung’s (2011) study on film sales markets in Asia perhaps

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bears most resemblance to this subject. Cheung outlines the relevance of various sales markets in Asia by positioning them in relation to the bigger markets in Europe and the US. Her study provides an important introduction to sales markets, but what remains missing is an analytical understanding of value creation processes within those markets. The role of sales markets and other competitive events in media and creative industries has been analysed in an edited collection by Brian Moeran and Jesper Strandgaard Pedersen (2011). Following Arjun Appadurai’s concept of tournaments of value, contributors to this edited collection conceive of sales markets and other competitive events as tournaments that stand out from the “routines of [everyday] economic life” (1986: 21). In order to highlight that value creation processes impact on the commodities being bartered at such events, Moeran and Strandgaard Pedersen (2011: 12–14) have further developed the concept of tournaments of value, arguing that they should be understood as tournaments of values. In particular, they distinguish between technical/material values, social values, situational values, appreciative values and utility values. Timothy Havens (2011), one of the contributors to the edited collection, is particularly attentive to tournaments within sales markets through which specific values for cultural commodities are created. For instance, he argues that different levels of access to industry participants at sales markets create different business networks: Global television markets permit multiple levels of participation, leading to several distinct yet overlapping tournaments of values, by constructing boundaries that only authorized participants may cross. These boundaries include the entryway to the space of the market, various sales floors within the marketplace, restricted areas of sales floors and booths and various parties and events after the markets close each day. (2011: 156)

Havens’ description of tournaments is thus related to different organisational forms within a sales market through which values are created, rather than describing the sales market as a single tournament of value. Like Havens (2011) and Moeran and Strandgaard Pedersen (2011), I will adopt the concept of tournaments of values in this chapter to analyse how values are ascribed to films at sales markets. Havens (2011) and Moeran (2011) note that the organisational structure of sales markets creates opportunities for sales agents to work from

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more or less exclusive exhibition stands or offices. They observed social hierarchies between sales agents, effectively distinguishing between those presenting themselves as more or less powerful companies. Those social hierarchies created within the sales markets have an impact on the values ascribed to the films with which sales agents engage. In particular, they highlight the importance of stand size and stand location as strategies used by sales agents to enhance their presence and visibility within the sales market and stand out from competitors. Thus, Havens (2011: 155) notes that the most powerful sales companies hire the biggest exhibition stands or work from private offices in hotels to establish an exclusive position within the sales market, and with access only for selected buyers. Such specific spatial arrangements within sales markets reinforce social hierarchies between sales agents, and that is why they can be understood as important tournaments of values. I will analyse the impact of such spatial arrangements at the EFM.  What kinds of sales agents participate in the EFM and how do they participate? How is space allocated to those sales agents? And how does the allocation of exhibition space impact on the process of value creation? While Havens is very attentive to spatial arrangements in television sales markets, he is less attentive to physical arrangements, such as television screenings. Like screenings at film sales markets, television screenings are a form of promotional activity through which new television series or programmes are introduced to buyers. However, there is also an important difference between film and television markets: the film markets are often organised in joint coordination with film festivals, with the festival screenings taking the form of additional tournaments of values through which films are presented aurally and visually. In terms of how film festivals and sales markets are interrelated with each other, it is possible to draw a comparison with tournaments of values in the fashion industry. Joanne Entwistle and Agnes Rocamora (2011), for instance, have demonstrated that trade fairs and fashion shows are both events where fashion companies introduce and promote new collections as part of the sales process. In terms of the EFM, it is important to distinguish between film screenings organised within the EFM sales market (i.e. market screenings), and those organised in the Berlin International Film Festival (i.e. festival screenings). These two events are connected in the sense that some films are introduced to festival audiences through screenings as part of the official festival programme, while simultaneously being shown to industry participants at market screenings in the EFM. This symbiotic relationship

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can thus add market and word-of-mouth values to films. However, the two events are distinct in the sense that films shown in the official festival programme are selected by festival committees, while films shown in the sales market are booked by sales agents (EFM 2015b). Unlike the films selected for the official festival programme, a screening fee is required to book film screenings in the sales market, which are thus very much business transactions rather than artistic celebrations. This calls for an analysis of film screenings in relation to the value creation process. How can screenings be supportive to films? And why are some films able to raise more attention through screenings than others?

3.3   Observing Sales Agents at the EFM The empirical analysis in this chapter draws on four days of participant observation at the EFM 2015. I was able to register for market accreditation, which gave me the same access to locations and events as sales agents and distributors, including access to film screenings organised within the EFM sales market. This enabled me to observe the organisational structure of the sales market and the stands from which sales agents worked. Because I introduced myself to sales agents as an academic researcher, I did not participate in exactly the same way as distributors normally do. I gained access to individual stands and watched promos of films in development, but my capacity to observe meetings or the process of negotiating distribution deals was limited. For instance, I entered the hotel office of the US sales agent The Weinstein Company, where I talked about the sales market with some of their representatives and watched some of their promos, but I did not have one-to-one meetings. In addition, I used my professional relationships with distribution professionals to observe work practices at the sales market. For instance, I joined the Manager Director of a Dutch distribution company for a few hours at the sales market. While we explored different sections of the sales market, she informed about the market structure and the ways in which sales and distribution professionals conduct business. Through the same contact, I obtained access to an informative meeting between her and a German sales agent in which a number of films in development were discussed. I was introduced as someone with a key interest in film distribution rather than as a colleague. This meeting was helpful to learn about the way films are introduced to distributors and the tone of such conversations. Such meetings are usually organised in advance of more specific

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meetings in which contractual terms are negotiated for films. I also used my professional relationships with distribution professionals to meet ­informally for drinks in the evenings to talk about my observations at the sales market and discuss projects on offer in the marketplace. Such conversations were important to test and confirm my understanding of business proceedings at the sales market. I spent much of my time in the official locations of the sales market. I consulted the exhibitor guide, which included a floor plan of the sales stands and all participating exhibitors. From my observations, it became clear that the majority of sales agents consisted of only two or three salespersons, and most of them participated in booths coordinated by national film agencies, the so-called umbrella stands. A much smaller group of between 50 and 80 sales agents were larger organisations, usually comprising more than five representatives, and they could afford to set up offices in individual stands or hotel rooms. While those larger sales agents represented most of the higher-profile, big-budget films for sale at the EFM, the smaller sales agents dealt with smaller, more specialised films. I also analysed film catalogues from individual sales agents, which included information about the status of their films in various stages of the film production process. It became clear that film projects on offer at the EFM ranged from low-budget films to medium-budget films and even big-budget mainstream films. Although the majority of the projects were low-budget films, a limited number of much more high-profile films stood out. For instance, the powerful US sales company IM Global represented the $40 million budget Hacksaw Ridge (2016), directed by Mel Gibson, while the powerful US company Sierra/Affinity represented the $20 million budget Gold (2016), with Matthew McConaughey in a leading role. In addition, I analysed screening schedules of films handled by each sales agent. Such schedules included screening dates for various types of screenings—that is to say, for festival screenings accessible to festival audiences and industry participants with festival accreditation, for market screenings accessible only to industry participants with a market badge, for press screenings accessible only to registered press members, for festival premieres accessible to invited guests and press members, and for private screenings or promo reels organised for a select group of buyers. Those screening schedules of individual sales agents thus provided an insight into the way films are introduced to buyers, the trade press and festival audiences.

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Additional information about the organisation of the market was collated from the official Berlinale website and from interviews with Market Director, Matthijs Knol, and Head of Administration, Tilmann Vierzig. The interviews provided an opportunity to learn further about the organisation of exhibition space and film screenings.

3.4   The Organisation of Exhibition Space The centrally located Potsdamer Platz area in Berlin has been the centre of the EFM since 2000. The subsequent growth and expansion of the EFM has resulted in the need to relocate to locations in and around this area. Trade observers note that the market organisers decided in 2006 to move into a bigger market building, the Martin-Gropius-Bau, which is also located in the Potsdamer Platz area. As a result, the market capacity increased from 170 exhibitors to 300 exhibitors. Given the fact that the sales market continued to grow, the Marriot Hotel became the second official market building in 2009 (Pham 2009). This marked the beginning of a new infrastructure that has remained in place up to the present. I will now discuss how sales agents position themselves within these official locations of the sales market. As noted earlier, I observed that there was also a group of 50–60 sales agents that worked from non-partner hotels, and they are also included in the analysis. Exhibition Space in the Martin-Gropius-Bau The Martin-Gropius-Bau (MGB) is the main exhibition centre of the sales market, comprising 104 stands spread over two floors (EFM 2015c). It is best understood as a venue where industry professionals conduct business in a relatively informal atmosphere. In terms of the creative orchestration of exhibition stands in the MGB, the Director of the EFM, Matthijs Knol (2015), noted in an interview that they are able to exert control over the positioning and coordination of stands, and this allows them to create a business environment that is supportive for sales agents large and small. I observed that the central hall of the MGB was used as both a social space and a business space. Many industry professionals gathered here to network, but there were also two large exhibition stands, which were allocated to the Creative Europe/MEDIA programme, the EU’s flagship support mechanism for the audiovisual industries, and the Spanish Film

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Agency. They secured a strong presence in the market because of the central location of their booths. Most of the other exhibition stands, however, were located in the hallways surrounding the central hall of the EFM. The arrangement of those exhibition stands was characteristic for the informal atmosphere in the MGB, with many stands facing each other and designed with open ends, making them very accessible for distributors and other buyers. Moeran (2011: 130) notes that such spatial arrangements in the sales market underscore the importance of visibility. In particular, he notes that visibility is important in relation to the location and size of exhibition stands. Visibility is therefore a means through which power is exercised, since a bigger stand demonstrates that sales agents are prepared to invest more in their positioning in the EFM. The rental price for an exhibition stand at the EFM relates to the size of stands: the price of an individual stand at the MGB was €420 per square metre in 2015 (EFM 2015a). The size of stands also matters because bigger stands have more privileges in terms of design and equipment, which has an impact on the business experience of buyers. For instance, the MGB guidelines (2015) demonstrate that small booths of between 9 and 15 square metres are open stands comprising one table and four chairs, while bigger booths of between 16 and 30 square metres include two tables and eight chairs, but also one closed office, which allows the sales team to conduct business with buyers privately. Then there are two even larger stand sizes: stands of between 31 and 55  square metres come with two closed offices, and stands of 56 square metres or more come with three closed offices. For stands of those sizes, wall segments are also provided as a means to further promote specific films. Beyond the fact that the bigger stands are more visible in the market than smaller stands, it is clear that they offer more flexibility in the sense that some business meetings are organised in the open space, while other meetings take place in closed offices with restricted access. The MGB guidelines also demonstrate that the cost of exhibition stands depend on whether sales agents decide to hire an individual stand or join a so-called umbrella stand. In terms of individual stands, they are usually shared between two companies to reduce the costs of rental, but some companies can afford the luxury of hiring such stands exclusively by themselves. In terms of umbrella stands, they are usually coordinated by national film agencies to accommodate three or more companies, which may involve sales agents and/or national or regional film institutions. For

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instance, I observed that the UK umbrella stand, called ‘We Are UK Film’, offered space to small UK sales agents such as Dogwoof, Parkland Films and AV Pictures, as well as UK film institutions such as the British Film Institute, Creative England, Creative Scotland and Northern Ireland Screen. The main advantage for those organisations is that they are able to hire exhibition space as part of a larger group, without the need to hire at least 9  square metres individually. Given the limited space on umbrella stands and the relative smallness of these different companies, their sales teams usually consist of only one or two representatives. It is clear that such smaller sales companies working from umbrella stands participate in the EFM differently than sales agents working from more prestigious, individual stands. With such diverse interests at stake for specific types of sales agents, the planning and organisation of the EFM sales market involves responding to the competing demands of these participating sales agents. In making decisions about the allocation of exhibition space in response to the requests of different types of sales agents, the EFM notes that they apply two conditions in particular (EFM 2015d). First, they are “taking into consideration the overall layout of the EFM and the nature of the Exhibitor’s activities”. Secondly, while they make an effort to “fulfil the Exhibitor’s requests in terms of stand/office size and location”, they give “priority to companies returning from year to year, however, without the guarantee of the same space being available each year”. Thus, even though sales agents may be prepared to invest in an exclusive exhibition stand or office at a particular location of the sales market, the market organisers are not always able to accommodate their requests. Because the market organisers retain the right to make decisions about the allocation of exhibition space, services and facilities, the pressure on such decisions grows if competition is fierce and space is scarce. In terms of exhibition space allocated to sales agents in the MGB at the 2015 sales market, I observed that the biggest individual stands were occupied by some of the largest and most successful European sales agents, such as Wild Bunch, Pathé and Gaumont from France, HanWay and Protagonist from the UK and Beta Cinema from Germany. Further, I observed that very few American sales agents worked from individual stands in the MGB because they preferred to work from other hotels in the locality. Another important observation is that the biggest umbrella stands in the MGB were allocated to national film agencies from the so-­called big five film markets within Europe: Germany, Spain, France,

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Italy and the UK. Other large umbrella stands were taken by film agencies from Scandinavia, Russia, Creative Europe and the global film trade association Independent Film and Television Alliance. Exhibition Space in the Marriott Hotel The organisational structure of the second market location, the Marriott Hotel, is markedly different from the MGB due to the nature of the Marriott as a high-end business organisation providing overnight accommodation and other services. What makes the Marriott unique in its structure is that sales agents participated in stands, offices or suites, which were spread over four floors. Thus, on the first floor was a small business marketplace comprising 29 exhibition stands, which resembled the orchestration of exhibition stands in the MGB. Most of them were relatively small umbrella stands allocated to non-European film agencies. There was, in addition, a much more formal and exclusive way of conducting business, whereby trade exhibitors worked from temporary offices in private hotels. Such offices were allocated to about 40 sales agents spread over different floors. The business experience in those hotel offices was very different: they are closed rooms and usually accessible by invitation only. Most of the offices were single rooms hired by individual sales companies rather than national film agencies. The rental price of a single-room hotel office was €8000 per room, which is the equivalent of the price for a 19 square metre stand in the MGB, but these hotel offices were smaller (EFM 2015a). In addition to single-room hotel offices, I also observed that some companies hired bigger suites, or several single-room offices next to each other. For instance, the French sales agent StudioCanal hired one of those suites. They used one room as a lounge where distributors and other buyers could watch promos of their films, while other rooms were more secluded to allow private business meetings to take place. The rental price of these more spacious hotel suites was much higher, starting at €16,800 on the first and second floor, while the prices for a suite on the top floor were only available upon request. It is thus clear that some sales agents deliberately hired such suites to stand out from others and present themselves as powerful companies. In this respect, the location of suites also impacted on their competitive positioning, as the biggest sales agents demonstrated: EuropaCorp (France) hired three rooms which constituted a whole wing of the second floor; eOne (Canada) and StudioCanal

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(France) worked from private suites on the top floor, with a view over the city centre; FilmNation (US) was the only sales agent that was located on the ground floor, close to the main entrance. Just as in the exhibition hall in the MGB, it is clear that there is a social hierarchy between sales agents in the Marriott, demonstrating how values are created through the positioning of sales agents in the sales market. Visibility and exclusively are important factors that enable some companies to stand out from others. Exhibition Space in Non-Partner Hotels Although much of the sales activity was concentrated around the two official EFM locations, a further 50–60 companies were based in non-partner hotels such as the Ritz-Carlton, Grand Hyatt, Maritim and Mandala, also conveniently located in the Potsdamer Platz area. The fact that this involved some of the most powerful sales companies in the distribution business, with many of them from the US, made their participation nevertheless important. Chief among them were US sales agents such as IM Global and Relativity Media in the Ritz-Carlton Hotel, and Lionsgate, Mister Smith, Sierra/Affinity and the Weinstein Company in the Grand Hyatt Hotel. From conversations with representatives of various sales agents and distributors, it became clear that they deliberately separated themselves from other companies by working from those non-partner hotels, forcing buyers to rotate between various locations. They argued that there are various reasons why they have a preference for other hotels. First, they note that such arrangements are also taking place at the AFM sales market and the Cannes sales market. Second, they note that such arrangements have developed in the past. Third, they note that some companies want to position themselves differently within the market, and indeed stand out from companies participating in the official locations, underscoring that prestige is important for such companies. Havens (2011) confirms this point about the importance of prestige. Drawing on participant observation at television sales markets, he notes that the fact that some sales agents do not formally take part in the official sales market, but nevertheless work from non-partner hotels, should be understood as a “profound statement of power and prestige” (2011: 152). For such companies, he further notes that their “absent presence seems to be a more effective business strategy than skipping the market altogether” (2011: 152).

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In terms of differences observed between official EFM locations and non-partner hotels, it is clear that while the MGB resembled a business marketplace, and the Marriott Hotel combined the atmosphere of a luxurious hotel with the ambience of the marketplace, the non-partner hotels were more formal still (Table 3.1). The atmosphere inside the non-partner hotels, for instance, was not so frantic as in the Marriott Hotel, where industry professionals used the lobby as a meeting place. The fact that these sales agents in non-partner hotels did not work from stands, but only from private offices or suites, also underscored that they operated as part of a relatively small-scale but high-prestige business network. Various executives of sales agents and distributors noted in informal conversations that many of the sales agents in non-partner hotels rely on the services of the public relations company DDA for their business office arrangements. On their website, DDA notes that they provide “fully equipped offices” at a range of festivals and sales markets, including “Sundance, Berlin, Cannes, Edinburgh, Venice, Toronto, MIPTV, MIPCOM and AFM in the film and television business” (DDA 2015). They also note that they have developed a strong expertise in terms of organising publicity campaigns at these festivals and sales markets. Identifying the differences between various types of sales agents reveals the scope and size of the international sales community and the important role of tournaments of values within the sales market. The fact that this field is so fragmented supports the claim that the allocation of exhibition space is critical to the film sales process (Havens 2011; Moeran 2011). Those differences between sales agents are played out within and beyond the Table 3.1  Differences between business locations at the EFM Locations

Martin-Gropius-­Bau

Marriott Hotel

Non-partner hotels

Exhibition space Individual sales agents National film agencies Service Atmosphere Stand size Accessibility

Stands Mostly European

Stands, offices, suites Mostly European and American Mainly in the exhibition area EFM Neutral Flexible and fixed Open and closed

Offices, suites Mostly American

Many EFM Casual and informal Flexible Open

None DDA Formal Fixed Closed

Note: These categorisations should be understood in relative terms. There are undoubtedly exceptions

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official EFM locations. As already argued, social hierarchies are by no means unique to the EFM sales market. It is, for instance, possible to draw parallels with the market structure of the Cannes film sales market. Figures provided by Le Marché Du Film (2015) demonstrate that 515 trade ­exhibitor organisations worked from exhibition stands and another 129 from offices in hotels or apartments in 2015, with others working from non-­partner hotels and apartments.

3.5   The Organisation of Film Screenings The positioning of sales agents at sales markets is broadly indicative of the range of films they represent. It is particularly important to examine how they introduce and promote films within the sales market. The film sales process is organised in various stages of a film’s production. The distribution rights for bigger budget, more mainstream films are sold in a pre-­production stage because the financing of those films is heavily reliant on pre-sales deals. For instance, trade reporter Keslassy (2013) notes that the French sales agent EuropaCorp pre-sold the distribution rights for Lucy (2014) to distributors in France, Benelux, Portugal, China and Japan, while Universal Pictures acquired the rights for all the remaining markets in a pre-production stage. On the contrary, the rights for smaller productions, which made up the vast majority of films on offer at the EFM, are usually sold to distributors when films are completed. It is for those completed films in particular that film screenings become important tournament of values, further supporting the film sales process. As noted, films on offer at Berlin may be screened in the sales market or in the film festival. In 2015, the EFM organised 1014 market screenings for 748 films, while another 1098 screenings were organised for 443 films in the festival programme (EFM 2015e). There was some overlap between these programmes, with 132 films on show in both the sales market and the film festival. In particular, films selected for the most prestigious festival programmes, such as ‘Competition’ and ‘Panorama’, were also shown in the sales market. The film festival and the sales market thus provided a context in which films could potentially benefit from an all-important buzz generated by industry, press and audience response, which in turn could have an impact on distribution negotiations about such films. I observed that both types of film screenings were important to the process of introducing and promoting films at the EFM, but they served

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different purposes. Festival screenings were organised primarily for festival audiences (made up of invited guests, critics, reviewers and a self-selecting section of the general film-going public) and only involved films chosen by festival programmers. Market screenings, by contrast, were specifically organised for industry professionals with the purpose of exhibiting the newest films on offer. Market Screenings at the EFM Sales agents are required to pay screening fees for market slots within the EFM, and in return retain the right to decide how they made use of those slots and who is allowed into those screenings. From my analysis of market screenings, it is clear that most of the films on show were either finished or nearly finished, and had been introduced at other festivals and sales markets before, but market screenings were also used to introduce films in development. The bigger companies, in particular, used such slots to show promo reels, involving important scenes or trailers from several films in their catalogue, with the purpose of establishing distribution deals at an early stage of their production. Such promo reels were mostly presented at the beginning of the sales market to give buyers an impression of what is available. For instance, large European sales organisations such as Pathé, Wild Bunch and Gaumont showed their film promos on the first day of the EFM. Another way of introducing films was through private screenings organised by sales agents for a select group of distributors only. Those private screenings are sometimes combined with promotional activity such as a question and answer (Q&A) session with directors or wellknown film actors. An example of such promotional activity is the $15  million film W.E. (2011), directed by the well-known American star Madonna. Trade observer Lodderhose (2011) notes that the American sales agent IM Global asked Madonna to attend the Berlin sales market in February 2011 to inform invited distributors and cinema exhibitors about several important scenes of the film. This was a promotional strategy developed to impress those distributors and cinema exhibitors, while at the same time generating buzz for the film in the sales market. The Director of IM Global, Stuart Ford, underscores that Madonna’s presence sent “an important message” to distributors, demonstrating that she was “willing to travel and support the film” (cited in Lodderhose 2011).

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In addition, film screenings provided an important opportunity for completed films to be shown in the sales market. The main purpose here involved convincing buyers of the film’s potential and negotiating further distribution deals, but those screenings were also important because they were attended by programmers from international festivals, who could pick up those films to introduce them to audiences in their local or national markets. In particular, such screenings provided important opportunities for small-scale, low-budget films to be picked up by festival programmers and gain access to the international festival circuit. A Case Study of 45 Years (2015) Given the important role of market screenings and festivals screenings as tournaments of values, I will develop a case study of the UK production 45 Years (2015) to analyse how the film was introduced and promoted. 45 Years formally premiered at the 2015 Berlin International Film Festival and was also on show in the sales market. The film was directed by the up-­and-coming British filmmaker Andrew Haigh on a budget of less than £1.5 million, with substantial financial support from the UK public institutions Creative England, Film 4 and the British Film Institute. Trade observer Macnab (2014) notes that the German sales agent The Match Factory became involved at the pre-production stage and sold the film to the distributor Curzon Artificial Eye in the UK home market at the 2014 Cannes Film Festival, just after completing shooting. 45 Years was subsequently prepared for the Berlin Festival in February 2015, where it was selected for the Competition programme, the most prestigious and competitive section of the festival. The festival nomination had an important impact on the comparative status and positioning of 45 Years as the few films selected for the competition programme were introduced within the festival in a more exclusive way than other films. Thus, they were given a special gala premiere, with the director and leading members of the cast supporting the film in front of the press and invited guests in the Berlinale Palast, the biggest and most prestigious screening venue of the festival. The competition films were also introduced to the press and shown publicly to festival audiences as part of the official festival programme, with three additional festival screenings and two additional press screenings for the media following the gala premiere.

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The sales agent The Match Factory used the Competition selection as a means to further consolidate buzz surrounding the release. They organised three extra screening slots in the sales market and promoted the film in the trade press. The following pattern emerged from this strategy: • On Thursday, at the first day of the EFM, the Screen International market edition opened with a cover fully dedicated to 45 Years, which announced screening dates in the festival and market programme, including one press screening on Thursday evening (Fig. 3.1). • The gala premiere and two other press screenings were scheduled for the next day, Friday. • The first trade press reviews appeared on Friday and Saturday in the special market editions of Screen International, Variety and The Hollywood Reporter. • There were three more festival screenings scheduled on Saturday, and one market screening, followed by further market screenings on Sunday and on Thursday. In terms of the timing of those screenings, this was an almost ideal trajectory from which the film stood to benefit, particularly because most of the business negotiations about films start at the beginning of the EFM and most of the industry participants stay only for four or five days. Screening dates in the first few days of the market were therefore beneficial to the film sales process. Positioning Films in Sales Markets The Head of Film Administration of the EFM, Tilmann Vierzig (2015), noted in an interview that the festival and market programmers make decisions about the programming of film screenings. In terms of the allocation of screening space, priority is given to festival screenings. Festival programmers reserve a select number of screening rooms and time slots for each of the festival sections, and the films selected for each of those sections enjoy more or less the same privileges in terms of the location and size of screening rooms (Vierzig 2015). For instance, 45 Years and other Competition films were shown in the largest screening rooms of the festival. Because some of the largest  screening rooms and the most popular time slots are already reserved for festival films, Vierzig noted that there is limited space in the largest screening rooms for market screenings. He also

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Fig. 3.1  The cover of Screen International on the first day of the EFM. Courtesy of The Match Factory GmbH and Screen Daily

noted that a team of three film experts, including the well-known president of the EFM, Beki Probst, usually make decisions about the programming of market screenings (Vierzig 2015). Their decision-making is typically based on the perceived potential of films, which relies on factors such as the director and leading actors, as well as the reputation of sales agent and the producers involved.

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Returning to the example of 45 Years, it is important to demonstrate in more detail how such decisions about programming impact on the film sales process. The programmers positioned 45 Years as one of the key films in the sales market by scheduling the first two market screenings in the opening weekend. The first screening on Saturday was organised in one of the bigger screening rooms of the multiplex  cinema  Cinemaxx, with a capacity of 300 seats. Knol (2015) noted in an interview that sales agents generally have a preference for screenings at 11.00 am or 3.00 pm to avoid that films are being shown during lunchtime or dinner in the evening, and this first screening of 45 Years was conveniently scheduled at 3.00 pm. The second screening on Sunday was programmed in a smaller room with a capacity of 182 seats in yet another multiplex cinema, CineStar. Although the timeslot at 7.30 pm during dinnertime was less favourable, I observed first-hand that the room was fully packed. The programming of both screenings in the opening weekend was thus advantageous for positioning 45 Years within the market, particularly when taking into account that screenings of more than 700 films were programmed in the same week. What has become clear in this example of 45 Years is that factors such as the location, time slot and size of screening rooms helped to secure a strong presence within the sales market. Because the film was also well received at the festival, with positive reviews in the trade press, it attracted substantial buzz and became a popular proposition. The Match Factory announced after the festival that it closed distribution deals in as many as 30 markets “around the world”, including the US and key territories in Europe (Wiseman 2015). Although 45 Years may be an unusually successful example, it demonstrates how festival and market screenings functioned as tournaments of values and added values to the film sales process. A combination of both types of screenings can  support films considerably. On the other hand, generating buzz through film screenings was achieved by a select number of films rather than the majority of films.

3.6   Film Sales Markets as Tournaments of Values What has emerged in this chapter is that sales markets endow films with significant values. The case study of the EFM has demonstrated that the process of value creation at film sales markets is inextricably tied to the production context of films, beginning at the point when sales agencies develop projects and introduce films as concepts, and continuing through

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subsequent stages in which additional attention is generated through actual film materials and screenings. In focusing on spatial and physical arrangements through which values are ascribed to films, this chapter has taken the discussion about value creation at sales markets further, extending to the sales process of films. In line with observations by Havens (2011) and Moeran (2011), it is clear that sales markets create social hierarchies between participating sales agencies, with the biggest sales companies working from the biggest exhibition stands or from exclusive hotel suites, underscoring the importance of visibility within the sales market. Indeed, as Havens (2011) argues, such exclusive positioning is very much a statement of prestige and dominance, a way of exercising power, as well as providing their clientele with a specific business experience. In other words, these spatial arrangements take the form of a tournament through which values are ascribed to sales agents and the films they represent. What risks getting lost in this sort of discussion is an argument that ties together the importance of exhibition space with the effectiveness of film screenings, giving an aural and visual presence to the films being bartered. Given the highly competitive environment at the EFM sales market, in which thousands of films are introduced and promoted, film screenings are important to the process of building buzz and word-of-mouth interest around individual films, and generating free publicity through reviews by newspaper critics. I identified various forms of screenings, including private screenings, promo screenings, market screenings, press screenings, public screenings, with each of them serving its own purpose in relation to the value creation process of films. This analysis of film screenings demonstrated that there are more or less exclusive ways of introducing and promoting films, with some sales agents organising private screenings for a select group of distributors to promote specific films in various stages of development, underlining the importance of film screenings as tournaments through which values are created. In addition, the case study of 45 Years demonstrated the symbiotic relationship between the festival and the sales market, providing a context from which films can benefit by generating extra attention. I argued that factors such as screening location, screening capacity and screening time matter to the value creation process and the ability to secure a strong presence within the sales market. Film screenings are thus important tournaments of values through which power is exercised and some films are able to raise more attention than others.

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This chapter has also drawn attention to the impact of value creation on the film sales process. While there are important differences in how bigger and smaller sales agencies position themselves in the market, they have also developed different sales strategies. It is clear that the bigger sales agencies sell the most attractive film projects, and that the financing of such films is heavily reliant of pre-sale deals in a pre-production stage. The sales process of those films relies primarily on promotional activity through private screenings and/or promo screenings. Smaller sales agencies, on the other hand, sell mostly smaller film projects. Their films are usually sold to distributors by the time that films are completed. It is for those completed films in particular that market screenings, press screenings, festival screenings become important tournaments of values, substantially supporting the film sales process if they are able to generate attention and industry buzz. Overall, while it has become clear that it is a priority for films to take part in sales markets, the subsequent process of creating awareness for films is challenging because competition is fierce. Tournament of values exerts an important influence over the sort of access given to specific films. The analysis in this chapter has thus demonstrated that sales markets are impacting on gatekeeping arrangements between sales agents and distributors.

References Appadurai, A. (1986). Commodities and the Politics of Value. In: A. Appadurai (Ed.), The Social Life of Things: Commodities in Cultural Perspective. Cambridge: Cambridge University Press, pp. 3–63. Cheung, R. (2011). East Asian Film Festivals: Film Markets. In: D. Iordanova and R. Cheung (Eds.), Film Festival Yearbook 3: Film Festivals and East Asia. St. Andrews: St. Andrews Film Studies, pp. 40–61. DDA. (2015). DDA Homepage. [Online]. Available at: https://www.theddagroup.com/internationalfilmandtv/ [Accessed 6 May 2015]. EFM (European Film Market). (2015a). Exhibitors Guide European Film Market. Report for Attendees of the 2015 European Film Market. EFM (European Film Market). (2015b). Exhibitors Guide: Martin-Gropius-Bau and Marriott. Report for Attendees of the 2015 European Film Market. EFM (European Film Market). (2015c). European Film Market 2015: Film Regulations. Report for Sales Agents at the 2015 European Film Market. EFM (European Film Market). (2015d). EFM 2015 Screening Schedule. Report for Attendees of the 2015 European Film Market.

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EFM (European Film Market). (2015e). General Terms and Conditions for Stand/Office Rental at the EFM 2015. Report for Attendees of the 2015 European Film Market. Entwistle, J. and Rocamora A. (2011). Between Art and Commerce: London Fashion Week as Trade Fair and Fashion Spectacle. In: B.  Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 249–269. Havens, T. (2011). Inventing Universal Television: Restricted Access, Promotional Extravagance, and the Distribution of Value at Global Television Markets. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 145–168. Keslassy, E. (2013). Morgan Freeman Set to Topline in ‘Lucy’. Variety. [Online]. 13 July 2013. Available at: http://variety.com/2013/film/global/morganfreeman-set-to-topline-in-lucy-1200563416/ [Accessed 8 April 2015]. Knol, M. (2015). Private Interview with the Director of the EFM Sales Market via Skype, 30 June 2015. Lodderhose, D. (2011). Madonna to Promote ‘W.E.’ in Berlin. Variety. [Online]. 11 February 2011. Available at: http://variety.com/2011/film/news/ madonna-to-promote-w-e-in-berlin-1118032067/ [Accessed 4 April 2015]. Macnab, G. (2014). Curzon Takes Andrew Haigh’s 45 Years for UK. Screen International. [Online]. 15 May 2014. Available at: https://www.screendaily.com/news/curzon-takes-45-years-for-uk/5071784.article [Accessed 7 April 2015]. Marché du Film. (2015). Key Figures. [Online]. Available at: http://www. marchedufilm.com/en/quisommesnous/chiffrescles [Accessed 2 January 2015]. Moeran, B. (2011). The Book Fair as a Tournament of Values. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 119–144. Moeran, B. and Pedersen, J. (2011). Introduction. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 1–35. Pham, A. (2009). Beki Probst: EFM Director. Cineuropa. [Online]. 12 February 2009. Available at: http://www.cineuropa.org/it.aspx?t=interview&l=en& did=90139 [Accessed 16 April 2015]. Vierzig, T. (2015). Private Interview with the Head of Film Administration of the EFM Sales Market via Skype, 9 July 2015. Wiseman, A. (2015). ‘45 Years’ Becomes First £1m Day-And-Date Film in UK. Screen International. [Online]. 9 September 2015. Available at: http://www. screendaily.com/news/distribution/45-years-becomes-first-1m-day-and-datefilm-in-uk/5092741.article [Accessed 15 February 2017].

PART II

Gatekeepers and Gatekeeping Networks

Having established a contextual understanding of the film distribution business and the film sales process, I will turn my attention to specific case studies of sales agents and distributors, and their role as gatekeepers. In particular, I am interested in how they impact on the circulation of films in international markets, well beyond the local, national markets within which they originate. I will develop a conceptual and analytical  understanding of gatekeepers and gatekeeping networks in the film distribution business.

CHAPTER 4

Analysing Sales Agents as Gatekeepers

4.1   Sales Agents Sales agents organise the sale of film rights to distributors in the international marketplace. They represent films from particular producers and negotiate deals with distributors operating in national markets or in (bigger) territories of several countries. Given the influence of sales agents on processes of cultural flow, it is surprising how little scholarly attention has been paid to their role. Although their role is often acknowledged in scholarship about distribution operations in the film industry, it remains unclear how they operate as gatekeepers. Their labour and work practices are often described in industry manuals that serve as a guide for filmmakers, such as contributions by Jon Reiss (2010), Stacey Parks (2012) and Gini Scott (2015). Those contributions are usually written from the point of view of producers, giving a particular slant to how they understand the role of (and their own professional experiences with) sales agents. Angus Finney and Eugenio Triana (2015), both former industry professionals, also make a contribution to the understanding of various business aspects of the contemporary film industry, including sales agents. They develop case studies of films to provide insight into the functions of producers and sales agents. This helps us begin to understand the operations of sales agents, but a more comprehensive empirical consideration is needed to make greater sense of their role as gatekeepers in analytical terms.

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In this chapter, I will first provide insight in analytical discussions around the concept of the gatekeeper. It is, for instance, important to establish that gatekeeping decisions are negotiated under specific circumstances and require relationships with organisations operating at different levels of the supply chain. In addition, there are tensions and contradictions that exist between creativity and commerce. Because sales agents and distributors work with producers and creative talent, they may interfere in the creative process of films. I will subsequently analyse the profession of sales agents in depth, defining the sorts of roles and business functions they perform as gatekeepers, the types of companies of which the sales community is made up, and the political influence of trade associations, funding bodies and other film agencies. This analysis of sales agents will be taken further in Chap. 5, where their involvement in the development, production and distribution of three films will be examined. It enables me to demonstrate how they organise the metaphorical process of opening the gates to let some films through and secure (sometimes substantial) market access, while closing the gates to prevent other films from gaining access to the market.

4.2   Gatekeepers and Other Types of Intermediaries The process of enabling and regulating the circulation of creative works in the highly mediated space between producers and consumers has received much attention. Scholarly work has focused on the range of intermediary organisations operating between producers and consumers. Sales and distribution professionals have been variously identified as ‘gatekeepers’, ‘brokers’, ‘middlemen’, ‘cultural intermediaries’ and ‘promotional intermediaries’. The work of Paul Hirsch (1972), Keith Negus (2002), Aeron Davis (2013) and Jennifer Smith Maguire and Julian Matthews (2014), for instance, has demonstrated the need for gatekeepers and other types of intermediaries in connecting the stages of production, distribution and consumption, adding specialised knowledge and expertise to the value of cultural products. Hirsch (1972) already noted in the early 1970s that this is particularly true of those organisations working in sales and distribution because the decisions they make have an immediate impact on filter processes and cultural flows. Davis (2013), in addition, notes that these sales and distribution companies work together with (and are reliant on) a range of other intermediary organisations working in areas such as marketing, promotion and news media, providing the necessary technical and

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communication skills to support and promote creative works in the marketplace. The fact that scholarship has paid so much attention to concepts as gatekeepers and cultural intermediaries also underpins broader industrial and cultural developments. The development of globalisation in the past decades has brought about a growing emphasis on questions of cultural flow and the ways cultural products secure access to international markets, and inherently on the involvement of gatekeepers and cultural intermediaries. It is important to note that the concept of cultural intermediaries is often used in a different context that the concept of gatekeepers. Based on the influential work of Pierre Bourdieu (1984), the concept of cultural intermediaries is often loosely employed to refer to the full range of occupations and professions that contribute in one way or another to the creation and circulation of creative works: from those working as producers, distributors or exhibitors to adjacent professions like scriptwriters, publicists, marketing agencies and advertising agencies. While the concept of cultural intermediaries is often employed in a variety of contexts, the more specific concept of gatekeepers is often employed to describe powerful occupations and professions with decision-making authority over the creation and circulation of creative works. That is to say, they decide which creative works are let through the gates as they move from the early stage of development, to production, to distribution and ultimately to consumption; how those products pass through those gates; and what is barred. Their ability to control cultural flows separates them from other types of cultural intermediaries in conceptual terms. Given that such decision-­making takes place at different levels and stages of the supply chain, gatekeepers have also been operationalised metaphorically as organisational filters (Hirsch 1972; Godart and Mears 2009). Gatekeeping has always been about regulating cultural flow, with a particular emphasis on influencing processes of access, creativity and diversity. This process has been explored from the perspective of both production and distribution companies (Negus 2002; Thompson 2010). Such studies reveal that gatekeeping entails more than simply opening and closing gates. For instance, Negus places emphasis on the organisation of the gatekeeping process, and the need for engagement with creative talent to carry projects forward: Taken alone, the gatekeeper concept is limited by the assumption that cultural items simply appear at the ‘gates’ of the media or culture producing

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corporation where they are either admitted or excluded. Not only is content actively sought out (someone has to go and find the talent or the story), it can be systematically planned, with staff in the organization deciding in advance the genre of story, music or film they are seeking and encouraging its internal construction or sub-contracted production. (2002: 510)

Negus demonstrates that the conceptual parameters of the concept mean that a literal interpretation of gatekeepers is only helpful to a certain degree. There is a need to analyse the organisation of the gatekeeping process because relationships between authors, agents and publishers are not always linear, as Thompson describes for the publishing industry: The interaction is much more complex than it might at first seem. Sometimes it is a simple linear process: the author writes a text, submits it to an agent who takes it on and then sells it to a publisher. But often it is much more complicated than this simple linear process would suggest: an agent, knowing what publishers are looking for, often works closely with his or her clients to help shape their book projects, especially in the area of non-fiction, and proposals may go through multiple drafts before the agent is willing to send them out, or a publisher may have an idea for a book and seek to commission an author to write it, and so on. (2010: 16)

His description provides insight into multiple factors that may impact on the development of creative works before they reach publishers and that publishers can in some cases exert more control over the creative process than in others. Thompson goes on to draw attention to the nature and complexity of relationships between authors, agents and publishers: It is not altogether unhelpful to think of agents and publishers as ‘gatekeepers’ of ideas, selecting those book projects they believe to be worthwhile from the large number of proposals and manuscripts that are submitted to them ‘over the transom’ by aspiring authors and rejecting those that don’t come up to scratch. But even in the world of trade publishing, which probably concurs with this model more closely than other sectors of the publishing industry, the notion of the gatekeeper greatly oversimplifies the complex forms of interaction and negotiation between authors, agents and publishers that shape the creative process. (2010: 17)

The fact that publishers may become involved in an early stage of the development process means that they can intervene creatively as ­gatekeepers who are expected to know what sells in international markets.

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However, as Thompson describes, their ability to intervene in the creative process is reliant on interactions and negotiations with creative talent and agents. I will elaborate on such interactions and negotiations in the next section because they are also common in the film industry.

4.3   Tensions Between Creativity and Commerce There is a broader discussion to be had about the relationship between creative talent and business professionals in media and creative industries. Scholarship has argued that this relationship is often conflictual given the tensions and contradictions that exist between creativity and commerce. Keith Negus and Michael Pickering (2004: 47), for instance, have observed that such tensions exist between creators (the artists) and producers. Creators and producers are dependent on each other, although they may have divergent interests: Moving from the moment of acquisition, a further question concerns the degree to which personnel within various media and cultural producing organisations will intervene in the creative process, and the reasons they may have for doing this. This is another issue that is frequently highlighted by musicians, writers and film makers. Their first complaint usually concerns the difficulty of getting signed; their next grudge concerns the degree of ‘artistic freedom’ which may or may not be experienced. Here we must recognise that due to the organisation of modern production it has become increasingly impossible to produce a cultural artefact alone without the intervention, assistance, guidance, collaboration or hindrance of other people. (2004: 55)

Negus and Pickering note that tensions between creativity and commerce are characteristic for the collaborative nature of the production process. Taking the film industry as an example, they also discuss differences between artistic and commercial films. In particular, directors of art-house films are known for their distinctive (and often consistent) style and therefore their relative power over the creative filmmaking process. However, they note that “Even relatively distinctive film directors are not immune to unwelcome interference, which can occur at any stage of the production process” (2004: 57). Such interference in the creative process is often analysed from the perspective of producers rather than the perspective of sales and distribution

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companies, who may equally exert an influence over the creative process. In terms of the film industry, Finney and Triana (2015: 66) note that sales and distribution companies often exert such creative influence if they play an important role in the financing of particular films. For the $14 million film The Reckoning (2002), for example, they demonstrate that Paramount Classics (the specialised arm of Hollywood studio Paramount Pictures) acquired distribution rights and in return demanded several changes to a finished version of the film. On Screening, Paramount Classics [a distributor in this context] bought North America, Japan, Latin America, South Africa, and the Middle East for $1.75m, but demanded a new music score, and significant edits and a two-­ day re-shoot. The additional ‘cost’ of the deal was around $130,000, which was to be split 50–50 between Renaissance [the producer and sales agent], and Paramount. (2015: 49)

It is thus important to acknowledge that the gatekeeper role of sales agents and distributors may also extend to the creative process of films. On the one hand, their interventions in creative processes may be necessary to support the commercial performance of films. On the other hand, they may undermine the creative work and vision of talent and producers.

4.4   The Role of the Sales Agent Having established a conceptual understanding of gatekeepers, I will now inform in more depth about the role of sales agents. I focus on their acquisition process and distribution strategies to analyse their labour and work practices. Film Acquisition In terms of the business functions and activities of sales agents, Parks (2012), Scott (2015) and Finney and Triana (2015) note that film acquisition is an essential part of their work. Sales agents follow new films in development, informing themselves and others about the development of the film production process, and responding to market opportunities; they consider when to engage with specific projects, how much influence they can have and what type of distributors they will attract; and they predict the commercial and cultural values that such films might have to appeal to

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international audiences. In other words, they assess film projects developed under specific circumstances and negotiate specific terms with producers. It is, in this respect, important to note that sales agents become attached to projects at different stages of the film production process. Thus, they may become attached when the film project is developed and prepared in a pre-production stage; or when the film has formally moved into the production stage; or after shooting in the post-production stage; or when the film is completed (i.e. the finished stage). The commitment of a sales agent in the early stages of the production process is particularly reliant on the film’s package. Finney and Triana (2015: 28) note that elements such as the script, production budget, (co-)production partners, leading actors and the director(s) impact on the decision-making of sales agents. In particular, the production budget is broadly indicative of the sort of films developed, the way they are financed, and the need for pre-sales, as discussed in Chap. 2. It is clear that films with relatively high budgets are usually reliant on pre-sales with international distributors: they need the commitment of a sales agent in the pre-production stage to introduce these films to international distributors and raise sufficient pre-sales financing to move into production. Finney and Triana (2015: 42) note that films will not generally receive a ‘green’ light to move into production if financing is not in place or guaranteed.1 It is the task of the lead producer to make this decision, taking into consideration the sort of funding that is secured from private investors, public funding bodies, tax breaks, co-production partnerships and international distributors. From interviews with several sales agents and distributors in the UK market, it became clear that film projects with budgets higher than £5 ($7.5) million are particularly in need of a sales agent in the pre-­production stage to be able to secure pre-sales financing. Most of such projects fall in

1  There are various forms of film investment, such as equity, debt and gap financing. First, distributors provide equity financing for acquiring the distribution rights of films; they negotiate a price for which they control the revenue streams in return. Second, debt financing is a loan provided by financiers (usually with interest) to contribute to the financing of films. Third, gap financing is a loan provided by financiers if extra financing is needed to move into production. Gap financing is often based on the predicted value of key territories for which distribution deals are negotiated after the green-lighting decision (Finney and Triana 2015: 250–262).

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budget categories between £5 ($7.5) million and £15 ($22.5) million, but some of these projects are made on even higher budgets. Given that such projects are usually developed with well-known film actors and directors attached, they are introduced as high-profile films in the film sales markets. Sales agents, particularly the bigger ones, are therefore keen to get involved with such projects if they become available to the sales business. In fact, because film production companies with in-house sales departments often develop such high-profile projects, it is often the case that such films already have a sales agent attached before they are introduced in the marketplace. It is also worth noting that some producers have established output deals with sales agents, whereby sales agents become automatically attached to new films developed by producers. Such arrangements are particularly common between sales agents and producers from the same country. In terms of the remaining high-profile projects, which are introduced in the marketplace without a sales agent attached, the competition amongst sales agents to represent these films to international distributors is fierce. Because such high-profile films are usually reliant on pre-sales, sales agents perform an important gatekeeper role in securing distribution deals and enabling the bigger films to move into production. This can be a challenging process. Finney and Triana (2015: 42) note that it is by no means unusual that some film projects will need to be re-developed and re-­ packaged to convince financiers and distributors, and secure more financing to move into production. On the other hand, there are also projects that are perceived as too risky and therefore fail to secure the financing needed to move into production. In other words, the role of sales agents is essential in the filtering process of high-profile projects, directly impacting on the process of enabling or disabling access. In addition to such high-profile films, sales agents become attached to smaller films on offer in the marketplace, produced on budgets below £5 ($7.5) million. These films are usually local or national films, which are designed to appeal to audiences in specific countries or territories. However, many such films are also picked up by sales agents and brought into international markets, well beyond the national or domestic market in which they originate. By way of comparison, the financing of such films relies more heavily on public funding and private investors and is less dependent on pre-sale deals with distributors (Finney and Triana 2015). While it is a fact that the global marketplace for films is made up of many such smaller, low-budget productions, there is less competition between

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sales agents for these films. As a result, sales agents can afford to be more selective about which of those films they will support, and in which stage of the production process they become attached. Thus, they may become attached at the pre-production or production stage, when they can bring in creative and business expertise to prepare films for international sales; or they may wait until the first filmed materials become available, and commit at the post-production or finished stage (Creative Europe 2017).2 Here, sales agents become involved in a filtering process that is not necessarily related to the green-lighting process of films. Instead, they search for smaller films with international appeal, and it is the overabundance of potential contenders that means that some projects will be excluded and fail to gain access to the next stage. Distribution Strategies Parks (2012), Scott (2015) and Finney and Triana (2015) also provide useful insights into distribution strategies. Once sales agents commit to films and become attached, they take control over the distribution process and develop a strategy to bring films to the attention of (international) distributors, film festivals and the media. Thus, they develop a sales plan and a marketing campaign, while also maintaining close relationships with festival programmers. As noted in Chaps. 2 and 3, sales markets are key to establishing the profile of films, negotiating distribution deals and enabling access to international markets. Deals with distributors in international markets are usually negotiated on an all-rights basis, which enables  distributors to release films in cinemas, on DVD and Blu-ray in physical disc market, in the online video-on-demand (VOD) market, in the television market, and in other ancillary markets. In some countries or territories, sales agents also negotiate deals directly with the retail or exhibition sector if distributors are not prepared to acquire all rights. This capacity to release and circulate films internationally is yet another filter which relates to the notion of gatekeeping and the process of enabling access. On the one hand, sales agents secure distribution and open the gates to national markets or territories worldwide; on the other hand, only few films manage to secure such access, and the gates to many international markets remain closed to the majority of films. While organising the 2  I contributed as a consultant and researcher to the Creative Europe report ‘Circulation of European Films: The Distribution Sector Perspective’, which will be completed in 2017.

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distribution process of films, sales agents are also able to exert influence over audience preferences and perceptions as contributors to the process of tastemaking.

4.5   The Sales Community A consideration of sales agents also requires an understanding of the types of companies of which the sales community is made up. Chapter 2 informed about the historical development of the sales community, with stand-alone (high-profile) sales companies entering the market in the late 1970s and early 1980s to sell films that were not represented by (in-house) sales departments of integrated production and distribution companies. The sales community expanded considerably in subsequent years. In a contribution about the film business by industry observer Martin Dale, he develops a typology of sales companies in the US and Europe in the mid-­ 1990s (1997: 84). I will draw on his analysis as a point of comparison for developing a typology of sales agents in the contemporary film industry. A Typology of Sales Agents in the Mid-1990s Dale notes that there were more than 200 sales companies in the mid-­ 1990s, which could be broken down into four broad categories (1997: 84). He defined these four categories by the nationality of the companies involved, the size of their organisations, and their sales and distribution arrangements. The two most powerful categories identified by Dale were a small cluster of nine ‘prestige’ sales companies, constituting an oligopoly that accounted for as much as 40% of international sales; and a slightly larger cluster of 20 ‘crossover’ sales companies which accounted for a further 20%. The sales community also included two further clusters to which a much larger number of hundreds of smaller sales companies belonged: ‘niche sales companies’ and ‘direct-to-video sales companies’. Although those clusters were larger in size than the prestige and crossover clusters, they accounted for a relatively small share of international sales. Dale was also attentive to the sales operations of the leading Hollywood studios (the majors). These studios, as explained in Chaps. 1 and 2, would distribute films mainly through their own global network of distribution offices, rather than negotiating individual deals with a range of distributors. The role and function of their sales departments was thus very different to how other sales companies in the independent sector of the business

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operated to finance films and negotiate distribution deals, which is why they were excluded from his typology of sales companies. Returning to the four categories identified by Dale, he notes that the prestige category included six US sales companies (Carolco, Castle Rock, Morgan Creek, Miramax, New Line and Summit) and three UK sales companies (Majestic, PolyGram and Rank). Some of them had developed strong ties to Hollywood majors (or their subsidiaries), and they organised distribution mainly through their offices in markets worldwide; others established in-house offices in some key markets or territories, and relied on output deals with non-Hollywood studios or large distributors in other markets or territories to organise distribution (1997: 78). In terms of the crossover category, 18 out of the 20 companies Dale identified were of either US or UK origin. They were large production companies with in-house sales departments and typically relied on output deals with selected distributors to raise financing and secure distribution in their territories. The niche category, by contrast, comprised US sales companies, UK sales companies, as well as a range of sales companies from other European countries. Dale further notes that the prestige and crossover companies worked with organisations of respectively up to 30 employees and 12 employees, while niche sales companies and direct-to-­ video sales companies worked with smaller teams. A New Typology Dale’s typology of sales agents in the 1990s is helpful in understanding how the sales community has developed over the last 20 years. New sales companies have emerged in this period, affecting existing hierarchies and the clusters of sales companies. I already noted in Chaps. 3 that I observed different types of sales agents at the EFM sales market, which were loosely categorised as a group of bigger sales agents and a group of smaller sales agents. However, in this chapter, the typology will be developed further. I will identify four categories of sales activity in the contemporary film industry, which overlap with and diverge from Dale’s typology in various ways (Table 4.1). First, given the importance of powerful studio corporations in the global marketplace, it makes sense to include a category of Hollywood and non-Hollywood studios (tier 1) to make the typology of sales companies more comprehensive. The six major Hollywood studios are Warner Bros. Entertainment, Walt Disney Studios, Universal Studios, Sony

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Table 4.1  A typology of sales agents in the contemporary film industry Different types of in-house or stand-alone sales agents Hollywood and non-Hollywood studios (tier 1)

Examples of sales companies

The six major Hollywood studios and the non-­ Hollywood studio Eros International. Sales-financing-­ EuropaCorp, Pathé, production StudioCanal, Trust/ companies (tier 2) Nordisk, IM Global, Lionsgate and Entertainment One. Specialised Beta Cinema, HanWay companies (tier 3) Films, Films Distribution, LevelK, The Match Factory and Protagonist Pictures. Stand-alone MovieHouse companies (tier 4) Entertainment, Park Entertainment and Parkland Pictures.

Business operations and distribution strategies

Fully integrated production and distribution structures through which films are distributed in most countries and territories. Partly integrated production and distribution structures. Distribution relies heavily on output deals and one-off deals with distributors. Principally stand-alone sales organisations. Distribution relies on output deals and one-off deals with distributors. Principally stand-alone sales organisations. Their business is more reliant on sales directly to companies in the home video and television markets.

Pictures Entertainment, 20th Century Fox and Paramount Pictures. In addition, the major Indian studio corporation Eros International is an example of a non-Hollywood studio that operates with a global distribution network in more than 50 countries, as they note on their website (Eros International 2017). As noted in Chaps. 1 and 2, the studios identified in tier 1 work with vertically integrated production and distribution operations; the films they engage with are distributed through globally integrated distribution networks. For instance, Warner Bros. Entertainment is the lead producer of popular franchises such as Harry Potter (2001–2011) and Batman (1989–2016). The distribution of those films in most countries or territories is organised through their own distribution offices, while they collaborate (usually as part of output deals) with other studios or local distributors in some smaller markets. In addition to such integrated operations, the Hollywood studios occasionally participate as buyers and sellers in the independent sector of the business, often through their subsidiary arms.

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In some cases, they decide to sell the distribution rights of their films for some countries or territories at sales markets; in other cases, they decide to acquire distribution rights of attractive projects on sale in the marketplace. Second, while Dale distinguished between prestige and crossover companies in the 1990s, they are now more commonly labelled together as ‘sales-financing-production’ companies (tier 2) in the trade press. Like the studios and their subsidiaries, they are often financiers and (co-)producers of the films they represent internationally. However, the distribution of their films relies heavily on output deals and one-off deals with international distributors, and only some of them work from distribution offices in (a few) international markets. Because such partly integrated operations of sales-financing-production companies put limits on distribution, they occasionally negotiate deals with Hollywood studios to organise distribution through their global networks. Examples of such sales-financing-­ production companies are the European companies EuropaCorp, Pathé, StudioCanal and Trust/Nordisk and the North American companies IM Global, Lionsgate, Entertainment One, FilmNation Entertainment, Sierra/Affinity, The Weinstein Company and Mister Smith Entertainment. Some commentators note that this cluster of sales-financing-­production companies expanded when the focus of Hollywood studios shifted to the production of a small number of massive-budget tentpole films in the late 2000s. For instance, The French corporation EuropaCorp has produced films such as Lucy (2014), Taken 3 (2014) and The Transporter Refueled (2015) on budgets varying between $25 and $50 million. They were the lead producer of those films, which they then sold through their own sales department. They also operated as a distributor in the French home market, while they negotiated output deals in as many as ten distribution territories, including the US and China. As the head of sales, Marie-Laure Montironi notes: “We’ve expanded [our] policy to make sure we have some faithful partners around the world” (quoted in Goodfellow 2015). Those output deals also help to secure financing for films: “Knowing we already have at least 10 territories on a pre-financing plan makes our lives a lot easier” (quoted in Goodfellow 2015). There are examples of successful franchises which have come out of the film slates of sales-financing-­ production companies, including The Hunger Games franchise (Lionsgate), the Twilight films (Summit Entertainment), the Taken trilogy (EuropaCorp) and The Transporter franchise (EuropaCorp).3 For some of 3

 Lionsgate acquired Summit Entertainment in 2012.

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their most recent films, such as The Hunger Games: Mockingjay (Part 2) (2015) and The Twilight Saga: Breaking Dawn (Part 2) (2012), they worked with budgets in the range of $100–$200 million, resembling the (extreme) economic standards of Hollywood blockbusters or tentpoles and demonstrating that they are serious players in the business. The third tier of sales companies today involves a bigger group of small and medium-sized enterprises (SMEs). In comparison with Dale, I call them ‘specialised’ sales agents rather than niche sales agents. They have established partnerships with production companies dealing with smaller, specialised films, and are particularly known for their commitment to specific directors or film genres. While they operate principally as sales outfits, they occasionally become attached as co-financier and/or co-producer of films. In terms of distribution, they operate on a smaller scale than sales-­ financing-­ production companies; rather than controlling distribution through partly integrated structures (e.g. by establishing offices in some international markets), they rely more commonly on output deals and one-off deals with international distributors. This segment of specialised sales agents is less dominated by US companies and UK companies, involving a range of companies from around the world, particularly from France and Spain. The European companies include Beta Cinema (Germany), HanWay Films (UK), Films Distribution (France), LevelK (Denmark), The Match Factory (Germany), Protagonist Pictures (UK) and Latido Films (Spain). Beta Cinema is a good example of a specialised sales agent, selling a combination of low- and medium-­ budget films. At the 2015 Berlin Film Festival, for instance, they were selling low-budget films such as The Farewell Party (2014), Labyrinth of Lies (2014) and Walter (2015), but also films such as Colonia (2015), made on a budget of $14 million. In terms of their business operations, they occasionally become attached as co-financier or co-producer. Their Managing Director, Dirk Schürhoff, noted in an interview that they also hold an ownership stake in the German production company Majestic Film to sell their films internationally (Schürhoff 2015). In the case of Colonia, for instance, Majestic Film was a co-financier and co-producer, while Beta Cinema negotiated international sales. A fourth and final tier of sales agents in today’s film industry consists of a large group of ‘stand-alone’ sales companies. They act principally as stand-alone sales agents, working with small sales teams, and engaging primarily with low-budget, art-house films or low-budget, mainstream films in popular genres such as drama, thriller, horror and comedy, but usually

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without well-known film stars or directors attached. Because of limited available theatrical space for such films in cinemas, the stand-alone sales agents might negotiate deals directly with international companies in the home video market (physical and online) and television market, if this provides a more efficient and effective way of securing international distribution than negotiating (all-rights) deals with international distributors. Dale’s description of direct-to-video sales companies (now also known as straight-to-DVD or straight-to-VOD) thus applies partly to sales companies working in this segment. It is, however, worth noting that the definition of the straight-to-VOD label is changing with the development of the online VOD market, because even some big-budget films are released straight-to-VOD. I will demonstrate in Chap. 9 that this development is impacting on the status of the straight-to-VOD label as an analytical category. Examples of stand-alone sales companies in the UK include MovieHouse Entertainment, Park Entertainment and Parkland Pictures. MovieHouse Entertainment, for instance, is run by a small team consisting of two experienced sales and distribution executives, a marketing and production manager, and a representative based in Los Angeles. They represent low-­ budget, mainstream films such as Hallows Eve (2016) and ID2: Shadwell Army (2016), which have to compete fiercely for screening space in cinemas, since films made on bigger budgets occupy most of the available theatrical space for films that appeal to mainstream audiences. However, their content appeals to mainstream audiences in the physical disc market (as sold in supermarkets, department stores, entertainment stores, etc.), and the online VOD market. In terms of international sales, it often makes sense to bypass the international distributor in this context and negotiate a deal directly with home video companies to save costs on distribution fees. This typology demonstrates the range of companies working in  the sales community. In line with Dale’s typology, a top-down hierarchy is observable, with a few large companies in powerful positions at the top and a large number of small specialised and stand-alone companies at the bottom. Dale writes of a community involving more than 200 sales companies, but this number has clearly increased in the last two decades; for instance, 607 sales companies participated in the 2016 Cannes sales market (Marché Du Film 2016).

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4.6   Public Support Agencies Like any other distinctive activity of the film supply chain, the sales community is supported by the policy activities of national film agencies and funding bodies, supranational support bodies and sales associations. National film agencies support national productions in the international marketplace with the purpose of promoting home-grown creative talent, local film companies and workforce in the creative economy. They develop policies to stimulate cultural diversity, national identity and national values, particularly by providing financial support for smaller (national) films. Thus, as noted in Chap. 3, they coordinate umbrella stands in the key sales markets to bring together financiers, film bodies, producers and distributors from their respective countries. These various bodies and companies organise meetings with international clients to talk about film locations, co-production partnerships and post-production facilities, while sales agents use this space to discuss new projects in development and distribution deals. National agencies, also  called screen agencies, also provide funding support for film projects: they have developed (competitive) schemes to  support various aspects of the filmmaking process. Most of their funding support is for film development, production and exhibition, but there is also support for international sales and distribution (Creative Europe 2017). The British Film Institute (BFI), for instance, has developed a film export scheme for films selected for international festivals and they have created the brand ‘We Are UK Film’, under which British film companies form a collective to represent and promote UK films to the international film business (BFI 2015). For instance, the film collections and the company details of UK sales agents are included in their marketing materials. Similarly, in France, the brand ‘UniFrance’ (French Cinema Worldwide) has been established to support French films in the global marketplace. They also organise an important event, the Rendez-Vous, in Paris every year to attract international buyers and increase international sales for French films, as noted by trade reporter Goodfellow (2016). National film agencies in other European markets work with comparable brands to support their film industries. They also work with comparable funding schemes, although there are huge differences in the amount of funds allocated to international sales. In some European countries, film agencies have decided only in recent years to make funds available to support international sales. For instance, the national film agency in France, Centre

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National du Cinéma (CNC), has been supporting French sales agents financially since 2013, as trade reporter Keslassy (2015) notes.4 On a European level, the European Union support mechanism for the audiovisual industries, Creative Europe, provides funding for the development, production, sales, distribution and consumption of European films (Creative Europe 2017). Financial support for sales and distribution is provided through schemes such as ‘automatic’ and ‘selective’ funding, and ‘online distribution’ funding. Automatic funding is awarded to sales agents and distributors who regularly engage with European films, while selective funding is awarded to European distributors who become occasionally attached to selected European films. The various online distribution schemes provide support to sales agents, distributors and VOD services who increase the visibility of European films online, particularly in countries where European films are not likely to be released in cinemas. European sales agents can also rely on the support of the Creative Europe Network by  participating in their umbrella stands at the sales markets. Furthermore, Creative Europe supports the European Film Promotion Network, which provides financial support for sales agents to participate in film festivals and sales markets outside Europe. Eurimages is another pan-European funding organisation developed to support European productions and the distribution and consumption of European films. It provides, amongst others, support for distributors who are based in member states of the Council of Europe, with no access to the Creative Europe programme, such as Turkey, Switzerland and the Russian Federation. The Council of Europe includes 47 member states and is not to be confused with the European Union (which comprises 28 European countries), although they are both associated with the same European flag. Also important is the role of sales associations such as the Independent Film and Television Alliance (IFTA). As described in Chap.  2, IFTA replaced AFMA in 2004, which has been a sales association since 1980. 4  In France, sales agents have established their own sales association, which is called ‘Association des Exportateurs de Films’ (ADEF). The association was founded in 1999 with the purpose of strengthening relationships amongst French sales agents and establishing a collective through which their films are promoted in the international marketplace (ADEF 2016). In 2015, the CNC and ADEF presented a new subsidy plan for French sales agents, which is worth €15 million per year (Keslassy 2015).

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IFTA protects the interests of independent film and television companies in the global marketplace. On their website, they note that they negotiate regulations and terms with national and supranational policy bodies on behalf of more than 135 members, including finance companies, producers, sales agents and distributors from more than 20 countries, and some of them are sales-financing-production companies (IFTA 2016). They also note that some of their biggest concerns include intellectual property rights, anti-piracy regulations, access and barriers in the new online market, marketplace conditions and media consolidation (IFTA 2016). It is worth noting that the six Hollywood studios are not members of IFTA; they have their own trade association, the Motion Picture Association of America. There are also trade associations that are specifically designed to protect the interests of European film companies. In Europe, for instance, there is the European Producers Club for producers, Europa International for sales agents, Europa Distribution for distributors and Europa Cinemas for exhibitors. Europa International was founded in 2011 by the sales companies The Match Factory (Germany), TrustNordisk (Denmark) and Doc & Film International (France). According to their Managing Director, Daphne Kapfer, they were determined to establish a better dialogue with Creative Europe and its incentives to support sales agents (cited in La Porta 2014). Their efforts paid off, with the organisation quickly expanding to 35 members by 2014. Kapfer also notes that support from Creative Europe for sales agents increased significantly in that period, from €1.5 ($2.1) million to €2.7 ($3.6) million. The various public funding organisations and trade associations described above all have a role to play in the process of distributing films to international markets. Sales agents, however, remain responsible for the organisation of that process. This chapter has developed a baseline understanding of the profession of sales agents, the community they are part of, and policy activities developed to support their work. My analysis will be taken further in Chap.  5, where I will develop in-depth case studies of three films to analyse their involvement as gatekeeper in relation to notions of power and control.

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References ADEF. (2016). The French Association of Film Exporters. [Online]. Available at: http://www.adef.fr/ [Accessed 10 March 2016]. BFI (British Film Institute). (2015). Film Export Fund: Guidelines for Applicants. [Online]. Available at: http://www.bfi.org.uk/sites/bfi.org.uk/files/downloads/bfi-film-export-fund-guidelines-for-applicants-2015-11-1.pdf [Accessed 31 March 2016]. Bourdieu, P. (1984). Distinction: A Social Critique of the Judgment of Taste. Cambridge, MA: Harvard University Press. Creative Europe. (2017). Circulation of European Films: The Distribution Sector Perspective. An industry report produced by Creative Europe. Dale, M. (1997). The Movie Game: The Film Business in Britain, Europe and America. London: Cassell. Davis, A. (2013). Promotional Cultures. Cambridge: Polity Press. Eros International (2017). Eros International Homepage. [Online]. Available at: http://www.erosintl.com/company/ [Accessed 3 January 2017]. Finney, A. and Triana, E. (2015). The International Film Business: A Market Guide Beyond Hollywood. 2nd edn. London: Routledge. Godart, F. and Mears, A. (2009). How Do Cultural Producers Make Creative Decisions? Lessons from the Catwalk. Social Forces, 88(2), 671–692. Goodfellow, M. (2015). EuropaCorp: Seeing Red. Screen International. [Online]. 25 June 2015. Available at: http://www.screendaily.com/features/europacorp-seeing-red/5089799.article [Accessed 15 May 2016]. Goodfellow, M. (2016). Rendez-vous in Paris. Screen International. [Online]. 6 January 2016. Available at: http://www.screendaily.com/features/rendezvousin-paris/5098530.article [Accessed 8 January 2016]. Hirsch, P. (1972). Processing Fads and Fashions: An Organizational-Set Analysis of Cultural Industry Systems. American Journal of Sociology, 77(4), 639–659. IFTA (Independent Film and Television Alliance). (2016). The Global Trade Association for the Independent Motion Picture and Television Industry. [Online]. Available at: http://www.ifta-online.org/issues [Accessed 31 March 2016]. Keslassy, E. (2015). French Sales Agents, CNC Join Forces on New Subsidy Plan, Unveil White Paper. Variety. [Online]. 23 October 2015. Available at: http:// variety.com/2015/film/news/french-sales-agents-cnc-join-forces-on-newsubsidy-plan-unveil-white-paper-1201624990/ [Accessed 31 March 2016]. La Porta, D. (2014). Joint Strategies for International Sales Agents. Cineuropa. [Online]. 19 February 2014. Available at: https://www.cineuropa.org/en/ interview/252588/ [Accessed 12 May 2016]. Marché du Film. (2016). Key Figures. [Online]. Available at: http://www.marchedufilm.com/en/quisommesnous/chiffrescles [Accessed 12 September 2016].

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Matthews, J. and Smith Maguire, J. (2014). Introduction. In: J. Smith Maguire and J.  Matthews (Eds.), The Cultural Intermediaries Reader. London: Sage Publications, pp. 1–12. Negus, K. (2002). The Work of Cultural Intermediaries and the Enduring Distance between Production and Consumption. Cultural Studies, 16(4), 501–515. Negus, K. and Pickering, M. (2004). Creativity, Communication and Cultural Value. London: Sage Publications. Parks, S. (2012). The Insider’s Guide to Independent Film Distribution. 2nd edn. Waltham: Focal Press. Reiss, J. (2010). Think Outside the Box Office: The Ultimate Guide to Film Distribution and Marketing for the Digital Era. Los Angeles: Hybrid Cinema. Schürhoff, D. (2015). Private Interview with the Manager Director of the Specialist Sales Agent Beta Cinema via Skype, 23 September 2015. Scott, G. (2015). The Complete Guide to Distributing an Indie Film. Lafayette: Changemakers Publishing. Thompson, J. (2010). Merchants of Culture: The Publishing Business in the Twenty-­ First Century. Cambridge: Polity Press.

CHAPTER 5

Sales Agents and Their Gatekeeping Functions

5.1   Gatekeeping Functions Gatekeeping functions performed by sales agents at different stages of a film’s life cycle have an immediate impact on cultural flows, the access producers have to markets and the range of films available to audiences. In their paper ‘Brokerage, Mediation, and Social Networks in the Creative Industries’, Pacey Foster and Richard Ocejo (2015: 410) offer an analytical perspective that can be adopted to comprehend how gatekeeping functions are played out in different stages of the film sales process. They employ the notion of brokerage to analyse mediation processes in the space between production and consumption. While developing the work and typology of Roger Gould and Roberto Fernandez (1989: 409), they identify three different brokerage functions. The first involves gatekeepers engaging with search and selection activities; the second involves coordinators providing input to the production process; the third involves representatives organising promotional activities. These brokerage functions change progressively through the stages of production, distribution and consumption. My interpretation of such brokerage functions overlaps with, and diverges from, this perspective in various ways. Because my focus is explicitly on sales agents with decision-making authority, the more specific term gatekeeping is more appropriate than the less specific term brokerage. I will therefore refer to ‘gatekeeping’ functions rather than ‘brokerage’ functions. The various gatekeeping functions as well as their characteristics © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_5

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Table 5.1  A typology of gatekeeping functions Gatekeeping functions

Characteristic business activities

The search and selection function The coordinator function

Developing relationships with cultural producers. Participating in networking events. Influencing the creative and business process of cultural production. Engaging with promotional and tastemaking activities. Connecting cultural works to audiences.

The representative function

are summarised in Table 5.1. As demonstrated in the table, Foster and Ocejo’s analytical perspective remains helpful for comprehending different gatekeeping functions. Consistent with Foster and Ocejo, the first function involves search and selection activities for the acquisition of new projects. Havens (2011) and Moeran and Pedersen (2011), for instance, have demonstrated the importance of close relationships with cultural producers and the function of networking events such as sales markets in acquiring creative works. Second, those performing a coordinator function intervene in the creative and business process of cultural products, as established in the previous chapter. The creative and business input of sales agents is often needed to prepare projects for sales and distribution. Third, further down the supply chain, those performing a representative function engage with promotional and tastemaking activities while connecting cultural works to audiences. Important (international) events such as festivals and awards competitions are often used strategically to position cultural products with critics, the media and distributors (Moeran and Pedersen 2011; Mezias et al. 2011). I conceive the three gatekeeping functions identified as integral parts of what I call ‘the gatekeeping process’.

5.2   A Case Study Approach Foster and Ocejo (2015: 405) argue that there is still much to be done to understand how these functions are carried out at various stages and why they are needed. How do gatekeeping functions change in different stages and contexts of the gatekeeping process? What influence do they have in shaping and structuring work practices in the space between production and consumption? And how is their decision-making process organised? In order to answer such questions, I will analyse how sales agents organise the meta-

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phorical process of opening and closing the gates and how they introduce and promote films to international distributors. Drawing on interviews with senior executives of sales companies, this analysis involves in-depth case studies of three European films: The King’s Speech (2010), Ida (2013) and Oh Boy (2012). Each case study sheds light on the production context, the involvement of the sales agents and the role they perform in terms of enabling and disabling access to the market. Each of the three selected European films falls into a different budget category and is represented by a different type of sales agent: The King’s Speech is a medium-budget film represented by the American sales-­ financing-­production company FilmNation; Ida is a low-budget film represented by the Danish stand-alone company Portobello Film Sales; Oh Boy is a micro-budget film represented by the German specialised company Beta Cinema. Such different types of sales agents and the films they represent allow for an in-depth understanding of various aspects of their work. These aspects are important to explore in terms of how specific circumstances bring about different forms of interaction and negotiation to the gatekeeping process. I will develop an analytical understanding of their gatekeeper function and their ability to exert power and control over the gatekeeping process. Given the specific (and unique) creative and business context in which films are created and developed, a straight comparison between individual films is difficult, if not impossible. Sales agents may rely on routinised patterns and tried-and-tested strategies for films that are similar in terms of the package and budget, but they rarely develop identical marketing strategies and release strategies: partly because they are dealing with films that require a specific approach; partly because they are  responding to their competitors; and partly because market circumstances are shifting. While one objective of these case studies is to identify broad similarities in the approach of sales agents and the decisions they make, another is to identify particular strategies deployed in specific contexts. It is through this combination of generality and close detail that the concept of gatekeeping is developed.

5.3   The King’s Speech (2010) The first case study involves the well-known historical drama The King’s Speech (Table 5.2). It is based on information collated from various sources, including an interview with Gareth Unwin, the Managing Director of UK

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Table 5.2  The creative and business context of The King’s Speech The King’s Speech Director Leading actors Genre Country of origin and language Budget Co-producers Funding bodies Sales agent Distributor in the UK market Distributor in the US market

Tom Hooper (UK) Colin Firth (UK), Geoffrey Rush (AU), Helena Bonham, Carter (UK), Guy Pearce (AU) Biography, drama, history A UK-US co-production in the English language $15 million See-Saw Films (UK, AU), Bedlam Productions (UK) UK Film Council FilmNation (US) Momentum Films The Weinstein Company

production company Bedlam Productions; an analysis of the production and distribution context of The King’s Speech by Angus Finney (Finney and Triana 2015: 73–76); and secondary sources such as the trade press and newspapers. I also consulted the International Movie Database (IMDb) to learn about festival release dates, and the film database Box Office Mojo to learn about theatrical release dates in specific countries. The Co-producers The scriptwriter David Seidler originally developed the story as a stage play, but the UK film production company Bedlam Productions optioned the film rights for a screenplay adaptation and started the development process (Unwin 2013). Bedlam Productions partnered with the UK/ Australian production company See-Saw Films to develop the script, recruit creative talent and introduce the project to the international business (Finney and Triana 2015). The co-producers envisioned a budget of $15 million and developed the film’s package in order to raise financing largely from pre-sale deals with distributors (Unwin 2013). The well-­ known Australian film actor Geoffrey Rush and the up-and-coming Australian-UK director Tom Hooper were the first to commit to the project. See-Saw’s involvement in the UK and Australia was useful in terms of establishing the first distribution deals: they pre-sold the distribution

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rights for the UK ($1.6  million) and Australian market ($0.7  million) directly by themselves (Finney and Triana 2015). These deals were negotiated as part of a first-look arrangement between See-Saw Films and the UK distributor Momentum, while See-Saw Films and the Australian distributor Transmission have cross-shareholdings, as noted by trade reporters McClintock and Lodderhose (2010). The Involvement of FilmNation With these first pre-sale deals in place and the project circulating to international companies, further opportunities emerged when the UK distributor Momentum established a connection between See-Saw and the US sales company FilmNation, which was a new sales company in the business. Founded in 2008, FilmNation was already developing medium-­ budget projects such as The Road (2009) and Frozen (2010). The founder of FilmNation, Glen Basner, previously worked for well-known sales and distribution companies in the US, such as Good Machine and The Weinstein Company, and his experience with the latter company was crucial to developing a sales plan for The King’s Speech. He envisioned a key role for The Weinstein Company in acquiring distribution rights for multiple markets. Trade reporter Kay (2009) notes that Basner successfully negotiated a $6.1 million deal, with The Weinstein Company becoming formally attached as executive producer and acquiring the distribution rights in North America, Latin America, Benelux, Germany, France, Scandinavia, Hong Kong and China. The various (independent) distribution deals negotiated by See-Saw Productions and FilmNation were prioritised over an all-inclusive studio deal with the boutique arm of one of the Hollywood majors, Fox Searchlight, according to trade reporters McClintock and Lodderhose (2010). McClintock and Lodderhose further note that the UK Film Council, the UK Film Tax Relief Scheme, the private financier Prescience Film and the post-production company Molinare also invested financially in the film, allowing the co-producers See-Saw Productions and Bedlam Productions to formally move into production in November 2009.1 With the shooting completed by the end of December and the project in post-­ production, FilmNation started to sell the film rights to distributors in 1  Feature films that qualify for Tax Relief in the UK market receive a 25% rebate on production expenditures (BFI 2017).

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remaining territories around the world. The Berlin sales market in February 2010 and the Cannes sales market in May 2010 were key in this respect. In addition, while The Weinstein Company had acquired distribution rights for multiple territories in the pre-production stage, they negotiated deals with distributors in those territories. However, they retained the distribution rights for the US market because they operate as a distributor in that market. To summarise the gatekeeping process and the strategy of the co-producers and sales agent, it is clear that they opened the gate in order to enable distribution deals in selected territories in the pre-production stage, while the gate remained closed for other territories. This demonstrates their impact on shaping and structuring gatekeeping practice in the space between production and consumption. Another critical wave of distribution deals followed when the finished version of the film was shown in the film festival circuit. FilmNation and The Weinstein Company used the festival circuit strategically to position the film with critics and distributors, thus participating in the process of tastemaking and promoting the film to audiences. See-Saw Productions, FilmNation and The Weinstein Company followed a similar strategy to that adopted for Slumdog Millionaire in 2008. The King’s Speech was shown publicly for the first time at the Telluride Film Festival in September 2010, raising awareness and industry buzz among a group of cineastes. It was presented the next week to international buyers at the Toronto International Film Festival, where it won the People’s Choice Award. This audience prize is known as a strong (pre-)signifier for an Academy Award (Oscar) nomination: Slumdog Millionaire and Precious won the prize in 2008 and 2009 and were subsequently nominated for Oscars. The festival strategy, in combination with the positive response of audiences, enhanced FilmNation’s bargaining power, and they were able to negotiate many new distribution deals in remaining territories around the world, as Unwin noted in an interview (2013). The distribution rights were sold primarily to the bigger (non-Hollywood) distributors, including Eagle Pictures in Italy, DeaPlaneta in Spain and Cascade Film in Russia. They often deal with medium-budget films such as The King’s Speech, and it is this familiarity with the sort of audiences to which these films appeal that enables them to devise an effective festival and release strategy in local markets. Crucially, in terms of the release strategy in international markets, The King’s Speech was released in US cinemas in November 2010 to qualify for the 2011 awards season, with the Golden Globe and Academy Awards

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(the Oscars) taking place a few months later in January and February. In further anticipation of those award ceremonies, the film was released in ten additional countries, including the UK, Australia, Spain and New Zealand (Box Office Mojo 2016). While it was nominated for 11 Academy Awards, including Best Motion Picture of the Year, the release expanded to 46 countries in the four weeks leading up to the Academy Awards ceremony in February 2011 (Box Office Mojo 2016). The King’s Speech was very successful and won four Academy Awards, including Best Picture, with the release further expanding to 55 countries (Box Office Mojo 2016). The strategy of the international release, essentially organised in three different gatekeeping stages around the build-up to and follow-up from the Academy Awards, demonstrates how the promotional and tastemaking process helped to generate buzz and gather momentum. Consistent with Foster and Ocejo’s (2015) analytical perspective, it confirms that sales agents perform a representative function. The Role of FilmNation FilmNation played an important role in the financing and green-lighting process of The King’s Speech. The fact that they negotiated a deal with The Weinstein Company underscored their commitment and ambition as a new sales company in the business, while they were also able to make an impact on and convince distributors at the higher end of the market. The collaboration between See-Saw, FilmNation and The Weinstein Company meant that each of these companies brought in relevant expertise. With these relationships in mind, it is possible to identify three key moments in the gatekeeping process. First, See-Saw Productions negotiated distribution deals directly in the UK and Australian home markets, thereby cutting out the sales agent (and sales fee). Finney and Triana (2015: 76) note that the competitive distribution environment and the opportunity to exert more control over film projects were reasons for the Australian distributor Transmission to establish a partnership with See-Saw Productions. It is clear that such direct distribution arrangements in the UK and Australia were impacting on the gatekeeping role of the sales agent, in this case FilmNation. On the one hand, FilmNation was not fully in control of the gatekeeping process because the distribution rights in the Australian and the UK home markets were sold before they became attached; on the other hand, these pre-sale deals were supportive to FilmNation because they added weight to the status of the package and

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helped to finance the film. The second stage of the gatekeeping process involved the $6.1  million sales deal between FilmNation and The Weinstein Company, for which FilmNation received a sales commission. The Weinstein Company performed the role of a sales agent because the deal also involved distribution rights for several countries and territories outside the US. They were thus also able to exert some control over the gatekeeping process by selling the film to distributors in those countries and territories. In the third stage of the gatekeeping process, FilmNation sold the distribution rights to distributors in the (many) remaining countries and territories around the world. The film became a very attractive proposition in the marketplace after it was shown publicly for the first time at the Telluride Film Festival and the Toronto International Film Festival, and FilmNation was able to negotiate distribution deals in remaining territories. To conclude, rather than following a linear pattern from producer to sales agent to distributor, these various arrangements between See-Saw, FilmNation and The Weinstein Company have demonstrated that each of them had a role to play in the sales process and operated as gatekeepers in various stages. Beyond the process of gatekeeping, it is worth reflecting on the relationship between producers and sales agents. The co-producers Bedlam Productions and See-Saw Productions organised the casting and shooting process, negotiated deals with creative talent and production partners, and controlled the budget. They also engaged with the creative process and worked closely with the director, Tom Hooper. FilmNation became attached subsequently and performed the gatekeeping function of coordinator. They provided estimates in countries and territories worldwide, and this enabled all involved to reflect on the budget in relation to creative decisions. The co-producers and director Tom Hooper remained largely in control of the creative process, while FilmNation focused on the commercial process involving the international sales and festival release strategy. The creative filmmaking process and the commercial sales process were thus essentially separated from each other. In fact, Unwin (2013) noted that the co-producers were determined to retain control over the creative process of the film, and this was an important reason for them to turn down a studio deal with Fox Searchlight. In terms of tensions between creativity and commerce, this case study demonstrates that it is possible to cope with such tensions from an early stage of production, with the coordinator function of FilmNation being restricted to the commercial process.

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5.4   Ida (2013) The second case study involves the low-budget Polish-Danish art-house film, Ida (Table 5.3). The analysis draws on an interview with Christian Husum, the Managing Director of Danish sales company Portobello Film Sales. It is also informed by interviews with the co-producers Ewa Puszczynska (Head of Development of Opus Film) and Sofie Wanting Hassing (Associate Producer for Phoenix Film). Additional information is drawn from secondary sources such as the trade press, IMDb and Box Office Mojo. The Co-producers Husum (2015) notes that the longstanding relationship between the creative producer Eric Abraham of the Danish production company Phoenix Film and the Polish film director Pawel Pawlikowski was important to the development of the project. They started the scriptwriting process in 2006 and developed various drafts in the years that followed. In 2010, they won the MEDIA European Talent Award for the best screenplay. This prize came with a financial award to develop the script further. Husum (2015) notes that Rebecca Lenkiewicz became attached to co-write the script with Pawlikowski, and their revised script was introduced to funding bodies and business partners. In raising funding for the €1.4 ($1.8) million budget, Phoenix Film received substantial financial support from the Polish Film Institute, with further funding coming from the pan-­European Table 5.3  The creative and business context of Ida Ida Director Writers Leading actors Genre Country of origin and language Budget Co-producers Funding bodies Sales agent Distributor in the Polish market Distributor in the US market

Pawel Pawlikowski (PL) Pawel Pawlikowski (PL), Rebecca Lenkiewicz (PL) Agata Kulesza (PL), Agata Trzebuchowska (PL) Drama A Polish-Danish co-production in the Polish language €1.4 ($1.8) million Opus Film (PL), Phoenix Film (DK) Polish Film Institute, Eurimages, Danish Film Institute Portobello Film Sales (DK) Solopan (PL) Music Box Films

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funding organisation Eurimages, the Danish Film Institute, and the production company Opus Film in Poland, as noted by trade reporter Barraclough (2015). Although Phoenix Film controlled the development process and put together the financing, Puszczynska (2015) noted in an interview that Opus Film became the lead producer and organised the (physical) production process in Poland. The Involvement of Portobello Film Sales Phoenix Film is the production company of Eric Abraham and Christian Husum and has produced a series of small-scale, low-budget films, including Kooky (2010), The Forgiveness of Blood (2011), The Salt of Life (2011) and The Three Brothers (2014). These films were financed primarily with public funding and they were introduced to international distributors through Portobello Film Sales, the in-house sales branch of Phoenix Film. Husum is in charge of sales and distribution operations for Portobello. He noted in an interview that they normally introduce films to distributors at the point when they are completed and screened at festivals, rather than negotiating pre-sale deals (Husum 2015). Given the relationship between Phoenix Film and Portobello, it was clear from the early stage of development of Ida that Portobello would become attached as the sales agent. In terms of distribution, Husum (2015) notes that Portobello negotiated a television deal with a Danish broadcaster in the pre-production stage to be able to qualify for public funding from the Danish Film Institute, but there was no need to negotiate additional distribution deals: We were awarded funding from various funding bodies and that enabled us to secure the financing needed to move into production. The film moved into production without financial support of international distributors. There were also no additional distribution deals negotiated throughout the production and post-production process. (Husum 2015)

Portobello deliberately finished the production process of Ida before they introduced the project to international distributors. Husum (2015) notes that the decision of the director Pawel Pawlikowski to shoot the film in black-and-white and in the Polish language impacted on the commercial appeal of the film and thus on what could be expected from the sales process. He also notes that Pawlikowski’s approach to filmmaking impacted

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on the sales process. Rather than following a written script as guidance, Pawlikowski’s preferred approach involved breaking the shooting into different phases to allow time for editing the footage after each shoot. This enabled him to re-invent and re-write the film’s concept and storyline throughout the shooting process. Puszczynska reinforces this point: “Pawlikowski didn’t use the script but he started almost from scratch and wrote the script with the camera” (Puszczynska 2015). Given that Pawlikowski had previously  adopted this creative approach, Husum (2015) notes that the concept of the film was likely to change considerably, and pitching the script to distributors in the development and production stages would have been misleading. It was only at the point that the film was prepared for a festival release that the distribution rights for the Polish home market were sold to distributor Solopan. While this deal was negotiated directly by the Polish co-producer Opus Film, the deals with international distributors were negotiated by Portobello. Although Ida is a small-scale Polish-language film, shot in black-and-white, and very different in form and style from a high-profile English-language film like The King’s Speech, it premiered at the same festivals. Thus it was introduced at the 2013 Telluride Film Festival and subsequently shown at the Toronto International Film Festival (TIFF), where it won the International Critics Award 2013 and generated awareness amongst journalists and the festival crowd. Even well-known directors such as Alfonso Cuarón and Alexander Payne spoke highly of the film during various presentations and talks at the festival. This strategy for Ida demonstrates how Portobello used the film festival circuit to organise the process of tastemaking, and how the judgements of creative talent, critics and audiences helped to establish an international profile. The role of Portobello was important in enabling access to important festivals, where its value was confirmed and communicated to audiences through other tastemakers, demonstrating how they all contributed to the process of generating cultural legitimacy. Because Ida generated considerable attention on the film festival circuit, Portobello was able to negotiate the first international distribution deals at TIFF.  Husum (2015) notes that they closed deals with several distributors in Europe and Latin America. Another deal with a US distributor followed soon after. He also recalls that they prioritised deals with specific distributors in their networks, particularly those who had previously dealt with films directed by Pawlikowski, or engaged with other black-and-white non-English-language films, such as the critically acclaimed

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German-language film The White Ribbon (2009). Examples of such distributors included Cinéart in the Benelux countries, Memento in France, Caramel Films in Spain, Arsenal in Germany and Camera in Denmark. Portobello continued to sell the film in the following months. Husum (2015) notes that they deliberately participated in the Hong Kong sales market in March 2014 to negotiate deals with distributors in Asian countries, such as Japan, South Korea, China and Taiwan. They prioritised this sales market over the sales markets in Los Angeles in November 2013 and Berlin in February 2014. In terms of the release strategy by distributors in local, national markets, Ida was released in the Polish home market in October 2013, just after the festival release at Telluride and Toronto in September 2013. Distributors in other countries, however, released the film in the spring and the summer of 2014 (Box Office Mojo 2016). The fact that it had been released by distributors in most countries by the end of 2014 was supportive to the process of building up further awareness, with the film becoming a serious contender for the awards season. It was nominated for Best Foreign Language Film at the 2015 Golden Globes and the 2015 Academy Awards (the Oscars). Leviathan (2014), a film about corruption in Russia, won the Golden Globe for Best Foreign Language Film. However, by the time that Portobello prepared Ida for the Oscars, they were able to take advantage of a political discussion around the film in Poland. Journalist Pulver (2015) notes that the film became the subject of political controversy because the Polish nationalist organisation, the Anti-Defamation League, started a petition against the film, arguing that (Christian) Poles were misrepresented in the film. They demanded that intertitles would appear at the beginning of the film to rectify that issue. The petition was hugely successful, with 50,000 signatures collected in the period leading up to the Oscars. Portobello, in turn, framed Ida’s promotional campaign for the Oscars around this political issue, informing the trade press and popular media about the petition to generate free publicity. In addition to building up an aesthetic appreciation of the film through reviews and festival prizes, tastemaking was thus put into effect through the use of news media. The impact of such promotional activity became clear at the Academy Awards ceremony: Ida won the Foreign Language Oscar. According to Husum (2015), the promotional campaign was critical in securing the Foreign Language Oscar. Although the film was no longer on show in cinemas at this point, Husum notes that the

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buzz surrounding the Oscars was still productive in enabling the film to reach international audiences in secondary release markets, such as on DVD and Blu-ray, online and television. The Role of Portobello Film Sales While a medium-budget film such as The King’s Speech is reliant on pre-­ sale deals with distributors at an early stage of production, a low-budget film such as Ida is more reliant on public funding, and this has consequences for the film sales process and the role of the sales agent. Although Portobello was formally part of the film’s package in the pre-production and production stages, their impact on the film sales process only started when they performed the gatekeeping function of representative. They deliberately organised the sales process in line with the film’s release on the festival circuit. The fact that they only opened the gate to international distributors at this stage demonstrates how the sales process was structured. It also demonstrates that they relied on a specific strategy to organise the sales process, which underscores the argument that gatekeeping entails more than simply opening a gate. Two strategic decisions in particular had an impact on their gatekeeping process. First, they were very selective in terms of participating in sales markets: they prioritised TIFF and Hong Kong over the American Film Market (AFM) and Berlin. Second, Husum (2015) notes that they prioritised distribution deals with specific distributors whom they felt were right for the film, such as Memento in France and Cinéart in the Netherlands. The rationale behind this decision is that they can take advantage of such relationships in the long term: for instance, if they approach them again for another film. Husum elaborates on this point, arguing that they accepted offers from distributors they regularly work with over higher offers from other distributors. In terms of the international release strategy developed by Portobello, this case study demonstrates that Ida was heavily reliant on festival prizes to establish an international profile. It benefited from the International Critics Award at TIFF in September 2013 and continued to win prestigious prizes at other festivals and award ceremonies, including the London Film Festival and the European Film Awards. The festival release was accompanied by a formal theatrical cinema release in the Polish home market in October 2013, but the formal theatrical cinema release in other countries and territories followed in the spring and summer of 2014.

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Further, the fact that the film was released in May 2014 in the US market meant that Ida qualified for the 2015 awards season. With more than 15 months between the formal release in the Polish home market and the Academy Awards, it is clear that the release strategy by distributors in local, national markets was never designed in synergy with, or tailored to, the Academy Awards; rather, the fact that Ida won the Best Foreign Language Oscar was a remarkable but unanticipated achievement. The importance of developing an international release strategy becomes clear if we return again to a comparison between Ida and The King’s Speech. The release of The King’s Speech was coordinated carefully by the sales agent and distributors with the purpose of gathering momentum in the awards season. This is a common strategy for positioning high-profile films in anticipation of the Academy Awards. On the other hand, the international release strategy for Ida was developed with little sense that the film carried such potential. Distributors released the film at different times throughout the year, and that is a strategy that is more common and realistic for small-scale non-English-language films. This comparison demonstrates that the representative function of sales agents extends from promotional and tastemaking activities to influencing how and when films are released by international distributors and become available to audiences, underscoring the important role of sales agents as gatekeepers.

5.5   Oh Boy/A Coffee in Berlin (2012) This final case study of the micro-budget German tragicomedy Oh Boy is informed by an interview with Dirk Schürhoff, the Managing Director of German sales company Beta Cinema, as well as the secondary sources used for the previous two case studies (Table 5.4). The Co-producers The initiative for this project came from the writer and first-time director Jan Ole Gerster. He wrote the script for a graduation project and decided to pitch it to the German film business. While developing and packaging the film, Gerster asked his friend Tom Schilling to play the leading role. Although Schilling was a talented film and television actor with experience in Germany, he was relatively unknown amongst mainstream German audiences. Gerster also approached producer Marcos Kantis of the

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Table 5.4  The creative and business context of Oh Boy Oh Boy/A Coffee in Berlin Director Leading actors Genre Country of origin and language Budget Co-producers Sales agent Distributor in the German market Distributor in the US market

Jan Ole Gerster (DE) Tom Schilling (DE), Katharina Schüttler (DE) Drama A German co-production in the German language €0.3 ($0.4) million Schiwago Film (DE), Chromosom FilmProduktion (DE) Beta Cinema (DE) X-Verleih Music Box Films

German production company Schiwago Film, and they started the development process together, as noted by industry observer Wallace (2014). They raised financing for the €300,000 ($387,000) micro-budget film with support from the German public television stations ARTE and Hessischer Rundfunk, and a direct distribution deal with the German distributor X-Verleih (Wallace 2014). Gerster decided to shoot the film in black-and-­white to add a timeless feel to the film, and worked with German actors to make the film in the native language. The shooting took place in the summer of 2010, but Gerster spent a long time on the editing process to prepare the film for a festival release in the summer of 2012 (Wallace 2014). The Involvement of Beta Cinema Oh Boy premiered at the Karlovy Vary International Film Festival in the Czech Republic and at the Munich International Film Festival in Germany in July 2012. Schiwago Film invited the  German sales agent Beta Cinema (based in Munich) to attend the screening at the Munich festival. As mentioned in the previous chapter, Beta is a specialised sales agent with a specific focus on low-budget and medium-budget films, particularly German (co-)productions. They represent a relatively high number of films. At the Berlin sales market in 2015, for instance, they organised screenings of 14 finished films whilst having another six films in development. In terms of their involvement with Oh Boy, they watched the film and responded enthusiastically, as their Director Dirk Schürhoff (2015) recalls:

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We knew the producers [Schiwago Film] very well and they called us saying: “We know that you are usually looking for foreign language films with crossover potential, and we know that this is only a micro-budget film, but have a look at it.” We watched the film at the Munich Film Festival for the first time and we immediately fell in love. This was really something unique and special. However, at the same time we were thinking: how can a €300,000 black-and-white film made by an unknown director travel internationally? We said to the producers that we really loved it, but it was a little early to become attached.

Despite Beta’s personal judgement, they made a strategic decision to wait and see how the film would perform in the German market. The distributor X-Verleih scheduled Oh Boy for a November release in German cinemas, where it opened on 25 screens, but increased to 39 in the second week and 49 in the third (Box Office Mojo 2016). Slowly but surely, it became the sleeper hit that Beta was looking for, as Schürhoff (2015) explains: Oh Boy had fantastic German reviews, everybody was shouting, and there was word-of-mouth buzz. We then came to the American Film Market in Los Angeles in November 2012 where the film was on show [i.e. at the AFI Festival]. We really started to feel that there was something we could rely on. We had German box-office revenue (close to €1 million after 4 release weeks); there was a very good German distributor (X-Verleih); and it had a very good first review at the AFM sales market from a journalist of The Hollywood Reporter [Sheri Linden]. At the end of November when we came back from Los Angeles we said: listen, we will do it. We can create a certain buzz and make it even bigger.

This statement demonstrates that the impressive box-office results in the German market and the positive buzz surrounding the American festival release were key factors for Beta to become involved. Oh Boy continued to be shown in close to 50 cinemas in Germany by the end of 2012. The length of this theatrical run extended further when it won two prizes at the Bavarian Film Awards ceremony in January 2013 (Box Office Mojo 2016). At the same time, it continued to gain attention through the film festival circuit: it won both the Jury Prize and the Audience Award at the Premiers Plans d’Angers Festival in France and was shown at the International Film Festival Rotterdam in the Netherlands. This was important in sustaining a buzz around the film and preparing it for the sales market at the Berlin Film Festival in February 2013.

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Beta formally started the sales process in Berlin, opening the gate to international distributors (Schürhoff 2015). The Berlin sales market was strategically chosen by Beta since Oh Boy depicts various aspects of everyday life in Berlin. They organised various market screenings and established the first key distribution deals with distributors from France, the Benelux countries, Italy, Norway, Russia and Greece (Schürhoff 2015). At the same time, the film was still on show in German cinemas, with the theatrical run expanding to 105 cinemas, and gathering momentum when it won six German Film Awards in April 2013, including the prize for Best German Feature Film of the Year (Schürhoff 2015). These new box-office results and festival prizes supported the process of negotiating further distribution deals, and the distribution rights for the US market were acquired by Music Box Films at the Cannes sales market in May 2013, as noted by industry observer Macnab (2013). Oh Boy went on to generate awareness and won several prizes at several smaller European festivals. However, it was not selected for key festival competitions such as Toronto, Berlin or Cannes, and was not considered for the most prestigious international film prizes and awards in Europe and the US. Beta eventually secured distribution in more than 10 countries (Schürhoff 2015). In keeping with the international release strategy of Ida, they selected specific distributors within their networks, who were given a high degree of autonomy with regards to the release in local, national markets. Some international distributors, such as Filmladen  in Austria, released the film in coordination with the hugely successful theatrical run in Germany (Box Office Mojo 2016). Distributors in  other  countries such as Spain, the Netherlands, Belgium and France released it in the spring of 2013, while distributors in the US, Greece and Mexico released the film after the theatrical run in Germany (Box Office Mojo 2016). The Role of Beta Cinema The rationale behind Beta’s decision to become involved with Oh Boy provides insight into their search and selection function as a gatekeeper. They were in the powerful position where they could follow the release of the film in the German market before they became formally attached. Schürhoff (2015) notes that there were four developments with an impact on their acquisition decision in this period. First, Oh Boy’s success on the festival

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circuit; second, several European distributors were keen to see a screening of the film; third, the film was well received at the AFM sales market; and fourth, the film became a commercial success in German cinemas. These positive developments were important for Beta to assess the film’s potential in the international marketplace. On the other hand, the fact that they could afford to postpone their decision-making demonstrates that the process of securing international distribution is challenging for producers of micro-budget films such as Oh Boy. Such films need to perform well in the home market to secure support from a sales agent as well as international distributors. As a consequence of Beta’s decision to become attached at the point that the film was already released on the festival circuit, they subsequently performed the gatekeeping function of representative. However, they were unable to impact on the creative process in the gatekeeping function of coordinator. Their creative intervention was therefore limited to minor changes that helped to promote the film to international distributors and audiences. For instance, Schürhoff (2015) recalls that they changed the international title of the film to A Coffee in Berlin because they felt it was important to highlight to international distributors that the film was taking place in Berlin. Such creative interventions helped to support the film sales process  in the international marketplace.

5.6   Exerting Power and Control Over the Gatekeeping Process I developed Foster and Ocejo’s typology (2015: 410) in order to analyse how gatekeeping functions are played out under specific circumstances at different stages of a film’s life cycle, and how they relate to each other as part of the gatekeeping process. Employing this typology to the case of sales agents foregrounds their gatekeeping decisions, the motivations that lie beneath the process of opening and closing gates, and their capacity to exert power and control over the distribution of films. The case studies confirm that gatekeeping is a complex process in the sense that it requires more than acquiring and selling films. It is clear that the process of influencing the conditions through which value is created for films is as important as the process of approaching distributors and negotiating deals. These processes are intertwined and occur simultaneously. In particular,

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film festival strategies and theatrical release strategies have an important role to play in the process of value creation and tastemaking. For films with important cultural values, the process of introducing and promoting films through the festival circuit is critical to support the film sales process. Further, all three case studies have shown that the formal release in selected local, national markets helped to generate further attention, with the effect that additional distribution deals were negotiated with distributors in other countries or territories. What this demonstrates is that gatekeeping requires precise timing and well-considered promotional strategies. In terms of power and control, my analysis of sales agents was also attentive to their impact on shaping and structuring gatekeeping practices in the space between production and consumption. Sales agents often acquire films with a specific distribution strategy in mind, and the organisation of the film sales process is reliant on that strategy. Rather than immediately selling films to as many distributors as possible, this process is often organised in different phases to maximise value, as the case study of The King’s Speech demonstrated. The rationale behind such thinking is that distribution rights become more valuable if films are nominated for festival prizes or film awards. Gatekeeping practices between sales agents and distributors may thus deliberately extend from production to distribution and consumption stages. My analysis also demonstrated that the production and distribution context of films impacts on the ability of sales agents to perform specific gatekeeping functions. The example of The King’s Speech demonstrates that a relatively new sales agent in the business, FilmNation, was able to become attached to a high-profile film on offer in the marketplace. Their ability to perform the role of coordinator, however, was undermined because the co-producers retained full creative control over the filmmaking process. Their coordinator function was also undermined because they negotiated a multi-territory deal with The Weinstein Company, who became a powerful distributor. This deal, however, was orchestrated by FilmNation: they retained control over distribution deals negotiated in various stages of production and decided to what extent they were prepared to give away control over the gatekeeping process to distributors such as The Weinstein Company. Overall, this chapter about sales agents has provided an in-depth understanding of their labour, work practices and powerful role in the distribution business. At the same time, they are reliant on their relationships with distributors in local, national markets. The next chapter will look in more

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detail at the nature of such relationships between sales agents and distributors, whereby the focus shifts from gatekeepers to gatekeeping networks.

References Barraclough, L. (2015). Polish Film Institute Chief Celebrates as ‘Ida’ Becomes First Polish Movie to Win Foreign-Language Film Oscar. Variety. [Online]. 23 February 2015. Available at: http://variety.com/2015/film/awards/polishfilm-institute-chief-celebrates-as-ida-becomes-first-polish-movie-to-win-foreign-language-film-oscar-1201439540/ [Accessed 6 April 2016]. BFI (British Film Institute). (2017). About UK Creative Industry Tax Reliefs. [Online]. Available at: http://www.bfi.org.uk/film-industry/british-certification-tax-relief/about-tax-relief [Accessed 8 January 2018]. Box Office Mojo. (2016). A Global Box-office Film Database. [Online]. Available at: http://www.boxofficemojo.com/. Finney, A. and Triana, E. (2015). The International Film Business: A Market Guide Beyond Hollywood. 2nd edn. London: Routledge, pp. 73–74. Foster, P. and Ocejo, R. (2015). Brokerage, Mediation, and Social Networks in the Creative Industries. In: C. Jones, M. Lorenzen and J. Sapsed (Eds.), The Oxford Handbook of Creative Industries. Oxford: Oxford University Press, pp. 405–420. Gould, R. and Fernandez, R. (1989). Structures of Mediation: A Formal Approach to Brokerage in Transaction Networks. Sociological Methodology, 19, 89–126. Havens, T. (2011). Inventing Universal Television: Restricted Access, Promotional Extravagance, and the Distribution of Value at Global Television Markets. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 145–168. Husum, C. (2015). Private Interview with the Managing Director of the Danish Specialist Sales Agent Portobello Films via Skype, 5 December 2015. Kay, J. (2009). Weinsteins Take North America and Select Territories on The King’s Speech. Screen International. [Online]. 2 September 2009. Available at: https:// www.screendaily.com/news/weinsteins-take-north-america-and-select-territories-on-the-kings-speech/5005201.article [Accessed 5 March 2015]. Macnab, G. (2013). Music Box Takes Oh Boy for US. Screen International. [Online]. 22 May 2013. Available at: https://www.screendaily.com/festivals/ cannes/music-box-takes-oh-boy-for-us/5056637.article [Accessed 5 October 2015]. McClintock, P. and Lodderhose, D. (2010). ‘Speech’ Exemplifies Agile Indies. Variety. [Online]. 6 November 2010. Available at: http://variety.com/2010/ film/news/speech-exemplifies-agile-indies-1118027035/ [Accessed 13 March 2016].

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Mezias, S., Pedersen, J., Kim, J., Svejenova, S. and Mazza, C. (2011). Transforming Film Product Identities: The Status Effects of European Premier Film Festivals, 1996–2005. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 169–196. Moeran, B. and Pedersen, J. (2011). Introduction. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 1–35. Pulver, A. (2015). Polish Nationalists Launch Petition Against Oscar-nominated film Ida. The Guardian. [Online]. 22 January 2015. Available at: https:// www.theguardian.com/film/2015/jan/22/ida-oscars-2015-film-polishnationalists-petition [Accessed 21 December 2016]. Puszczynska, E. (2015). Public Interview with the Head of Development of the Polish Production Company Opus Films as Part of the MeCETES Conference at the Danish Film Institute in Copenhagen, 9 September 2015. Schürhoff, D. (2015). Private Interview with the Manager Director of the Specialist Sales Agent Beta Cinema via Skype, 23 September 2015. Unwin, G. (2013). Public Interview with the Managing Director of the Specialist Production Company Bedlam Production at the Humanities Research Institute in Leeds, 13 November 2013. Wallace, W. (2014). Jan Ole Gerster—Director. Cineuropa. [Online]. 19 June 2014. Available at: http://www.cineuropa.org/it.aspx?t=interview&l=en& did=259179 [Accessed 5 October 2015].

CHAPTER 6

The Gatekeeper Role of Distributors in the Dutch Market

6.1   Film Distributors in Local, National Markets I supplement the limited scholarly knowledge about gatekeepers and gatekeeping arrangements in the film industry with a case study of film distributors in this chapter. As noted in previous chapters, distributors work with sales agents or sometimes directly with producers to acquire distribution rights of films for local, national markets. They subsequently develop release strategies to introduce and promote films to cinema exhibitors, DVD/Blu-ray retailers, VOD platforms, television broadcasters and other organisations to reach audiences in local, national markets. Distributors are important gatekeepers because they make a selection from several thousands of films on offer in the global marketplace every year. As I demonstrated in Chap. 1, more than 6000 feature films were produced in 2016 (Focus 2017). Distributors select only a fraction of all those films for local, national markets. Statistics provided by the German research organisation German Films Service demonstrate that distributors in large European markets such as the UK, France and Germany released between 550 and 850 films in 2016, while distributors in smaller European film markets such as the Netherlands and Belgium released between 350 and 450 films in 2016 (German Films Service 2017). Crucially, the majority of films released in those markets were international productions, rather than domestic productions, demonstrating the important role of distributors in working together with sales agents to enable access for such films. © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_6

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My focus in this chapter is on the acquisition process of those international films by distributors. Given the enormous number of films on offer in the marketplace, I analyse how they regulate cultural flows from international markets to national markets: how they filter out films, classify and evaluate projects in relation to others, and acquire selected films. Although my analysis in this chapter is also attentive to the role of Hollywood distributors in the film distribution business, I am particularly interested in relationships developed between sales agents and independent distributors. Together, sales agents and distributors fulfil quite specific roles as part of what can be referred to as gatekeeping networks. Thomas Franssen and Giselinde Kuipers (2013) have introduced this concept in their analysis of acquisition processes in the publishing industry.  They note  that decisions about the distribution of cultural works are decentralised amongst different types of gatekeepers mediating at global, transnational and national levels in the marketplace. Such gatekeeping networks exercise control over the flow of cultural works to national markets. It is this concept that I develop further in this chapter by analysing relationships between sales agents and distributors. In order to analyse such relationships in depth, I limit my focus specifically to the acquisition process of distributors in the Dutch film market. Because the Dutch market belongs to the Benelux territory, distribution rights are normally acquired for the Benelux, and then subsequently divided amongst distributors in the Netherlands on the one hand, and Belgium and Luxembourg on the other. Some distributors are active in both markets, but most of them focus only on the Dutch market or the Belgium and Luxembourg market. The focus is firmly on films acquired by distributors in the Dutch market for a theatrical release in cinemas to provide insight into their relationships with sales agents. In exercising control and power over acquisition decisions, distributors in the Dutch market collectively determine which films are shown in Dutch cinemas. According to a report by the Dutch Film Fund, the number of theatrical cinema releases in the Dutch market varied from 353 films in 2013 to 362  in 2014, 371  in 2015 and 407  in 2016 (Filmfonds 2017). Only 58 films (14%) of cinema releases in 2016 were Dutch films, demonstrating a strong reliance on international films in the Dutch market (Filmfonds 2017). International films are acquired in a different way than Dutch

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films. Distributors become attached to international films through formal distribution arrangements with sales agents at international sales markets, while Dutch films are often acquired through informal networks with producers in the Dutch market. This aim of this chapter is to analyse different types of distributors in the Dutch market, the films they are dealing with and the process of acquiring those films in the global marketplace. Consistent with the analysis of sales agents in Chap. 4, I will develop a typology to establish upfront how distributors are positioned within the Dutch market. In particular, I analyse the types of films they have released in cinemas and their commercial performance. I will subsequently analyse the labour and work practices of different types of distributors in the Dutch market to explore how they acquire films. Expanding on the analysis of sales agents, I will demonstrate what sort of gatekeeping and networking arrangements have developed between different types of sales agents and distributors.

6.2   Distributors in the Dutch Market I examined the community of distributors in the Dutch market in another study (Smits 2016). Drawing on quantitative data about the Dutch market in 2010 and 2011, I employed Multiple Correspondence Analysis to identify three groups of distributors in particular: Hollywood majors, major independents and specialised independents. I briefly discuss the results of that analysis to provide insight into the Dutch market. Hollywood majors in the Dutch market usually deal with films released as part of globally integrated distribution networks of Hollywood studios. Every Hollywood studios has established their own distribution offices or established partnerships such as output deals with independent companies to secure distribution for their films in international markets. The analysis confirmed that films released by Hollywood majors correspond most strongly to characteristics of Hollywood mainstream cinema: they tend to be US-led productions, shot in the English language, and often winning international awards. Most of those films were given a wide release in more than 50 cinemas in the Netherlands. Major independents, in addition, are positioned between Hollywood majors and more specialised independent distributors. They deal primarily with so-called mid-range or crossover films, which are modest productions

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in relation to most of the Hollywood mainstream films, but big-budget productions compared to most of the films that circulate through the independent business or that are made primarily for small, national markets. Some of those films are released modestly in cinemas and may open out more widely if they perform well; other films are likely to attract more audiences and open on more screens. In other words, the films released by major independents may be positioned modestly in the specialised market or widely in the mainstream market. Specialised independents, on the other hand, deal primarily with low-­ budget, specialised films. Such films are aesthetically distinct from the mainstream, with a specific emphasis on unusual stories told in innovative ways. They tend to be non-English-language films and rely heavily on the international festival circuit to build up a profile. As Andrew Higson (2003: 90) notes, small-scale, specialised films are designed to circulate in the art-house market and appeal to niche audiences. Most of those films are given a small release in less than 20 cinemas in the Netherlands, and therefore attract relatively low admissions. Because this analysis of the Dutch market was based on data about distributors in 2009 and 2010, I have consulted more recent reports to explore if the typology continues to make sense today. For instance, a facts and figures report by the Dutch Film Fund on the state of affairs in 2016 demonstrates that new distributors have appeared in the Dutch market and some existing distributors have disappeared (Filmfonds 2017). According to the report, the Dutch market comprised 24 distributors in 2016, with each of them releasing at least several films in cinemas every year. There is another group of distributors that release films in the Dutch market occasionally, but they are not identified by name in the report and they account for only 1% of box-office revenues in 2016. The facts and figures report provides insight into ticket sales and box-­office revenues for all 24 distributors. On the basis of such criteria, it is indeed the case that three groups of distributors can be identified in the Dutch market, and they correspond with the same typology of distributors as in 2009 and 2010. Table  6.1 demonstrates that Hollywood majors (Universal Pictures, Warner Bros and Walt Disney) accounted for a market share of 68% in the Dutch market, underscoring the popularity of Hollywood mainstream films. In fact, the ten best performing films  in the Dutch cinema market were all distributed by Hollywood majors. This involved films such as Bridget Jones’s Baby (Universal Pictures), Finding Dory (Walt Disney), The Secret Life of Pets

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Table 6.1  Market share of Hollywood major distributors in the Dutch market in 2016 Hollywood majors

Market share of 68%

1. Universal Pictures 2. Warner Bros

25% 26%

3. Walt Disney

17%

Best performing film in Dutch cinemas in 2016 Bridget Jones’s Baby (US) Fantastic Beasts and Where to Find Them (UK/US) Finding Dory (US)

Adapted from the Dutch Film Fund report (Filmfonds 2017). Based on box-office revenues generated from film releases in 2016. Universal Pictures also distributed films for Paramount Pictures and Sony Pictures; Warner Bros also distributed films for 20th Century Fox

(Universal Pictures), The Jungle Book (Walt Disney) and Fantastic Beasts and Where to Find Them (Warner Bros) in 2016, and none of them were Dutch films. In smaller territories consisting of several countries, such as Benelux, Hollywood majors have established non-competitive partnerships with each other to lower their overheads. While Universal Pictures distributes its own studio films in the Dutch market through their local distribution office, it also distributes films for Paramount Pictures and Sony Pictures. Similarly, Warner Bros distributes its own studio films in the Dutch market through their local distribution office, while also distributing films for 20th Century Fox. Universal Pictures and Warner Bros are thus responsible for the release of a greater number of Hollywood studio films through such partnerships. While the Hollywood studios together account for 68% of cinema revenues in the Dutch market, it is important to acknowledge that Disney is the only Hollywood major that operates without such partnerships in place, which explains that their market share is lower (Table 6.1). A further six distributors constitute a group of major independents, who account for a market share of 27.1% in the Dutch market (Table 6.2). One of these major independents is the powerful Canadian sales-­ financing-­ production company Entertainment One (eOne). They have established distribution offices in the US and Canada, as well as in several European markets, including the UK, Spain and the Benelux countries. On their website, they note that they have a cross-shareholding interest in the high-­profile US sales company Sierra/Affinity and the specialised Canadian sales company Seville International (eOne 2018). They also note that they have established first-look and output partnerships with US production companies such as Sierra Pictures, Amblin Partners and Makeready. Like the Hollywood

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Table 6.2  Market share of major independent distributors in the Dutch market in 2016 Major independents 1. Entertainment One 2. Dutch Filmworks 3. Independent Films 4. September Film 5. Cinéart 6. Paradiso

Market share of 27.1% 9.5% 7.7% 4.6% 2.6% 1.4% 1.3%

Best performing film in Dutch cinemas in 2016 (international titles) The BFG (US) Soof 2 (Netherlands) Now You Can See Me 2 (US) In My Father’s Garden (Netherlands) Captain Fantastic (US) Florence Foster Jenkins (UK)

Adapted from the Dutch Film Fund report (Filmfonds 2017). Based on box-office revenues generated from film releases in 2016

studios, such arrangements allow them to exert more ­control over the distribution of films in international markets. The other major independents in the Dutch market distribute films in the Benelux countries only. Some of them have distribution offices in the Netherlands and Belgium, such as Cinéart, September Film and Paradiso. Others, such as Dutch Filmworks and Independent Films, work with distributors in Belgium to acquire films for the Benelux countries. Major independents work with mainstream films as well as more specialised films with the potential to reach mainstream audiences. In 2016, Entertainment One released the $140 (£113) million blockbuster The BFG, Independent Films released the $90 million mainstream comedy Now You See Me 2, Paradiso released the $29  million mainstream biopic Florence Foster Jenkins and Cinéart released the $5 million specialised film Captain Fantastic. This focus on a variety of films by major independents tallies with their positioning between Hollywood majors and specialised independents. While Hollywood majors very occasionally acquire Dutch films, the film collections of major independents and specialised independents are made up of more Dutch films. Most of them acquire between two and five Dutch films every year. Major independents invest particularly in mainstream Dutch comedies and family films. The facts and figures report demonstrates that the 15 best performing Dutch films were all distributed by major independents (Filmfonds 2017). For instance, Dutch Filmworks distributed the mainstream comedy Soof 2, which became a box-office ­success and reached number 12 in the 2016 box-office chart. Other mainstream comedies and family films amongst the best performing Dutch

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films in 2016 involved Skirt Day, Woozle and Pip in Search of the Scallywagger! and Bon Bini Holland. A third group of 15 specialised independents account for a market share of only 4.7% in the Dutch market (Table 6.3). In terms of their acquisition process, there are similarities with major independents since they distribute films in the Benelux countries only. Some of them have distribution offices in the Netherlands and Belgium, such as Cinemien, The Searchers and Lumiere while others work with partners in Belgium to acquire films for the Benelux countries. They deal with small-scale, specialised films which usually build up a profile in the international festival circuit, but they are often reliant on public funding from the Dutch Film Fund and Creative Europe to acquire the distribution rights of those films. The ­purpose of these national and European funding bodies is to enhance greater cultural diversity through distribution support schemes  (Creative Europe 2015; Filmfonds 2017). Table  6.3, for instance, demonstrates that the best performing films handled by each of Table 6.3  Market share of specialised independent distributors in the Dutch market in 2016 Specialised independents

Market share of 4.7%

Best performing film in Dutch cinemas in 2016 (international titles)

1. Cinemien 2. Just Film 3. Lumiere 4. The Searchers 5. Splendid Film 6. Imagine Filmdistributie 7. Cinema Delicatessen 8. Arti Film 9. Amstelfilm 10. Periscoop Film 11. Eye Film Instituut

0.9% 0.8% 0.6% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.1% 0.1%

12. Cherry Pickers 13. Remain in Light 14. Mooov Film 15. Twin Film

0.1% 0.0% 0.0% 0.0%

Carol (UK/US) Waisted (Netherlands) The Red Turtle (France/Belgium/Japan) Hell or High Water (US) Hacksaw Ridge (Australia/US) Like Crazy (Italy/France) Miss Kiet’s Children (Netherlands) Perfect Strangers (Italy) Jheronimus Bosch (Netherlands) Janis: Little Girl Blue (US) Once Upon a Time in the West (re-release) (Italy/US) The Daughter (Australia) Louder than Bombs (Norway) As I Open My Eyes (Tunisia/France) Operation Arctic (Norway)

Adapted from the Dutch Film Fund report (Filmfonds 2017). Based on box-office revenues generated from film releases in 2016. The specialised independent Twin Film, at the bottom of the table, generated €108,000, which is the equivalent of 0.001% of film revenues in the Dutch market

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the specialised independents were productions from a diverse range of countries around the world, extending beyond the US, the UK and the Netherlands. Thus, Lumiere released the French/Belgium/Japanese coproduction The Red Turtle; Imagine released Italian/French co-production Like Crazy; Arti released the Italian comedy Perfect Strangers; Cherry Pickers released the Australian drama The Daughter; Remain in Light released the Norwegian drama Louder than Bombs; Mooov released the Tunisian/French drama As I Open My Eyes; and Twin released the Norwegian adventure film Operation Arctic. Such films, as well as films distributed by them from other countries, circulated in the market for specialised audiences and typically received a modest release in a limited number of cinemas in the Netherlands, resulting in modest boxoffice revenues. I subsequently compared this typology of distributors in the Dutch market with a larger European market, such as the UK. The BFI Statistical Yearbook report was consulted to analyse which groups of distributors can be identified on the basis of their market share. I identified a similar typology as in the Dutch market. There is a group of four Hollywood majors that accounted for a market share of 68.5% in 2016 (BFI 2017). These include Warner Bros, Walt Disney, Universal Pictures and 20th Century Fox. There is a second group of six major independents, which accounted for a market share of 27.4% (BFI 2017). Entertainment Films is the only UK company that is part of this group, while foreign companies include Entertainment One (Canada), Lionsgate (US), StudioCanal (France). In addition, it is worth noting that Hollywood distributors such as Sony Pictures (US) and Paramount (US) fall into the category of major independents rather than in the category of Hollywood majors in the UK market. The third group of specialised independents accounts for a market share of 4.1%. This group involves distributors such as Curzon Artificial Eye, Thunderbird Releasing, Arrow Films, Altitude Films, Mubi and Dogwoof, amongst others. This typology of Hollywood majors, major independents and specialised distributors in the Netherlands and the UK has shed more light on power dynamics in the distribution business. In particular, it is important to acknowledge the role of major independents in the distribution business. As noted, they acquire big-budget, mainstream films as well as more specialised films. How, then, do they acquire films? And

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how does that process compare with Hollywood majors and specialised independents?

6.3   Hollywood Majors Having developed a typology of distributors,  I will now explore how Hollywood majors, major independents and specialised distributors acquire films in the global marketplace and the gatekeeping arrangements they have developed. In doing so, I will start with a discussion of Hollywood majors to demonstrate that their distribution business is reliant on in-house studio productions as well as on films acquired in the global marketplace. The wealth of writing about Hollywood cinema has brought with it a number of insights into Hollywood’s global operations (Neale and Smith 1998; Maltby 2003; Wasko 2003; Miller et al. 2005). Chief among these is their control over the distribution business achieved by establishing their own distribution offices in key film markets and by collaborating with other studios or subsidiaries in smaller or less-established film markets, as I described above. It is worth noting, however, that there are also markets in which they have developed output deals with independent distributors to secure distribution for their films. For instance, while aforementioned films such Bridget Jones’s Baby, Finding Dory, The Secret Life of Pets, The Jungle Book and Fantastic Beasts and Where to Find Them were distributed by Hollywood majors in the Dutch market, they were distributed by the non-Hollywood distributor NOS Audiovisuais in the Portuguese market (IMDb 2016). Hollywood studios have established such deals with other distributors in countries where they do not operate themselves. The distribution activities of Hollywood studios rely heavily on their own in-house productions. They are particularly  known for their  role in  the production and distribution of blockbusters, tentpole and franchise films. Examples of blockbusters released in 2016 include The Revenant (20th Century Fox) and Inferno (Sony Pictures), while their  franchise productions include the Bridget Jones series (Universal Pictures), the Fantastic Beasts series (Warner Bros), the Deadpool series (20th Century Fox) and the Star Wars series (Walt Disney). Such blockbusters and franchise films are produced by the studios themselves

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and their subsidiaries, or by companies they own partly as a stakeholder, or by companies they have developed partnerships with. In terms of the Bridget Jones franchise, for instance, Universal Pictures was involved as a co-producer through their subsidiary company Working Title in the UK. However, in addition to such in-house productions, they also acquire films in the global marketplace to enrich their film collections. They attend international film festivals and sales markets to develop a sense of films on offer and they work with sales agents to acquire distribution rights. For such films, they are competing against independent distributors. Examples of Hollywood studio acquisitions in 2016 include American Honey (Universal Pictures), The Birth of a Nation (20th Century Fox), A United Kingdom (20th Century Fox) and Raw (Universal Pictures). What these various studio acquisitions have in common is that they were introduced and promoted through the festival circuit: American Honey and Raw premiered at the 2016 Cannes Film Festival, The Birth of a Nation at the Sundance festival, and A United Kingdom at the Toronto International Film Festival. Because these films were critically acclaimed at those festivals, the Hollywood studios negotiated multi-territory deals with sales agents. Universal Pictures negotiated a deal with the sales agent Protagonist Pictures to acquire the distribution rights of American Honey for the UK, Spain, Germany, Italy, Australia and Sweden. The specialised division of 20th Century Fox, Fox Searchlight, acquired worldwide rights of Birth of a Nation. While the film was made on a modest budget of $8.5  million, trade reporters note that Fox Searchlight paid $17.5 million for the distribution rights, becoming the biggest deal ever made at Sundance (Lang and Setoodeh 2016). As noted above, their distribution arrangements in the Dutch market are organised through the distribution offices of Warner Bros, Universal Pictures and Walt Disney, who collectively account for the lion’s share of film revenues. I conducted interviews with the Managing Director of the Warner Bros office and the Managing Director of the Universal Pictures office in the Netherlands to enhance my understanding of their release strategies as well as their influence over  film acquisitions. They noted that their offices in the Dutch market are coordinated by a European head office in London. Decisions about distribution strategies and marketing budgets for films are therefore usually made in consultation with their line managers at the London office. Because the primary function

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of the distribution offices in the Dutch market is to release films that are part of global Hollywood distribution networks, both Managing Directors noted that their role in the film acquisitions process is modest.  They engage very  occasionally with domestically produced Dutch films as a co-producer and distributor. If they want to commit to such domestic productions, they require permission from their superiors in London, who will assess the commercial and cultural potential of such films. While they noted that producing and distributing domestic films is an ambitious and exciting process, it also asks for a strong commitment from their offices in terms of workload, and it is not always possible to make such commitments in combination with other film releases. The acquisition and distribution processes of Hollywood majors in the Dutch market is thus restricted by the relationship with their supervisors in London, and this puts limits on their ability to impact on the process of gatekeeping.

6.4   Independent Distributors Independent distributors in the Dutch market, on the other hand, can usually  make acquisition decisions by themselves because they do not belong to globally integrated distribution networks. Only the major independent distributor Entertainment One is part of a distribution network comprising several markets, but most of their films are still acquired by themselves. Independent distributors therefore actively engage in the task of filtering out which film projects they see as of low interest, classifying and evaluating projects in relation to others, and acquiring selected films. As demonstrated in Chaps. 2 and 3, thousands of film projects enter the sales markets every year with the objective of achieving sales. They are introduced to distributors at different stages of production, with some films being able to secure distribution deals before the production process has formally started. The next sections of this chapter analyse the search and selection processes of independent distributors to analyse how international films are acquired for the Dutch market. Based on interviews with 12 independent distributors, I will demonstrate that there are differences in the way that major and specialised independents acquire films for the Dutch market. These differences should be understood in relational terms.

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In terms of the analysis, it is worth noting that an important strand of gatekeeper studies has identified matters such as overabundance, competition, taste and ambiguity about the nature and quality of cultural products as the prevailing obstacles to effective decision-making (Foster et al. 2011; Franssen and Kuipers 2013; Friedman 2014). Such studies sit within the production of culture perspective (Peterson and Anand 2004), and often draw on aspects of theories about taste (Bourdieu 1984) and uncertainty (DiMaggio and Powell 1983). Their insights about the decision-making process of gatekeepers will be used to develop my analysis of the film acquisition process by independent distributors. In addition, I will focus on networking relations as another important influence on acquisition decisions, involving social dependencies and pressures between gatekeepers mediating at different levels in the marketplace. How exactly do distributors make use of gatekeeping and networking arrangements with sales agents? What sort of arrangements do they maintain with each other? And how do such arrangements impact on decision-making?

6.5   Major Independents The major independent distributors confirmed in interviews that they invest primarily in films with potential to reach mainstream audiences in the Dutch market. This includes medium-budget films or mid-range films. They also confirmed that the comparative status of such films within the sales markets is not to be compared with the vast majority of smaller, low-­ budget films on offer, arguing that mid-range films are often considered as high-profile projects in the sales markets. Competition, Uncertainty and Taste Judgements Major independents usually become involved with films at the pre-­ production stage or during the production stage when filming has formally started. The status of a film’s development at this point is uncertain because the full version has yet to be developed. However, due to the attractive package of mid-range films and the fact that there are comparatively few of such packages on offer in the sales markets, the competition amongst major independents in the Dutch market for the distribution rights of such films is fierce. As one major independent noted:

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There are not so many films in development that really stand out and we need to acquire rights at a very early stage because the Dutch market is very competitive. I look for the same films as five other distributors. It is so crazy that you have to buy things at script stage, otherwise you do not have a business, you cannot survive.

Given such competitive circumstances, major independents feel inclined to acquire films at this early stage of a film’s development. In order to make decisions about films at this early stage, they noted that the elements of a film’s package work in synergy with a strong reliance on factors such as status, reputation and trust. First, major independents argued that the status of (co-)production partners is important to the value of projects. Do the leading producers have the required knowledge and experience, and are they capable of managing a mid-budget production from script to completion? What sort of films do they typically engage with? Second, they argued that the reputation of well-known film stars and other high-­ profile creative talent is vital to the promotion of films and the process of attracting a broader audience. Third, they noted that business relations do not emerge in a vacuum; they are reliant on partnerships with gatekeepers such as sales agents and scouts to compare film projects against each other and to make well-informed decisions about which distribution rights to acquire. Such partnerships are built on trust and routine, as argued by one of the major independents: You do yourself a disservice if you create enemies in this business. This is a networking business. The agent you upset in one negotiation is the person who could offer you the next big movie in a subsequent negotiation.

As demonstrated by this distributor, such trustworthy networking relationships are central to the business because they are usually maintained in the long term. Networking relationships also provide a means to gather more information about films from sales agents, which is important to make decisions at this early stage of a film’s development. In terms of the decision-making process of major independents, an emphasis on factors such as status, reputation and trust tends to overshadow the impact of taste judgements of distributors in relation to decision-­making. On the other hand, predicting the quality and marketability of films on the basis of taste judgement at this early stage of

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production is difficult, if not impossible. That is not to suggest that taste judgements are to be ignored at this point, but rather to indicate that taste judgements remain useful to assess if films in development are an appropriate fit for the distribution catalogue of major independents instead of making an assessment based on a film screening. For instance, major independents noted that factors such as film genre and subject matter are important in order to building a coherent distribution catalogue. Crucially, their inability to watch the film screening at this stage is balanced by a strong reliance on networking relations. That is to say, while their relationships with sales agents are helpful to identify and classify film projects, the impact of those relationships extends further. To borrow a phrase from Havens (2011), they are best understood as personalised relationships, close and long-standing relationships which may impact on the decision-­making process. For instance, one major independent noted: I maintain long-term relationships with many sales agents. They are not just colleagues; they are friends. They know my taste. I know what type of films they represent and the producers they work with.

This statement tallies with the sales strategy described by Husum (2015) in relation to Ida (see Chap. 5). In terms of securing distribution deals for Ida, he privileged distribution deals with like-minded distributors in international countries over other distributors, even if were prepared to pay higher fees for distribution rights. In this way, reliance on personalised relationships becomes an alternative to taste judgements, adding weight to the decision-making process of major independents. Networking Relations with Sales Agents and Scouts Their reliance on sales agents in their networked decision-making process is also useful to filter out films against each other. As the previous chapter demonstrated, sales agents are usually the first to commit to high-profile projects, which they subsequently introduce and promote to distributors with the objective of attaining international sales. In so doing, sales agents filter out a large number of film productions, as demonstrated by one major independent distributor:

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There are a great number of scripts introduced to the business every year, but many of them remain ideas. Only a relatively small selection of projects secure approval for moving into production, which is often dependent on the financing. The sales agents will consequently make a selection out of those projects and sell the distribution rights to us.

While this first selection through sales agents helps to filter out a large number of films, distributors create another filter by maintaining relationships with a select group of bigger sales agents that take similar positions to themselves—that is, they operate in networks with identifiable organisations. This finding tallies with the argument of Foster et al. (2011) and Havens (2011) that gatekeepers are part of specific business networks. Sales agents and distributors with a mutual interest in the same sort of high-profile films have often developed strong relationships, as one major independent argued: “I attend the sales markets in Berlin, Cannes and Los Angeles every year, where I organise meetings with about 10 to 20 sales companies, who collectively represent about 100 films.” While another major independent said: “I tend to meet with the same group of sales agents at the sales markets.” Relationships with sales agents are thus important to organise their gatekeeping process. Such long-term relations bring along privileges that influence their decision-making. The importance of such privileges should be understood in the context of the hectic state of sales markets where distributors are competing for the most attractive projects on offer. In order to acquire film rights, some major independents will go out of their way to meet with sales agents before the sales markets formally start. Some distributors travel around before the start of festival markets because the competition amongst Dutch distributors is incredibly fierce. There are distributors flying to America before the Berlin Festival to meet with sales agents. They make efforts to acquire film rights beforehand, and this often means that those rights are not available anymore to us at the market in Berlin.

While such pre-arrangements do occasionally take place, competition remains fierce within the film sales markets themselves. As described in Chap. 3, new film projects are introduced and promoted

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to distributors, in direct competition with other films, and word-ofmouth reputations begin to develop. The hectic state of sales markets impacts on the acquisition process of major independents, in the sense that they need to anticipate changes, as demonstrated by another major independent: In essence, everything changes at the sales market. There is the priority list, there are options, and there are alternatives. Although you buy only few titles, your shortlist includes many more titles. You are constantly considering: OK, I want this and this, but I cannot get this and this. While you realise later that your selected film has been sold and the second option is too expensive, so you need to look for alternatives. I walk around at these markets with about 30 to 40 films in mind.

Given such changing market circumstances, personal relationships with sales agents are important in securing the distribution rights of films on the priority list. For instance, distributors who have been involved with previous films of a particular director are usually first approached to become attached to the next film, demonstrating the importance of processes of reciprocity and relationship-building. But personal relationships also matter when making decisions about films that attract much industry attention during the market, and for which competition is fierce. Relying on close and long-standing relationships is equally important to the process of information sharing. Major independents use their networking arrangements with sales agents to acquire a better sense of film projects. Decision-making is particularly challenging in relation to films at an early stage of development when producers are putting the film’s package together. Major independents rely on information sharing with sales agents to obtain in-depth and advanced information about the state of projects. For instance, they obtain more details about the involvement of creative talent such as the leading actors, the director(s) and producers. Further, they obtain information about the financing of the film and the likelihood that the film will receive the green light to move into production, for which the commitment of distributors in a range of markets is usually required. The privileges established through socially constructed relationships with sales agents are thus important for gaining a competitive advantage

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and helping to make well-informed decisions. While major independents also rely on logics like reputations and status as well as taste judgements at this early stage of production, their networking arrangements with sales agents are helpful to cope with changing circumstances within sales markets, as one major independent explained: Your network relations are critical. The hectic environment of the sales market affects your decision-making. Sales agents introduce films at strategic moments, often just before the start of sales markets, so that you need to make decisions as soon as the market starts, in the heat of the moment. Emotion, therefore, becomes an important part of the process.

In addition, major independents noted that it is important to gather as much information as possible before the start of sales markets. Some of them make use of the expertise of acquisition scouts or consultants to follow the development of new projects on offer in the global marketplace. The expertise of such intermediaries is particularly important in an early stage of production, when they collect information about projects, assess the state of film packages and report their findings to distributors. They act primarily as consultants to distributors rather than becoming attached to film projects directly as co-financiers. In terms of their scouting reports, they usually involve a summary of the script (usually three or four pages) and details about the (co-)producers and creative talent committed to the project. Such information is important to assess the commercial potential of films, as one major independent demonstrated: Look, the script is completely analysed. What I get is a synopsis of about four pages and information about the cast, the producers and other business people involved. She also gives her own opinion, involving some general comments about the business context and its commercial potential, as well as her expectations.

Their relationships with scouts are thus helpful to effectively filter out film projects against each other, while also acquiring more specific details about a film’s development, which in turn impacts on decision-making at this early stage of production. In fact, because scouts have developed close relationships with producers, major independents argued that they are sometimes able to acquire confidential and privileged information about

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the state of film projects. The role of the scouts extends thus further than just filtering out projects, taking the form of yet another social influence that helps to develop professional assessments of films. In other words, networking relations bring along privileges and add weight to the decision-­ making process: the analysis of major independents demonstrates that their decision-making is largely based on such networking influences.

6.6   Specialised Independents The other main group of Dutch distributors engaged with the acquisition of films at sales markets involves specialised independents. They look primarily for smaller, art-house or specialised films which, unlike the higher profile medium-budget films, are usually acquired after production is completed. Specialised independents therefore often search for films that have not yet been acquired by one of the major independents at an earlier stage, focusing on a more limited selection of films. On the other hand, there are still always a great many small-scale, art-house films on offer in the global marketplace, and they are able to see the finished version of those films. A film such as Ida (2013), as described in Chap. 5, is characteristic for the sort of films they are looking for. It was made without the involvement of high-profile film actors on a relatively small budget of close to €1.4 ($1.8) million. Deals with specialised distributors were negotiated after the finished version of the film was introduced at film festivals and sales markets. Taste Judgements and Networking Arrangements The fact that specialised independents usually acquire films in a finished stage has an important impact on their search and selection process. They argued that they typically engage in more extensive and diverse networks than major independents, and maintain relationships with bigger and smaller sales agents, including those that have not yet established a reputable or trustworthy name in the industry. In some cases, this means that they work with sales agents for the first time. Most of their relationships with sales agents are kept at arm’s length, while they maintain closer relationships with a few sales companies. In this respect, the analysis of major and specialised independents shows broad similarities with the study by Foster et al. (2011), who identified differences between various types of talent buyers in the music industry,

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demonstrating that the business context in which they operate shapes the nature of networking arrangements between them. For instance, those looking for original bands maintain relations at arm’s length with many different bands, while those looking for bands playing familiar music maintain close relationships with a small number of bands. Such different networking relationships are also noticeable in the film industry, with major and specialised independents engaging with films in different ways, as summarised in Table 6.4. Relationships at arm’s length with sales agents have an impact on the decision-making process. Specialised independents enjoy the privilege of watching finished films at festivals, where the emphasis shifts to the importance of taste judgements. While gatekeeping relations with sales agents help to filter out a large number of films, taste judgements are more important to decision-making about the final selection of films. One specialised independent stressed the importance of watching a finished film as follow: We cannot take the risk of pre-buying and paying high fees for the films we acquire. It is absolutely necessary that we see films first so that we know precisely what we can afford to pay for the rights.

Their judgements are thus primarily based on the quality of finished films rather than the professional assessment of film packages. Despite the Table 6.4  Differences between major and specialised independents in the Dutch market The context

Major independents

Specialised independents

Film acquisition stage

Acquiring mid-range or crossover films at the pre-production or production stage The commercial potential of films is hard to predict at the pre-­ production or production stage Maintaining close and personalised relationships with a group of high-profile sales agents Mostly based on relationships with sales agents and information from scouts, as well as factors like reputation and status

Acquiring small, art-house films after being screened at festivals and sales markets The commercial potential is easier to predict after a film’s screening Maintaining relationships at arm’s length with a larger number of sales agents Based on their own taste judgements, but also on influences from sales agents and like-minded distributors

The acquisition context The search and selection process Decision-­making

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influence of taste judgements as an additional filter, specialised independents note that there are still a great many films that meet their criteria at this stage. As one specialised independent demonstrated: “The festivals are flooded with high quality, art-house films. There are simply too many films that qualify for a theatrical release.” While another specialised independent said: “I’ve worked in this business for more than 15 years. There are so many good films out there. It is a shame that I am only allowed to acquire between 10 and 20 titles every year.” Given the abundance of films on offer in the sales market, specialised independents further noted that they make decisions with an (imagined) audience in mind: they know the market in which they operate and the audiences usually reach. To this end, they also mentioned the importance of promotional activity for films, arguing that they look for elements or ‘hooks’ around which a marketing campaign can be built to draw audience interest. One executive demonstrated this as follows: “It is very expensive to buy an audience so we need to be creative and inventive.” This calls for strategies that draw attention to the content of films: “Our approach is that the content is the marketing and the marketing is the content.” Specialised independents often apply for public funding to develop promotional activities and organise or participate in events such as local film festivals and special screenings to generate attention for their  films. For instance, one distributor mentioned that they have established relationships with many small-scale festivals across the Netherlands to generate word-of-mouth attention for new films. Because specialised independents are usually able to watch finished versions of films, they can acquire films with a more precise understanding of the process of introducing and promoting films to Dutch audiences in mind. Finally, specialised independents noted that they often meet with like-­ minded distributors from other countries at sales markets to test and confirm taste judgements. Some of those meetings are pre-arranged, while others happen spontaneously. Such influences, what Friedman (2014: 31) calls “non-competitive informal networks” add further weight to their decision-making process.

6.7   Gatekeeping Networks Although the analysis of major and specialised independents demonstrates that each of them belongs to different gatekeeping networks, there are some general points to make about the influence of gatekeeping

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networks on distribution and cultural flows. Distributors are able to filter out a large selection of films through gatekeeping networks, which help to reduce the number of films to choose from. The pre-filter function of gatekeeping networks is important to make acquisition processes of distributors more manageable and effective. My analysis also demonstrates that the influence of gatekeeping networks on decision-making process extends beyond the role of a pre-filter function for distributors. Gatekeeping networks exert a powerful influence in the final stage of the selection and decision-making process of independent distributors. Sales agents and distributors are connected through gatekeeping networks, rather than operating in a vacuum or on their own. While independent distributors value factors such as reputation and status as well as their own taste judgements, it is clear that social influences from within gatekeeping networks (i.e. sales agents, scouts, like-minded distributors) are also critical to their decision-making. In particular, trustworthy and personalised relationships with partners in gatekeeping networks help to evaluate and confirm their decision-making. While gatekeeping studies often point to complexities with regard to decision-­making, my study of major independents and specialised independents demonstrates that their acquisition decisions are heavily regulated and controlled because they can often rely on several strategies to legitimise decision-making, regardless of the context in which operate.

References BFI (British Film Institute). (2017). Statistical Yearbook of Films in 2016. [Online]. Available at: https://www.bfi.org.uk/sites/bfi.org.uk/files/downloads/bfi-statistical-yearbook-2017.pdf [Accessed 2 October 2017]. Bourdieu, P. (1984). Distinction: A Social Critique of the Judgment of Taste. Cambridge, MA: Harvard University Press. Creative Europe. (2015). Introduction to Creative Europe MEDIA.  Creative Europe. [Online]. Available at: http://www.creativeeuropeuk.eu/sites/ default/files/Introduction%20to%20Creative%20Europe%20MEDIA.compressed.pdf [Accessed 31 March 2016]. DiMaggio, P. and Powell, W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, 48, 147–160. Entertainment One (eOne). (2018). eOne Homepage. [Online]. Available at: https://www.entertainmentone.com/about-eone/?service=film [Accessed 28 May 2018].

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Filmfonds. (2017). Film Facts and Figures of the Netherlands in 2016. [Online]. Available at: https://issuu.com/netherlandsfilmfund/docs/film_facts_and_ figures_2016_issuu [Accessed 2 June 2017]. Focus. (2017). World Film Market Trends. A statistical report produced by The European Audiovisual Observatory for the Cannes film Sales Market. Foster, P., Borgatti, S. and Jones, C. (2011). Gatekeeper Search and Selection Strategies: Relational and Network Governance in a Cultural Market. Poetics, 39, 247–265. Franssen, T. and Kuipers, G. (2013). Coping with Uncertainty, Abundance and Strife: Decision-making Processes of Dutch Acquisition Editors in the Global Market for Translations. Poetics, 41, 48–74. Friedman, S. (2014). The Hidden Tastemakers: Comedy Scouts and Cultural Brokers at the Edinburgh Festival Fringe. Poetics, 44, 22–41. German Films Service. (2017). Market Study German Films of the Number of Films Released in 2016  in the UK and Ireland, France, Germany, Belgium. [Online]. Available at: https://www.german-films.de/publications/marketstudies/ [3 September 2017]. Havens, T. (2011). Inventing Universal Television: Restricted Access, Promotional Extravagance, and the Distribution of Value at Global Television Markets. In: B. Moeran and J. Pedersen (Eds.), Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events. Cambridge: Cambridge University Press, pp. 145–168. Higson, A. (2003). English Heritage, English Cinema: Costume Drama Since 1980. New York: Oxford University Press. Husum, C. (2015). Private Interview with the Managing Director of the Danish Specialist Sales Agent Portobello Films via Skype, 5 December 2015. IMDb (Internet Movie Database). (2016). A Global Film Database. [Online]. Available at: http://www.imdb.com//. Lang, B. and Setoodeh, R. (2016). Sundance: The Math Behind Fox Searchlight’s Record-Shattering ‘Birth of a Nation’ Deal. Variety. [Online]. 27 January 2016. Available at: https://variety.com/2016/film/festivals/birth-of-a-nation-sundance-fox-searchlight-deal-1201689369/ [Accessed 17 February 2018]. Maltby, R. (2003). Hollywood Cinema. 2nd edn. Oxford: Blackwell Publishing. Miller, T., Govil, N., McMurria, J., Maxwell, R. and Wang, T. (2005). Global Hollywood 2. 2nd edn. London: British Film Institute. Neale, S. and Smith, M. (Eds.). (1998). Contemporary Hollywood Cinema. London: Routledge. Peterson, R. and Anand, N. (2004). The Production of Culture Perspective. Annual Review of Sociology, 30(1), 311–344. Wasko, J. (2003). How Hollywood Works. London: Sage Publications.

PART III

Online Film Distribution

I demonstrated in Chaps.  4, 5 and 6 how sales agents and distributors operate as part of gatekeeping networks through which films are filtered out against each other, and that such distribution arrangements prevail in the film industry. While it is clear that conventional gatekeeping arrangements will continue to prevail in the next few years, it is also clear that recent online developments in the marketplace brought about by increasing digitisation are impacting on those gatekeeping arrangements, and my aim in the last section of this book is to develop an understanding of changes now taking place. The focus shifts from gatekeeping practices to new power dynamics with an impact on gatekeeper processes: How is the role of gatekeepers changing with the advent of online distribution? Who are the gatekeepers in the new online market? Do they continue to perform a critical role as mediators between producers and consumers, regulating processes of inclusion and exclusion?

CHAPTER 7

VOD Platforms in the Era of Online Availability

7.1   The On-Demand Film Culture The online market has developed rapidly since the early 2010s when Michael Gubbins (2012) was already arguing that film distribution was in a state of transition and that online distribution had profound implications for consumption patterns. For instance, he predicted that online developments would dramatically change the way audiences access and consume films, televisions and music in the long term: We now live in an age of ubiquitous entertainment: in a couple of decades most of the developed world has gone from controlled and scheduled access to film, music and television to a multi-channel multi-linear and mobile access, increasingly on-demand. (Gubbins 2012: 67)

As Gubbins points out, online developments have provided new opportunities for audiences to access films. Video-on-demand (VOD) platforms enable them to browse through online film catalogues and decide which films they want to watch and when they access those films, and that is described by the term ‘on-demand viewing’. Chuck Tryon (2013: 10) understands on-demand viewing as the most recent advancement in discussions about the concept of time-shifting. He refers to the development of video rental services and videocassette recorders and players in the 1980s, which presented audiences with the authority © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_7

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to select from film collections and watch films on their own terms.1 This new approach to film viewing marked a shift away from linear programming by theatrical cinema exhibitors and television broadcasters. Linear programming—scheduling, in broadcast television terms—is restricted by capacity constraints and time limitations, with programmers scheduling films at specific times and for a limited period of time. These restrictions create a sense of urgency that is not among the principles of non-linear viewing. The differences between linear and non-linear viewing can be characterised by two contrasting pairings: between time specificity and time flexibility, and between capacity specificity and capacity elasticity. Given the popularity of the home video market since the 1980s, notions of time-shifting and audience choice intensified with the development of DVDs, Blu-rays and VOD viewing in the digital era. Tryon (2013: 10) points to the development of digital video recorders (DVRs) and DVD and Blu-ray box sets, making it easier for home audiences to watch entire film collections. He also points to the development of catch-up services in the 2000s, offering home audiences access to films previously shown on linear television. Such catch-up services are blurring the lines between linear and non-linear forms of watching films on television because audiences feel less urgency to commit to linear programming. The work of Kevin McDonald and Daniel Smith-Rowsey (2016), Amanda Lotz (2017) and Ramon Lobato (2019) underscores that the proliferation of VOD platforms has further promoted non-linear forms of film viewing in recent years. Audiences are now able to access online collections of tens of thousands of films, providing more comfort and flexibility. Netflix, iTunes, Amazon and YouTube have played, and continue to play, an important role in shaping the on-demand culture. In addition, advanced communication technologies have enabled new forms of digital delivery and mobile access: for instance, through consumer devices such as smart TVs, streaming media players such as Roku, game consoles, set-top boxes, tablets and smartphones. Consumer devices such as these allow audiences to move seamlessly between devices, with the desired mobility effect that film collections can be accessed and watched online at any time and on every location—within and outside the home. Such increased mobile access is another important aspect of the on-demand culture. 1  Tryon draws on Frederick Wasser’s (2002) historical analysis of development of video rental services and videocassette recorders and players.

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Having introduced the concept of on-demand culture and its revolutionary impact on film audiences, the next sections of this chapter examine the implications of online developments for the business of distribution. I will first analyse the economic growth of VOD platforms to demonstrate that the online market is a hugely important revenue window for films. I will subsequently analyse various types of VOD platforms, focusing on mainstream VOD platforms such as iTunes, Google, Netflix, Microsoft and Amazon; more specialised providers such as Mubi, BFI Player and Curzon Home; and video sharing providers such as YouTube and Vimeo. There are huge differences between such VOD providers, with some of them offering large collections of tens of thousands of films and others deliberately restricting their offer to a smaller curated collection of films. I analyse how the business models of different types of VOD platforms and the size and scope of their film offerings associate with the evolving nature of access in the online market. In particular, Chris Anderson’s (2006) influential work on the so-called long tail will be used to analyse the transformative impact of online distribution.

7.2   Economic Growth Stuart Cunningham and Jon Silver (2012: 36) note that the online VOD market initially developed slowly following the first experiments with VOD platforms in 1999, shortly after the introduction of DVDs. The first locally oriented platforms were formally launched in the early 2000s, involving companies such as Universciné in France, Lovefilm in the UK, Maxdome in Germany and Film is Now in Italy. Once Internet technology had sufficiently progressed by the mid-2000s, new players entered the marketplace and locally oriented platforms were competing against what would become the leading global VOD players—including iTunes, Google, Netflix, Microsoft and Amazon. In terms of the impact of online VOD viewing, the research company Digital Entertainment Group (DEG) collects figures for films and television series in the US home video market. Their figures (DEG 2016) demonstrate that DVD and Blu-ray revenue dropped from $16.3 billion (87%) in 2010 to $11.76 billion (65%) in 2013, while online VOD revenue increased from $2.5 billion (13%) to $6.46 billion (35%). Although annual home video revenue in the US remained consistent at between $18 and $19 billion in that period, an increasing proportion of such revenue thus involves online VOD sales and rentals. Online VOD revenue further

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1800 1600 1400 UK

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France

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Germany

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Italy

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2014

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Fig. 7.1  The growing online VOD market in European countries (in $ millions). Source: Statista (2016). Figures and estimates provided by Statista are based on market research, third-party data and macro-economic indicators

increased in the next two years, accounting for close to 50% of home video revenue by the end of 2015 (DEG 2016). Consultancy agency PricewaterhouseCoopers (2014) foresaw continuing growth in the next few years, predicting that online VOD sales and rentals would account for 66% of revenue in the US home video market by 2018. The rapid growth of the online market in the US and its value to the home video business clearly demonstrates the potential here, and industry observers have repeatedly argued that online viewing is the future. To that end, it is somewhat surprising that developments in most European countries have lagged behind American developments and still have a long way to go to develop into massive online revenue markets (Fig. 7.1). The research company Statista (2016) provides VOD figures for different world regions and countries.2 In terms of European countries, the development of the online VOD market in the UK stands out, generating $809 million and accounting for 38% of home video revenue in 2014. Statista forecasts that online VOD revenues in the UK will grow 2  Figures provided by Statista are subject to change but nevertheless remain useful to acquire a basic understanding of online growth.

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further to $1591 million by 2020. Substantial growth is equally expected in key European markets where the online VOD market is less well developed, with revenue in France projected to increase from $281 million in 2014 to close to $469 million in 2020, and revenue in Germany from $269 million to $886 million (Statista 2016). The online VOD market in other large European markets such as Italy, Russia and Spain is expected to grow much more slowly, with none of them expected to generate more than $210 million in 2020. By comparison, European markets with much smaller populations, such as The Netherlands and Sweden, are expected to generate respectively $249 million and $274 million by 2020. Although there are huge differences between European countries, the figures demonstrate overall growth in Europe: from close to $3 billion in 2014 to close to $5 billion by 2020. Having outlined the economic development of the online VOD market, I will now analyse the broader underpinnings of the on-demand film business in more depth.

7.3   The On-Demand Film Business While the traditional (physical) media economy—sometimes referred to as the analogue business—is by necessity built on an assumed scarcity of content, it is clear that the online economy is built on the reversed logic of content abundance. Anderson (2006) has made several assumptions about online distribution. For instance, he speaks of online distribution as a democratising force that enables access to creative works of varying sizes and shapes, rather than imposing restrictions on media circulation (2006: 55). In particular, he foresees increased opportunities for non-mainstream content with traditionally limited distribution possibilities at the specialised end of the market to enable access to VOD platforms. This notion of increased access for non-mainstream content also forms the basis for his theory about long tail economics, in which he argues that the online market is about to restore the unevenly balanced cultural playing field between mainstream and non-mainstream content.3 Given the importance placed by Anderson and others on the evolving nature of cultural access and content abundance in the online market, I will analyse in the next sections to 3  I follow Nikdel (2017) by using the term ‘cultural playing field’ to describe how the dynamic between mainstream and non-mainstream content plays out in the film industry. Anderson does not use the term in his book (Anderson 2006).

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what extent various types of VOD platforms associate with principles of ‘open’ or ‘restricted’ access. While Anderson draws a distinction between ‘mainstream’ and ‘non-mainstream’ (or ‘niche’) content, it is worth noting that the distinction between ‘mainstream’ and ‘specialised’ films is more common in the film industry, and that is the terminology that I will use in this chapter. The BFI, for instance, adopts the term specialised film to refer to “films that do not sit easily within a mainstream and highly commercial genre”, such as independent, world cinema, documentary, vintage and festival films (BFI 2016). Transactional VOD Platforms The development of Transactional VOD (TVOD) platforms has been critical in providing greater access to a wider range of films in the marketplace. In line with conventional sales and rental models in the film business, TVOD platforms require audiences to pay for each film they watch. Two models in particular have been adopted by TVOD platforms: download-­to-rent allows audiences to rent films for a short period of time (audiences are normally given 48 hours to watch films), and download-to-­ own—also known as an electronic-sell-through—allows audiences to purchase films and watch without time restrictions. The model of content abundance is most visible on mainstream TVOD platforms: in particular, the catalogues of Google, iTunes, Amazon and Microsoft have grown enormously in recent years. In line with Anderson’s assertion about long tail distribution, it is in the interest of these mainstream TVOD platforms to make large catalogues of films available, in their thousands. These catalogues include a combination of mainstream and specialised films. Amazon, for instance, claimed that their TVOD catalogue in the UK (called Amazon Video) included more than 14,000 films for rental and 27,000 films for purchase in June 2017 (Amazon Video 2017). iTunes, in addition, claims to provide access to 85,000 films in the UK (iTunes 2017). Such enormous quantities are of course hard to verify and should therefore be interpreted loosely, but it is clear that tens of thousands of films are available online. In order to guide users through such enormous TVOD catalogues, they are ordered by categories such as popular genres, film actors, directors, distribution companies and so on. They also rely on algorithm technology, where computers replace the cultural gatekeeper role of human agents, to gather consumer intelligence and provide recommendations to users. For instance, for each film in their

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catalogue, the algorithm provides a list of films that share broad similarities, often based on the viewing behaviour of other users. The mainstream TVOD catalogues of Google, iTunes, Amazon and Microsoft have been made available in a large number of countries in recent years. For instance, Google introduced its film catalogue under the name Google Play Movies in the US in March 2012, with South Korea, Australia, Canada, the UK, France, Spain, Brazil and Russia following later that same year. Their service further expanded to 63 countries by March 2014 and to 117 countries by December 2016 (Google Play Movies 2016). Despite the growing availability of films in international markets, Tryon (2013: 41) notes that licensing regulations put limits on Anderson’s claims about the democratising power of online distribution. One important restriction in this respect is that distribution is organised on a territory-­ by-­territory basis due to geo-blocking regulations which apply in the physical economy as well as in the online economy. The process of enabling access to the same films on the same TVOD platforms in a range of international markets thus requires the commitment of international distributors, but they develop strategies based on individual needs in their respective local, national markets or territories. The TVOD catalogues of Google, iTunes, Amazon and Microsoft are therefore by no means always identical in each country or distribution territory. In reinforcing this point, Tryon notes that the contractual terms of online distribution deals also impose restrictions on the availability of films on TVOD platforms. For instance, contractual terms are reliant on the type of rights holder (e.g. the producer, sales agents or distributor) that negotiates the deal, and on the territory for which the deal is negotiated. As noted in Chap. 5, a film may not have a distributor in each territory, in which case the producer or sales agent negotiates deals directly with VOD platforms. Rights holders may also have developed online distribution arrangements that curtail access to specific TVOD platforms. Further, Lobato (2009: 174) notes that transactional platform providers such as Google, iTunes and Microsoft require rights holders to work with content aggregators to make films available on their platforms. Content aggregators, as I will explain in more detail in Chap. 9, are online gatekeepers who aggregate large collections of films from rights holders and negotiate package deals with globally oriented platforms. The fact that some of those globally oriented platforms only work with content aggregators limits the options available to individual rights holders, not least since content aggregators partake in the process of revenue sharing. Some producers,

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for instance, prefer to organise distribution directly with VOD providers without the interference of distribution gatekeepers. Only Amazon provides an alternative to working through content aggregators. They allow rights holders of smaller films to make them directly available on their TVOD and Subscription VOD (SVOD) platforms in addition to conventional distribution  arrangements through content aggregators, as I will describe further in the next section. With regard to the financial terms of TVOD deals, mainstream TVOD providers do not usually pay upfront licensing fees to make films available on their platforms, with the financial rewards instead being based on the performance of films on those platforms, and the rights holders retaining a considerable share of pay-per-view sales transactions. TVOD deals are usually non-exclusive, allowing rights holders to make films available on various TVOD platforms at the same time and reach other audiences. While TVOD contracts are time-bound, films generally remain available for a relatively long period of several years rather than a short-term period of one year or even shorter. In addition to the leading mainstream TVOD platforms with a global presence in international markets, there are also nationally oriented mainstream TVOD platforms. These are mainly television broadcasters or providers, such as Sky, Virgin and BT in the UK market. Alongside linear programming and catch-up services, they have established their own digital VOD services. The online film catalogues on their VOD services are smaller in size than the catalogues of globally oriented TVOD platforms because they are part of a broader television offering. Such TVOD deals are also time limited. There are thus certainly factors that restrict films from flowing freely on TVOD platforms. On the other hand, there is a strong democratising influence, with globally oriented mainstream platforms enabling easy access and providing distribution opportunities for tens of thousands of films. The fact that these globally oriented mainstream TVOD providers are not required to pay upfront licence fees allows them to grow their catalogues in line with the logic of the economics of abundance. I will further analyse how this logic compares with SVOD platforms. Subscription VOD Platforms The development of SVOD platforms has also been critical in enabling greater access for films in the marketplace. Unlike the transactional

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­ ay-­per-­view model, audiences pay a set monthly or yearly membership or p subscription fee in exchange for unlimited access to the SVOD provider’s catalogue. Globally oriented mainstream SVOD providers such as Netflix and Amazon Prime Video have grown quickly in recent years, attracting tens of millions of subscribers. Because of their popularity, it is generally argued that they are particularly responsible for the economic growth in the online market and for promoting the on-demand culture. In line with the growing catalogues of mainstream globally oriented TVOD platforms, the model of content abundance is visible on mainstream SVOD platforms. According to research undertaken by banking corporation Barclays, the catalogues of Netflix in the US market included 4500 films in March 2016 (Spangler 2016). Their collection is smaller in size than globally oriented TVOD platforms because rights holders usually require an upfront fee for SVOD distribution rights, and SVOD platforms work with acquisition budgets which put limits on their spending. SVOD providers negotiate deals to license individual films or packages of films for  their  subscribers. They are usually required to pay a higher fee for exclusive rights to make films available only on their subscription platform. Such distribution deals are also bound by time restrictions. SVOD catalogues regularly change, with a small collection of new acquisitions being introduced each month to replace other films in order to draw the attention of subscribers over an extended period. SVOD rights for such rotating catalogues are usually licensed for a relatively short fixed period—often between 12 and 24 months, but occasionally longer. Mainstream SVOD platform providers are targeting a wide range of audiences. However, their promotional activity revolves around a small selection of contemporary films with high production values and the involvement of a well-known director and star actors—what industry practitioners refer to as ‘premium content’. In most cases, this involves mainstream Hollywood films. SVOD platforms are required to pay a relatively high distribution fee for the online rights in return for showing such content exclusively on their platform. This notion of exclusivity through restricted access is perceived as an important quality in creating a brand identity, playing an important role in attracting audiences. It is a characteristic that distinguishes mainstream SVOD platforms from TVOD platforms. The ‘rest’ or ‘back’ catalogue of SVOD platforms is more diverse and constitutes a much larger collection of thousands of films. In order to

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show such films, SVOD platforms have negotiated deals with distribution companies who have built up large film collections of archive films and contemporary films. For instance, the catalogue of the American distribution company Epix includes around 2000 Hollywood studio films, with well-known films such as Star Trek: The Future Begins (2009), Iron Man (2008), Indiana Jones and the Kingdom of the Crystal Skull (2008) and The Godfather series (1972–1990). Trade observers Littleton (2015) and Stedman (2015) note that Netflix first licensed the collection in 2010 as part of a ground-breaking five-year deal with Epix. The terms of the deal allowed Netflix to show the film collection exclusively on their SVOD platform in the first two years, and on a non-exclusive basis for the remainder of the contract. Epix negotiated additional deals with Amazon’s SVOD platform ‘Amazon Prime Video’ in 2012, and with Hulu, another major SVOD platform in the US, in 2015. What this example demonstrates is that film collections may become available on a variety of SVOD platforms, providing wider distribution for films. However, the fact that SVOD platforms work with rotating catalogues has a restricting impact on processes of online availability and access. As noted above, Amazon Prime Video is Amazon’s SVOD platform. Unlike Netflix and Hulu, their film and television collection is part of a broader offering that includes access to a music catalogue as well as a  free  delivery service for physical products purchased from  Amazon’s online shop. They also offer a larger film collection than Netflix and Hulu: research undertaken in 2016  by Barclays reveals that their SVOD catalogue in the US included more than 18,000 films by March 2016, about three times the size of Netflix and four times the size of Hulu (Spangler 2016). The fact that Amazon works with two SVOD revenue models for rights holders has contributed to this substantial difference in volume. On the one hand, they acquire the SVOD rights of thousands of films for which they pay upfront fees, and commit to the same rules of exclusivity and restricted access as their competitors. On the other hand, they work with a different revenue model to allow other rights holders to make films available directly on their Prime subscription service, much more in keeping with the logic of long tail economics. Those rights holders—often small-­scale, stand-alone producers dealing with less familiar films—are not paid upfront fees, but instead must wait for a fee based on the performance of their films on Amazon Prime Video (i.e. the number of hours streamed). The benefit for rights holders is that they are able to submit films directly to one of the

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world’s most powerful VOD platforms, without having to go through content aggregators, as explained in the previous section on TVOD platforms. While filmmakers need to commit to technical requirements with regard to digital delivery and formatting, the submission process is unfiltered: Amazon supports the provision of extra content rather than restricting access to such content as a gatekeeper. Tom Kerevan, a first-time producer with the UK production company Cannibal Films, explained in a public interview that this model enabled him to make his micro-budget film Tear Me Apart (2015) available on Amazon’s transactional and subscription services (Kerevan 2017). This also meant that he organised the marketing campaign by himself: for instance, he used social media to draw attention to the film on Amazon (Kerevan 2017). Such self-­distribution opportunities present an advantage for filmmakers, but also for Amazon subscribers who are given access to a greater range of films. This approach to providing distribution opportunities for first-time producers on Amazon’s SVOD platform demonstrates that the logic of content abundance can also be applied in the SVOD business. Even though there is no doubt that Amazon’s prevailing SVOD revenue model revolves around a more conventional SVOD offer, the company has reduced entry barriers to the online market by offering an alternative revenue model for additional content. Amazon’s commitment to providing distribution opportunities for such additional content aligns with Anderson’s vision of long tail economics: That’s the root calculus of the Long Tail: The lower the costs of selling, the more you can sell. As such, aggregators [in this case, Amazon] are a manifestation of the second force, democratizing distribution. They all lower the barrier to market entry, allowing more and more things to cross that bar and get out there to find their audience. (2006: 88)

While Amazon Prime is a good example of the long tail economics model, other examples of SVOD platforms with similar strategies are rare at the time of writing. Specialised TVOD and SVOD Platforms While the leading mainstream platforms work with relatively large catalogues to attract a wide range of audiences, specialised TVOD and SVOD platforms tend to work with smaller catalogues of predominantly

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specialised films. They present themselves as more autonomous, niche platforms, whereby the carefully restricted size and scope of the catalogue is key to establishing a coherent but distinctive identity. Their selective approach is set against computer-driven algorithmic technology of mainstream platforms, as Andrew Higson (2017) explains: Mainstream platforms such as Netflix and Amazon are organised around complex recommender algorithms. Smaller, more specialised platforms such as Mubi for film and Walter Presents for television drama present themselves as ‘anti-algorithmic’ curated spaces, where a small amount of carefully selected material is made available to consumers. These are two different systems for recommending viewing experiences; as such, they are two different means of cultural gatekeeping, two different means of shaping and reinforcing taste. Curated sites function more like public service operators, presenting the curator as the guardian of ‘good taste’, who knows their ‘culture’. Algorithmic platforms on other hand profess to know the individual consumer and to make recommendations based on that personalised knowledge.

Higson underlines the differences between mainstream and specialised platforms in terms of recommending films to audiences. Mainstream platforms work with big data and algorithm technology to make ‘personalised’ selections out of large collections of thousands of films. By contrast, specialised platforms work with ‘hand-picked’ selections of films that are based on expert taste judgements of ‘human’ curators, underlining the importance of their gatekeeper function. It is precisely through smaller and more selective catalogues that specialised platforms are able to build their identity: for instance, by presenting new film releases as part of a repertoire that includes vintage films and themed programmes paying homage to particular filmmakers. Examples of specialised platforms in the UK market are Curzon Home Cinema, Mubi and BFI Player. Curzon Home Cinema is a TVOD platform that offers a relatively small rolling catalogue of classic and contemporary films, and also themed programmes to bring specialised films to the attention of audiences. Their Programming Executive, Heather McIntosh, notes that they deliberately work with a catalogue capacity of 600 films to strike a balance between audience choice and exclusive cultural identity (McIntosh 2017). New film releases are given special attention on the platform, particularly if they are at the same time released in UK cinemas. In order to support the release, they often organise special

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programmes to provide a historical and cultural context through which to understand how films relate to specific film traditions. Mubi is an SVOD platform that is available in international markets. Unlike most other platforms, “their offer involves a small selection of only 30 films at any one time, with the list changing continuously, and each film being shown for a limited period of just 30 days: every day, a new film on the platform takes the place of another” (Smits et al. 2018: 296). On their website, Mubi describe themselves as “a curated online cinema bringing you cult, classic, independent, and award-winning movies” (Mubi 2017). For instance, in May 2017, their collection involved new films and documentaries such as The Park (Manivel 2016) and Between Fences (Mograbi 2016) alongside vintage films such as La Rupture (Chabrol 1970) and Juliet of the Spirits (Fellini 1965), more recent world cinema such as Storm Children, Book One (Diaz 2014) and Battle Royale (Fukasaku 2010), and themed programmes of films by directors such as Frank Capra and Jaime Rosales. The BFI Player is the VOD platform of the British Film Institute, and their offer includes TVOD, SVOD and also Free VOD (FVOD) viewing. While they have also developed a curated approach to film viewing, their VOD collections are more diverse and larger in size than Curzon Home Cinema and Mubi. As the flagship British film agency, they enable access to specialised British cinema and global cinema to create a more diverse film culture. The fact that the BFI has built up a large collection of thousands of specialised films over the last 80 years is reflected in the branding of the BFI Player: “The British Film Institute presents the best global cinema on-demand: From classic and contemporary films to the best of the BFI national archive” (BFI Player 2017). Their collection is available on their TVOD service, as their Digital Director Edward Humphrey (2016) explains in a public interview: One of our objectives is to enhance the diversity of choice. Whilst there has been a huge growth in the number of platforms and in audiences on those platforms, we are very conscious that the diversity of choice on those platforms isn’t necessarily big, particularly for new films. So what we want to do with BFI player is support the market, which was already developing with companies like Curzon, and make sure there is an opportunity for audiences to find a wide diversity of films at home; and that would include independent film, foreign language films, documentaries, the sort of films that audiences on the mainstream platforms don’t really get much of a look in.

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As a cultural institution, we are not driven only by new releases, we are very keen that audiences explore and discover the whole catalogue of British and world cinema. Having our own platforms allows us to tell those stories. As an organisation, we are very focused on curation and programming, and we could bring that to the fore on our platform when we tell audiences about films: we can tell something that comes from the heart of the film, and we can start to build a story about the film, and inform about the director, and the genre and the period. So we can take audiences on a journey through the film in a way that maybe mainstream platforms wouldn’t.

Humphrey explains that the BFI Player has been developed to further support the specialised market by widening access for a more diverse range of films. The fact that such films are introduced as part of special programmes or themes (i.e. by director, genre or period) underlines the important function of their curators. Despite their extensive and diverse film offer, BFI Player has experienced great difficulties in terms of reaching online audiences. Humphrey notes in the same conversation that sales and rental numbers of catalogue titles were initially disappointing due to the competitive pricing offer of SVOD platforms. As a result, they changed their strategy and established an additional SVOD (called BFI Player+) in October 2015, involving a much smaller collection of only 300 films. He notes that initial viewing figures are positive. In particular, subscribers are watching more classics and archive films than those on their TVOD platform. In terms of the potential of the specialised market for SVOD platforms, he situates BFI Player+ in the context of a broader trend in the UK and the US: We have seen a rise of niche SVOD services in the US and in the UK. Niche platforms are targeting particular genres: there is one platform called Shudder that is targeting horror only and there is one platform targeting kids only. And what we are seeing is the emergence of independent films on those platforms. The emergence of niche subscription services is certainly something that the market can take and audiences are ready for it. (Humphrey 2016)

As implied by Humphrey, the inclusion of specialised, independent films in smaller carefully selected collections of SVOD platforms also

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provides commercial opportunities for both platforms and filmmakers, and a new cultural prominence and visibility for the films themselves. The strategy of specialised SVOD platforms to generating economic and cultural values for such films is dynamic rather than static: it is designed to make a curated  selections of  films available as well as visible to online audiences. This way of introducing and promoting specialised films on specialised SVOD platforms is different from TVOD platforms, where they appear rather anonymously as part of much larger catalogues of thousands of films. Video Sharing Platforms The development of the on-demand market has also provided opportunities for video sharing platforms. While there are now a great many such video sharing platforms globally, YouTube and Vimeo are the best-known examples in Europe and the US in terms of delivering film content to audiences. They offer a combination of professional content and  user-­ generated content, which is available to watch for free or for a paid fee. Such content includes film and television trailers, short films, music clips and entertainment videos, but also feature films and television series and programmes. The most popular videos, particularly short videos, are watched by millions of viewers. While providing free content for audiences is an important part of the business model developed by YouTube and Vimeo, generating more economic value from paid content has become another priority in recent years. They operate their own TVOD services in order to make films as well as other paid content available for sale and rental. YouTube, which is owned by Google, launched its TVOD service in April 2009 in the US, while Vimeo launched in March 2013. They have developed collaborations with rights holders such as producers, sales agents, distributors and content aggregators to license several thousands of films for their TVOD catalogues, with consumer prices varying from £0.50 ($0.75) to more than £10.00 ($15.00). YouTube’s TVOD collection includes new popular film releases, classics, documentaries and mainstream genre films such as comedies, dramas and animations. For instance, new releases in July 2017 involved popular films like Kong Skull Island (2017), Resident Evil Vendetta (2017), Hidden Figures (2016), Logan (2017) and Fifty Shades

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Darker (2017). By contrast, Vimeo’s TVOD collection focuses more specifically on smaller, specialised films. YouTube expanded their offer in 2015 with the introduction of a subscription service in the US market, YouTube Premium (formerly known as YouTube Red). One year later, it was also introduced in Australia, Mexico, New Zealand and South Korea. Their SVOD platform was established to provide advertising-free access to entertainment videos on YouTube and to Google’s online music platform Google Play Music. In order to further enhance this offer, YouTube Premium also started to invest in their own distinctive brand of films and television series. Rather than licensing film collections, they developed a number of in-house productions, also known as ‘originals’. This new focus on producing films is illustrative of a distribution strategy developed by online players to offer ‘premium’ and ‘exclusive’ content on their platforms. Netflix and Amazon are particularly known for developing such in-house productions, as I will explain in detail in the next chapter, but video sharing platforms have developed similar strategies. In order to develop original productions, talented filmmakers and creative talent on YouTube are strategically approached to build on their previous success, as trade journalist Zelenko (2015) notes while quoting the Chief Business Officer of YouTube, Robert Kyncl: Kyncl also believes Red needs premium content, but he is committed to creating it on YouTube’s terms. The service has no plans to pay big bucks to license the NFL or Seinfeld, Kyncl told me. He sees Hulu, Amazon, Netflix, HBO, and others all bidding for the right to show the same films and TV series, all trying to grab the hottest actors, producers, and directors to make originals. He wants to move against that tide. “To us what is important is we are not doing what everyone else is doing, competing for the same sources of material, the same creative elements. We are looking for people who are proven to work really well on our platform.”

By investing in their own talent, YouTube Premium provides them with the opportunity to develop their creative work further, while they enhance their SVOD offer with a distinctive brand of premium content designed for YouTube users. They invested in 15 ‘original’ micro-budget and low-­ budget films in the first two years since the launch of their SVOD platform. This includes the drama The Thinning (2016), directed by the

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popular transmedia producer Michael J. Gallagher and starring YouTube star Logan Paul. Another example is the documentary A Trip to Unicorn Island (2016), directed by YouTube personality Scott Winn and starring YouTube star Lilly Singh. While The Thinning and A Trip to Unicorn are feature films, there are also examples of shorter ‘original’ films, such as Snap (2017/32 minutes) and Reggae Shark Adventures (2017/23 minutes). Vimeo, in addition, has also responded to the increasing need for developing ‘premium’ and ‘exclusive’ content. They developed 10 original micro-budget and low-budget films in 2015 and 2016. Their ‘originals’ include feature documentaries such as Wizard Mode (2016), Toro Y Moi: Live from Trona (2016) and Garfunkel and Oates: Trying to Be Special (2016), but also shorter films such as All Killer (2016/19 minutes) and the documentary Pear Cider and Cigarettes (2016/35 minutes). Their originals are designed to further promote and create their vision: the form and style of their feature documentaries are directly inspired by popular short videos on Vimeo. Vimeo and YouTube are thus both experimenting with in-house productions. For YouTube, it is a key means of creating a more distinctive SVOD and TVOD offer. Vimeo, on the other hand, makes such films available only on their TVOD platform. Despite serious plans to establish a subscription platform, they decided in June 2017 that they no longer intend to realise that ambition (Spangler 2017). The fact that YouTube and Vimeo have enormous online fan bases in international markets demonstrates the potential for in-house productions to reach audiences. Given the distinctive creative vision of YouTube and Vimeo, they are blurring the lines between mainstream platforms on the one hand, and video sharing platforms on the other, as well as the lines between professional content and user-generated content. The digital landscape opens up new opportunities for their content creators to monetise content in the online market through video sharing platforms. This change underlines Anderson’s (2006: 16) claim that online distribution transcends traditional conventions and boundaries, whereby new hybrid forms of content are widening audience choice and audience interest.

7.4   Market Fragmentation Anderson (2006: 180) associates the proliferation of platforms beyond the mainstream with increasing market fragmentation which he sees as a positive development in terms of providing access to a wider range of

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non-­mainstream products. In his view, audiences have always been interested in specialised content, and digital technology makes it easier to provide access to a diverse range of specialised VOD platforms: “…once people shift their attention online, they don’t just go from one [mainstream] media outlet to another—they simply scatter. Infinite choice equals ultimate fragmentation” (2006: 181). While Anderson does not deny that specialised or art-house cinema venues exist in addition to more mainstream multiplex venues in the physical, analogue market, he sees  the proliferation of specialised VOD platforms as an important development that contributes to a more opportunities  for specialised content. Cultural Democratisation? This argument about market fragmentation and the role of specialised platforms beyond the mainstream has become increasingly important in discussions about film and media industries in more recent years because scholarship has increasingly called the democratising power of mainstream platforms into question. Studies by Anita Elberse (2013), Michael D. Smith and Rahul Telang (2016) and Philip M. Napoli (2016) put serious limits on Anderson’s long tail vision. Napoli, for instance, notes that “research evidence and the evolution of industry practice have demonstrated that the long tail phenomenon has failed to take hold to the extent expected” (2016: 341). Smith and Telang also dispute the claim that the cultural playing field between mainstream and non-mainstream content is dramatically changing, although their research demonstrates that technological and industrial processes are impacting on conventional audience consumption patterns. They argue that such processes could pose a threat to the blockbuster model in the long term (2016: 64). Critically, in her influential book about blockbusters in the entertainment industries (including film), Elberse argues that the winner-takes-all economy— whereby a relatively small number of incredibly successful blockbusters accounts for most of the revenues in the marketplace—has become stronger rather than weaker in the online era. In other words, new online opportunities support greater cultural homogenisation as opposed to cultural heterogenisation. While globally oriented mainstream VOD providers present themselves as platforms with enormous catalogues, discussions about the film industry also point to the important influence of algorithm technology on

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audience consumption. If audiences are provided with greater online choice, they become more reliant on computer-generated algorithm recommendations to help filter out films against each other in order to decide what to watch. It has been argued that such algorithm recommendations guide audience interest to blockbusters rather than specialised films, as trade analyst Gady Epstein (2017) puts it: The economics of blockbuster films, which are shown in cinemas, might seem different from those of blockbuster music and TV streaming, but in the digital age they and other entertainment products have much in common. There is almost no limit to the supply of entertainment choices in every category, but people’s awareness of these products and their ability to find them is constrained by the time and attention they can spare. Overwhelmed by the abundance of choice, they will generally buy what they are most aware of. The algorithms used to make recommendations, offered by many sites, reinforce this trend: they push consumers to what is popular rather than send them off to explore obscure parts of the tail.

Such argumentation about the impact of algorithms goes against Anderson’s thinking that specialised films benefit from long tail economics: even though the tail grows longer as more specialised films become available to audiences, it remains difficult for such films to compete against blockbusters to reach an audience. In particular, the marketing budgets for blockbusters are generally much higher, which helps to generate attention among audiences. Epstein (2017) notes: Paradoxically, enabling every individual and product on the planet to find a market has made it next to impossible for the market to find them. Consumers generally favour whatever they find on their mobile screens or at the top of their search results. The tail is indeed long, but it is very skinny.

On the other hand, we have seen that the development of market fragmentation provides increasing opportunities for specialised films if they are selected for specialised platforms. Such platforms open their ‘gates’ for a relatively small collection of specialised films they see of high interest, providing a much higher degree of visibility. In other words, they follow the logic of restricted access and exclusivity to create value for specialised films and support their commercial performance. Because specialised VOD platforms have developed alongside mainstream VOD plat-

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forms, I will further analyse Anderson’s claims about market fragmentation in relation to the diversification of film culture in the next section. Amazon Channels The development of Amazon Channels (formerly known as the Amazon Streaming Partners Program) is the best current example through which a great number of predominantly specialised providers make their ­collections available to audiences. Launched in December 2015 in the US market, it allows Amazon Prime members to supplement their Prime subscription with other individual SVOD channels to which they can subscribe for an additional fee. While they started with 30 partner channels in the US market, trade journalist Porch (2016) notes that this number increased quickly to nearly 100 partner channels by December 2016. More recently, in May 2017, they also launched in the UK and Germany. The Amazon Channels offer involves a combination of existing television channels and VOD platforms, as well as new channels created by distributors for specific consumer segments. They typically focus on specific genres or collections that are tailored to specific types of audiences. Shudder is a VOD platform that specialises in horror films, UP Family is a television channel that specialises in family films, and Mubi is a VOD platform that specialises in world cinema. In addition, distributors are taking advantage of the fact that they can introduce their films to audiences as part of their own catalogue, and therefore to work on brand building. Some distributors, such as Curzon Artificial Eye and Arrow Films in the UK, have established strong brands in the DVD/Blu-ray market. Amazon Channels provides opportunities to develop their brands further by enabling audiences to subscribe to their brands and gain access to their collections. It also means that their films can gain access to different channels at the same time. The fact that Amazon acts as a service facilitator for such channels results in a mutually beneficial relationship, whereby Amazon offers increased choice to subscribers on their Prime service and individual channels secure a visible presence on one of the most powerful VOD platforms. Given the innovative character of Amazon Channels, journalists Bury and Williams (2017) draw a comparison with pay TV packages put together by television broadcasters. In the UK, television broadcasters such as Sky, Virgin Media and BT offer large pre-programmed packages of channels with films and other forms of entertainment, for which their consumers pay a fixed fee. Amazon Channels also provides access to a large

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number of channels, but they allow Prime members to choose for themselves if they want to complement their Prime subscription with so-called add-on subscriptions. In line with the logic of the on-demand culture, Prime members are empowered to make their own selections and take more control over their film viewing. Rather than committing to large pre-programmed and often expensive packages of television broadcasters, they can be more selective in terms of subscribing to individual channels. Bury and Williams note that such increased flexibility in choice has already impacted on audience behaviour in the US: “Amazon Channels has caused a stir in the US, where cable operators are suffering as consumers increasingly reject expensive bundles of channels in favour of a pick-and-mix of streaming options.” This development is also described by the term ‘cord-­ cutting’, whereby audiences subscribe to VOD platforms instead of television broadcasters (Strangelove 2015). Amazon Channels is innovative in the sense that it provides greater access for films, but it has yet to demonstrate that it also makes a difference in terms of generating commercial value for individual channels and films, resulting in increased market fragmentation. That ambition is limited by the fact that it is accessible only to Amazon Prime members. On the other hand, Amazon CEO Jeff Bezos announced in April 2018 that more than 100 million consumers worldwide have already subscribed to their Prime service (Soper 2018). While Amazon Channels provides an additional service for Prime members, it is also a serious effort of one of the most powerful players to attract both mainstream and specialised audiences: some channels are more likely to attract mainstream audiences and others are more likely to attract specialised audiences. In other words, it is a good example of an online strategy to make specific film catalogues more accessible and visible to different types of audiences. Returning to Anderson’s argument about specialised content, the question remains if such initiatives will result in a more evenly balanced online playing field. It is unclear if increased access to specialised platforms will help to make a difference, particularly because Prime members can also subscribe to mainstream channels. The fact that the market becomes more fragmented might also work to the benefit of mainstream content. The logic of the winner-takes-all economy has very much remained in place at the level of online consumption in today’s market. Anderson’s utopian premise is still far from being realised.

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References Amazon Video. (2017). Amazon Instant Video Catalogue UK. [Online]. Available at: https://www.amazon.co.uk/PrimeVideo [Accessed 15 June 2017]. Anderson, C. (2006). The Long Tail: Why the Future of Business is Selling Less or More. New York: Hyperion Books. BFI (British Film Institute). (2016). Definition of Specialised Film. [Online]. January 2016. Available at: https://www.bfi.org.uk/sites/bfi.org.uk/files/ downloads/bfi-definition-of-specialised-film-bfi-neighbourhood-cinema-2016-01.pdf [Accessed 27 March 2017]. BFI Player. (2017). BFI Player Homepage. [Online]. Available at: http://player. bfi.org.uk/ [Accessed 5 May 2017]. Bury, R. and Williams, C. (2017). Amazon Launches UK Pay-TV Service. The Telegraph. [Online]. 23 May 2017. Available at: http://www.telegraph.co.uk/ business/2017/05/22/amazon-launches-uk-pay-tv-service/ [Accessed 10 June 2017]. Cunningham, S. and Silver, J. (2012). On-line Film Distribution: Its History and Global Complexion. In D.  Iordanova and S.  Cunningham (Eds.), Digital Disruption: Cinema Moves On-line. St. Andrews: St. Andrews Film Studies, pp. 33–67. Digital Entertainment Group (DEG). (2016). End-of-the-year figures US Home Entertainment in 2015. [Online]. Available at: http://degonline.org/category/data-resources/ [Accessed 1 June 2016]. Elberse, A. (2013). Blockbusters: Hit-Making, Risk-Taking, and the Big Business of Entertainment. New York: Henry Holt and Company. Epstein, G. (2017). Mass Entertainment in the Digital Age Is Still About Blockbusters, Not Endless Choice. The Economist. [Online]. 11 February 2017. Available at: http://www.economist.com/news/special-report/21716467technology-has-given-billions-people-access-vast-range-entertainment-gady [Accessed 12 April 2017]. Google Play Movies. (2016). Country Availability for Apps & Digital Content. [Online]. Available at: https://support.google.com/googleplay/answer/ 2843119?hl=en-GB [Accessed 16 June 2017]. Gubbins, M. (2012). Digital Revolution: Active Audiences and Fragmented Consumption. In D. Iordanova and S. Cunningham (Eds.), Digital Disruption: Cinema Moves On-line. St. Andrews: St. Andrews Film Studies, pp. 67–101. Higson, A. (2017). Workshop 1. A Research Report. [Online]. Available at: https://ondemandproject.wordpress.com/workshop-1/ [Accessed 15 June 2016]. Humphrey, E. (2016). Public Interview with the Digital Director of the BFI Player at the ‘UK Film Distribution: What’s Changing?’ Event in London, 13 June 2016.

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iTunes Video. (2017). iTunes Video Catalogue UK. [Online]. Available at: https://www.apple.com/uk/itunes/video/ [Accessed 15 June 2017]. Kerevan, T. (2017). Public Interview with the Managing Director of Cannibal Films at the ‘Distributing Films Online’ Workshop in London, 27 April 2017. Littleton, C. (2015). Amazon Extends Epix Movie Licensing Pact. Variety. [Online]. 23 February 2015. Available at: http://variety.com/2015/digital/ news/amazon-extends-epix-movie-licensing-pact-1201439607/ [Accessed 29 April 2017]. Lobato, R. (2009). The Politics of Digital Distribution: Exclusionary Structures in Online Cinema. Studies in Australasian Cinema, 3(2), 167–178. Lobato, R. (2019) Netflix Nations: The Geography of Digital Distribution. New York: New York University Press. Lotz, A. (2017). Portals: A Treatise on Internet-Distributed Television. Michigan: Michigan Publishing. McDonald, K. and Smith-Rowsey, D. (2016). Introduction. In: K. McDonald and D. Smith-Rowsey (Eds.), The Netflix Effect: Technology and Entertainment in the 21st Century. New York: Bloomsbury Academic, pp. 1–13. McIntosh, H. (2017). Public Interview with the Programming Executive of Curzon Home Cinema at the Distribution Rewired Event in Edinburgh, 26 June 2017. Mubi. (2017). Mubi Homepage. [Online]. Available at: https://mubi.com/ about [Accessed 6 May 2017]. Napoli, P. M. (2016). Requiem for the Long Tail: Towards a Political Economy of Content Aggregation and Fragmentation. International Journal of Media & Cultural Politics, 12(3), 341–356. Porch, S. (2016). A Year After Launch, Amazon Channels has Grown from Start-up Service to Full-Blown Platform. Decider. [Online]. 16 December 2016. Available at: http://decider.com/2016/12/16/a-year-after-launchamazon-channels-has-grown-from-a-ser vice-to-a-full-blown-platform/ [Accessed 10 June 2017]. PricewaterhouseCoopers. (2014). Global Entertainment and Media Outlook 2015–2019: Filmed Entertainment. Consultancy Research Report. Smith, M. D., and Telang, R. (2016). Streaming, Sharing, Stealing: Big Data and the Future of Entertainment. Cambridge, MA: MIT Press. Smits, R., Higson, A., Mateer, J., Jones, H. and D’Ippolito, B. (2018). Distributing Films Online. Workshop Report. Journal of British Cinema and Television, 15(2), 291–299. Soper, S. (2018). Bezos Says Amazon Has Topped 100 Million Prime Members. Bloomberg. [Online]. 19 April 2018. Available at: https://www.bloomberg. com/news/articles/2018-04-18/amazon-s-bezos-says-company-has-topped100-million-prime-members [Accessed 9 June 2018].

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Spangler, T. (2016). Amazon Prime Video has 4 Times Netflix’s Movie Lineup, But Size Isn’t Everything. Variety. [Online]. 22 April 2016. Available at: http://variety.com/2016/digital/news/netflix-amazon-prime-video-moviestv-comparison-1201759030/ [Accessed 1 March 2017]. Spangler, T. (2017). Vimeo Kills Plans for Subscription-Video service. Variety. [Online]. 26 June 2017. Available at: https://variety.com/2017/digital/ news/vimeo-kills-planned-subscription-video-ser vice-1202478247/ [Accessed 25 September 2017]. Statista. (2016). The Statistics Portal. [Online]. Available at: https://www.statista. com/outlook/201/100/video-on-demand/worldwide# [Accessed 25 March 2016]. Stedman, A. (2015). Epix Movies Are Leaving Netflix, Coming to Hulu. Variety. [Online]. 30 August 2015. Available at: http://variety.com/2015/digital/ news/netflix-epix-deal-expiring-1201581520/ [Accessed 1 March 2017]. Strangelove, M. (2015). Post-TV: Piracy, Cord-Cutting, and the Future of Television. Toronto: University of Toronto Press. Tryon, C. (2013). On-Demand Culture: Digital Delivery and the Future of Movies. New Brunswick: Rutgers University Press. Wasser, F. (2002). Veni, Vidi, Video: The Hollywood Empire and the VCR. Austin: University of Texas Press. Zelenko, M. (2015). Red Dawn: An Inside Look at YouTube’s New Ad-free Subscription Service. The Verge. [Online]. 21 October 2015. Available at: https://www.theverge.com/2015/10/21/9566973/youtube-red-ad-freeoffline-paid-subscription-service [Accessed 6 April 2017].

CHAPTER 8

The Powerful Influence of Netflix and Amazon Studios

8.1   Netflix and Amazon as Fully Integrated Studios I established in Chap. 7 that SVOD platforms such as Netflix and Amazon are the driving force behind the growing popularity of the on-­demand culture. They have attracted tens of millions of subscribers in countries worldwide, offering diverse collections of popular, mainstream films as well as more specialised films for which audiences pay a relatively low subscription fee. I also established that Hollywood films constitute an important part of their collections. In particular, provision of popular, mainstream Hollywood films—premium content—is important to promote their platform and attract subscribers. But their dependency on content from Hollywood studios is also posing a risk. Hollywood studios are also considering to develop  their own VOD platforms, with the likely effect that they monetise their content themselves, and that is deemed to have an impact on Netflix and Amazon. For instance, trade observer Littleton (2018) notes that they might no longer be prepared to license content to Netflix, Amazon and other VOD platforms because they do not want to support their competitors and they want to offer exclusive content to their subscribers. In other words, exclusivity becomes an increasingly important focus.

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Netflix and Amazon have expanded their business operations to respond to that threat and rebranded from VOD platform providers to fully ­integrated studios with production and distribution departments. As a distributor, they have started to acquire distribution rights of  new films at film festivals and sales markets to release on their VOD platforms. As a producer, they have started to become involved as co-producers to films, with the purpose of securing the distribution rights. Their labels ‘Netflix original’ and ‘Prime original’, which are ascribed to the films they develop as a co-producer or acquire as a distributor, are now well known amongst online audiences. Their ‘originals’ are also an integral part of their promotional strategies, particularly if films are shown exclusively on their platform. In analytical terms, the impact of online corporations such as Amazon and Netflix has been associated with the notion of ‘disruption’. Already in 1997, Clayton Christensen introduced concepts such as ‘disruptive technologies’ and ‘disruptive innovation’ in an effort to understand how digital technologies were gradually replacing existing technologies and businesses (Christensen 1997). While these concepts have been consistently employed in macro-economic studies, the term ‘digital disruption’ is more commonly employed in Film and Media Studies. The term was initially associated with the revolutionary impact of Amazon in the publishing industry, iTunes in the music industry and Netflix in the film industry in the late 2000s. With Amazon and iTunes diversifying to film and other fields of cultural activity, along with other multi-national corporations such as Microsoft and Google, digital disruption gained even more significance. For instance, the edited collection Digital Disruption: Cinema Moves On-line (Iordanova and Cunningham 2012) revolves around this term. One of the contributors, Michael Franklin (2012: 102), describes digital disruption as the process whereby companies employ new digital technologies and business models that impact on value creation processes and conventional business procedures. In studies about the film industry, it is often used to describe the impact of online corporations like Netflix and Amazon, particularly to analyse how their business procedures and arrangements for films compare with more conventional operations of Hollywood studios. For instance, discussions focus on release strategies developed by them for films. If films are made available exclusively to online audiences, that disrupts the business of the companies that are part of the traditional film industry, including distributors, cinema exhibitors, DVD and Blu-ray retailers and others who conventionally participate in the process of delivering films to audiences.

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Such disruptive operations are also understood in relation to the concept of dis-intermediation. Iordanova (2012) and Hirsch and Gruber (2015), for instance, employ this concept to describe the process by which the traditional role of gatekeepers and other intermediary organisations is undermined and even cut out of the relationship between producers and VOD platforms. In terms of distribution, dis-intermediation processes have an impact on the role of sales agents and distributors if they are cut out of the process to enable direct relationships between producers and exhibitors. Such dis-intermediation arrangements have remained rare despite the rapid development of VOD platforms. However, in terms of exhibition, it has become more common for films to be exclusively released online, with the effect that cinema exhibitors are cut out of the exhibition process. That has resulted in fierce discussions amongst companies in the exhibition sector. In particular, cinema exhibitors have argued that such strategies have an negative impact on the medium of cinema in the long term. The purpose of this chapter is to analyse the business operations of Netflix and Amazon as fully integrated studios in order to make sense of their distribution and exhibition strategies. I will draw comparisons between the strategies of Netflix and Amazon and analyse how they associate with the concepts of digital disruption and dis-intermediation. While Amazon is committed to conventional ways of organising distribution and exhibition, I will demonstrate that strategies developed by Netflix are closely aligned with the narratives of disruption and dis-intermediation. Given their powerful impact as online corporations, I will also draw parallels between their business structures and the conventional operations of the Hollywood studios.

8.2   Netflix: Production, Distribution and Release Strategies Studies by McDonald and Smith-Rowsey (2016) and Lobato (2019) have analysed the early development of Netflix and its impact on audiences in countries worldwide. Netflix originally started in 1997 as an online DVD retail company in the US market. They introduced a subscription-only rental model in 1999 and gradually provided access to a (physical) collection of 70,000 films and television series in 2007. Having established a well-known brand in the US market, they developed an SVOD platform in 2007. Their subscribers were given complimentary

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access to a collection of 1000 films and television series on that SVOD platform, as ­journalist Helft (2007) notes. Subscriber numbers in the US market subsequently increased from 7.5 million in December 2007 to 14 million in March 2010 (Netflix 2008, 2010). They reorganised their business model in 2010 by separating the SVOD offer from their physical disc offer. Journalists Arango and Carr (2010) note that Netflix invested heavily in their SVOD offer, making two important changes to attract new audiences. First, the monthly subscription price was brought down from $19.99 to $7.99, while subscribers were also given unlimited access to films rather than having to commit to a maximum number of rentals at any one time. Second, Netflix decided in 2014 to expand internationally, introducing the SVOD platform in the UK, Latin America, Canada, Scandinavia, France, Germany and the Benelux countries. Journalist O’Toole (2014) argues that the SVOD platform was successful, reaching 36 million subscribers in the US market and another 14 million subscribers in international markets in July 2014. The period between 2010 and 2014 also marked the beginning of a new phase in which Netflix rebranded from an exhibition platform and retail business to a fully integrated studio corporation with production and distribution departments to invest in their own content, Netflix originals (McDonald and Smith-Rowsey 2016: 4). Netflix started to invest in television series, such as big-budget dramas like House of Cards (2013) and Orange is the New Black (2013), as well as in film productions, particularly documentaries. As a distributor, they were prepared to pay substantial fees for the distribution rights of films. Trade observer McNary (2015), for instance, notes that the production budget of Beasts of No Nation was just $6 million, but Netflix acquired worldwide distribution rights for $12 million. Even though Netflix was not involved as a co-producer with the development and production of this film, they rebranded it as a ‘Netflix originals’ production. This is a strategy they also developed for medium-­budget dramas such as The Siege of Jadotville (2016) and Sand Castle (2017), and for various low-budget films. In acquiring the worldwide distribution rights to those films, they were able to exercise control over the release strategy in international markets. They normally prioritise a worldwide SVOD release exclusively on their platform for such films in order to support their business model, rather than organising a conventional strategy with a theatrical release in cinemas

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before they are introduced online. But if films have the potential to be nominated for prestigious award competitions, they may be released on their SVOD platform in combination with a modest theatrical release (often in the US market only) to be able to qualify for these competitions. For instance, they developed a day-and-date release strategy in cinemas and online in the US market for Beasts of No Nation and The Siege of Jadotville. They also invested in ‘Netflix originals’ as a co-producer. For instance, trade observer McClintock (2015) notes that Netflix became involved with the $60 million comedy War Machine (2017) because the initiators of the film—Brad Pitt and the Australian director David Michod—were unable to reach a financing agreement with other production companies. Netflix’s involvement as financier and co-producer provided the means for them to exert greater creative control over the production process, while they also obtained the distribution rights to release the film exclusively on their VOD platform. Netflix assigns the label ‘Netflix originals’ to films for which they acquire worldwide distribution rights as a financier, co-producer or distributor. Table 8.1 demonstrates that Netflix started with just two films by the end of 2015, but another 22 films were released in 2016. That number of Netflix originals increased further to 25  in 2017. Industry observers Cobb (2017) and McAlone (2017) noted in April 2017 that Netflix was investing in more originals to be released in 2018 and 2019. Cobb (2017) observed that big-budget productions became a more important part of their business: in addition to War Machine, they prepared the $50 million film Okja, the $40 million Death Note and the $90 million Bright for a release in 2017. In terms of growth and availability, Netflix had branched out to 190 countries worldwide by January 2016 (Netflix 2016). Trade analysts Weber (2017) and Spangler (2018) note that their worldwide subscriber numbers increased from 50 million in July 2014 to more than 118 million by the end of 2017. The prospect of continuing growth has encouraged Netflix to continue its investment in originals, with the budget for films and television series growing to $6 billion in 2017. Chief of Content at Netflix, Ted Sarandos, announced in September 2016 that their target for the next few years would be to ensure that 50% of film and television content on Netflix are originals, as noted by trade observer Spangler (2016c).

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Table 8.1  A self-compiled list of Netflix original feature films ordered by date of release, October 2015–December 2016 Film

Release date worldwide

Genre

Beast of No Nation The Ridiculous 6 Crouching Tiger, Hidden Dragon: Sword of Destiny 4. Pee-wee’s Big Holiday 5. Special Correspondents 6. The Do-Over 7. The Fundamentals of Caring 8. Brahman Naman 9. Rebirth 10. Tallulah 11. XOXO 12. The Little Prince

October 2015 December 2015 February 2016

Drama, war Comedy, western Action, adventure

March 2016 April 2016 May 2016 June 2016 July 2016 July 2016 July 2016 August 2016 August 2016

13. 14. 15. 16.

September 2016 October 2016 October 2016 October 2016

Adventure, comedy Comedy Action, adventure Comedy, drama Comedy Thriller Comedy, drama Drama, music Animation, adventure Sci-fi, thriller Comedy Action, drama Thriller

October 2016 November 2016 November 2016 November 2016 November 2016 December 2016 December 2016 December 2016

Drama Action, comedy Drama, mystery Action, adventure Crime, drama Action, mystery Biography, drama Drama

1. 2. 3.

17. 18. 19. 20. 21. 22. 23. 24.

ARQ Mascots The Siege of Jadotville I Am the Pretty Thing That Lives in the House 7 Años True Memoirs of an International Assassin Mercy Skiptrace Divines Spectral Barry Sand Storm

Note: Documentaries are excluded from this list

8.3   Amazon Studios: Production, Distribution and Release Strategies Amazon is also an early adopter in the VOD business. They started as an online retail company in the US market in 2006, providing access to large DVD and Blu-ray catalogues, as well as to large transactional VOD catalogues. Their VOD catalogue was initially accessible through their service Amazon Unbox, which was rebranded as Amazon Video on Demand in

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2008 and as Amazon Instant Video in 2011. In addition to their TVOD catalogue of tens of thousands of films and television series, they launched the subscription service ‘Amazon Prime’ in 2011. It initially provided access to 5000 films and television series, as well as a complimentary free two-day delivery on physical products ordered on the Amazon website (Amazon 2011). Industry observers argued that their Prime subscription offer was a direct response to the growing popularity of Netflix. Amazon further developed the Prime subscription offer in the years that followed. According to trade observer Spangler (2016a), subscribers were able to gain access to 18,000 films in the US in 2016. It is also important to note that the Amazon TVOD and SVOD offers were launched in markets outside the US. It was launched in the UK, Germany and Austria in 2014, followed by Japan in 2015, and by more than 200 countries by the end of 2016. As with Netflix, they started to invest in ‘originals’ to promote their SVOD offer. Trade observer Spangler (2014) notes that they initially invested in television series, for which they asked Prime members to help with the commissioning process. Prime members were invited to watch a selection of 14 pilot episodes of series in April 2013, and another selection of 10 pilots in February 2014. Based on their feedback, Amazon commissioned full seasons of series such as Alpha House (2014), Bosch (2014) and Transparent (2014). Having developed these television series, they announced in January 2015 that they expanded to film production. They appointed Ted Hope, one of the leading voices for independent filmmakers, to lead their film and television production department Amazon Studios. This was a strategic choice that underlined Amazon’s future intentions. Trade observer O’Falt (2017) notes that Hope is a long-time advocate of low-budget, independent cinema. He launched the US production company Good Machine together with his partner James Schamus in the 1990s. Through Good Machine, they invested in the careers of filmmakers such as Ang Lee, Todd Haynes and Todd Solondz, and they produced several low-­ budget films that became commercial breakout successes. Their successful company was sold to Universal Pictures in 2002, who established their own specialty division, which became Focus Features. Hope subsequently co-founded  the production company This Is That in 2002, where the focus remained on investing in original content and working with low-­ budget, independent filmmakers. He also raised attention for independent filmmakers through a series of short articles in which he informed about

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new business models and online VOD platforms. In 2012, he became the Director of the San Francisco Film Society, for which he developed the direct distribution programme ‘Artist to Entrepreneur’, as trade observer Willmore (2013) notes. This programme was specifically aimed at independent filmmakers who were experimenting with new forms of distribution. He also worked for the US-based specialised SVOD platform Fandor, where he was Managing Director in 2014. It is precisely this legacy and approach to filmmaking that Hope has developed further with Amazon Studios. O’Falt (2017) notes that an important part of their production and branding strategy involved developing relationships with indie filmmakers who became important in the 1990s, including Spike Lee, Jim Jarmusch and Todd Haynes. Spike Lee’s Chi-Raq (2015), for instance, became the first ‘Prime original’ that they acquired as a distributor. They released the film in US cinemas just two months after Netflix released its first ‘original’ film Beasts of No Nation in US cinemas. Other Amazon originals included Jim Jarmusch’s Paterson (2016) and Todd Haynes’ Wonderstruck (2017), with Amazon being involved as both co-producer and distributor. Like Netflix, they were prepared to pay substantial fees for the distribution rights of films. Trade reporters McClintock (2017) and Kay (2016) note that they acquired highly-anticipated films. They paid $15 million for the US distribution rights of Woody Allen’s Café Society (2016), and $10 million for Kenneth Lonergan’s Manchester by the Sea (2016). In addition, they acquired smaller festival films such as Nicolas Winding Refn’s The Neon Demon (2016) and Chan-wook Park’s The Handmaiden (2016). Amazon’s vision and focus on independent films has been carefully promoted at film festivals. They made a huge splash at the 2016 Cannes Film Festival with five films showing in various competition programmes. Unlike Netflix, they emphasise that they work together with distributors to give their films a release in cinemas before they are introduced on their SVOD platform (Fleming 2016). It is also worth noting that they operate as a distributor in the US market  only. For instance, in the case of Manchester by the Sea, they acquired the distribution rights for the US market from the US sales agent Sierra/Affinity, while other distributors acquired the rights for other international markets, as trade reporter Tartaglione (2016) notes. By contrast, Netflix usually acquires distribution rights to release films globally.

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Amazon has never been secretive about their ambition to work with the independent film business and their willingness to commit to conventional release strategies. In this way, their strategies go against close comparisons that put them on a par with Netflix. Jason Ropell, Head of Films at Amazon, reflects on the difficulties they experienced while introducing their business strategies initially: Messaging around our model was a challenge initially. When people thought of Amazon, they immediately expected that ours would be a direct-to-­ platform play and that if you were going to do business with us, that’s where your film would end up [as with Netflix]. That was not the intention, so it took time for that to really sink in. It’s clearly sunk in now because we’ve been so fortunate with films like Manchester [By the Sea] and Love & Friendship, where it’s clear, “Oh, they’re going to release movies in theaters, that’s what they’re about, and then those movies eventually go to Prime, now I get it”. (Quoted in Ford 2017) The elements of success we’ve seen this year were audiences really connecting with our films, critics connecting with our films, being recognized by respected bodies. All of that—you want to build on that success and have more of it. That’s what I want to see in the future. I see this as the beginnings of a studio, so I can’t really think of a better way or a better foundation to have laid for the building of the studio within the past year. (quoted in Ford 2017)

Ropell places emphasis on conventional release strategies for films. Rather than developing straight-to-VOD releases, he notes that Amazon remains committed to staggered releasing, starting with a theatrical cinema release. He further notes that recent acquisitions such as Manchester by the Sea and Love & Friendship are proving that Amazon is increasingly operating as an integrated studio, even though they do not operate with an in-house network of distribution offices worldwide. In terms of Amazon’s slate of films, Table 8.2 demonstrates that Chi-­ Raq was the only film they released in 2015, with another 12 films following in 2016. The Director of Amazon Studios, Roy Price (2016), notes that their commitment to films is reliant on the quality of films in the marketplace, and there are no specific quantitative targets in terms of the volume of film releases. Their decision-making is driven by their confidence in films, and they take an open approach with regard to their involvement in specific stages of the production process:

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Table 8.2  A self-compiled list of Amazon original feature films ordered by date of release, December 2015–December 2016

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Film

Release date worldwide

Genre

Chi-Raq Creative Control Elvis & Nixon Love & Friendship The Neon Demon Wiener-Dog Café Society Complete Unknown The Dressmaker An American Girl Story—Melody 1963: Love Has to Win The Handmaiden Manchester by the Sea Paterson

December 2015 March 2016 April 2016 May 2016 June 2016 June 2016 July 2016 August 2016 September 2016 October 2016

Comedy, crime Drama, sci-fi Comedy, history Comedy, drama Horror, thriller Comedy, drama Comedy, drama Drama, mystery Comedy, drama Family

October 2016 November 2016 December 2016

Drama, mystery Drama Comedy, drama

Note: Documentaries are excluded from this list

We’re definitely developing IP [intellectual property] and scripts. So we’re definitely developing from zero as we also acquire finished films, and everything in between. Our only priority is to get the best, most interesting, most creative films. We can be open-minded about everything else. (Quoted in Fleming 2016)

Price underscores that Amazon’s approach to film production and distribution is flexible: while they usually acquire film rights as a distributor, they are occasionally prepared to commit from an early stage of development as a producer and distributor. Central to their commitment is their assessment of content. Ropell reinforces this point about the importance of quality to their decision-making. He sees a role for Amazon in supporting small or medium budget films with the potential to break out to mainstream audiences. Manchester by the Sea, for instance, generated more than $47 million from the US cinema market (Box Office Mojo 2017). Because Hollywood studios increasingly focus on a small number of massive-­ budget ‘tentpole’ films, there are opportunities for other companies: There’s this polarization between tentpole blockbuster studio franchises based on pre-existing IP and then much, much smaller microbudget or very

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independent fare. The in-between films are the ones getting squeezed out, but there’s an appetite for them. In order for a film to perform as Manchester [by the Sea] is performing, you need to reach secondary markets, you need to get out to parts of the country that you might not necessarily think would be interested in an independent film. (Quoted in Ford 2017)

As Ropell demonstrates, Amazon is thus particularly keen to invest in mid-­ range or crossover films. It is precisely such critically acclaimed films with important cultural as well as commercial values that allow Amazon to build up their brand. Industry analysts have responded with mixed views to Amazon’s film operations. They see Amazon Studio as a company that protects the interest of filmmakers by investing in low-budget and medium budget films, but they are concerned about the fact that they are part of a multi-national company with broader commercial incentives, and therefore question their commitment to independent film in the long term. As trade journalists O’Falt (2017) and Bart (2017) put it: While it’s hard to imagine the economic model for Amazon’s original movie strategy is a profitable one in terms of box office and other forms of revenue, Hope and his team have brought prestige and a brand of quality to the streaming giant, which might at this conjuncture [sic] may prove to be more valuable to the rapidly expanding company than the bottom line. (O’Falt 2017) Though Amazon is a giant company with resources to outmatch the majors, Amazon’s movie slate remains a bastion of specialty films aimed at adult filmgoers. Competitors respect the company as a serious player, but are skeptical about its long-term strategy. (Bart 2017)

O’Falt and Bart understand Amazon’s film operations as a means of brand building to support their physical retail business. They point to Amazon’s ability to prioritise creative decisions over commercial decisions about films, which is a luxury that companies normally do not have. They imply that their film department operates with the purpose of adding important promotional values to the overall branding of Amazon. Their Prime offer, which connects their digital entertainment business with their physical retail business, is part of their broader corporate business strategy.

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8.4   Digital Disruption and Dis-intermediation? The terms digital disruption and dis-intermediation are easily associated with the studio operations of Netflix and Amazon, but are such associations correct? As noted in the previous section, Amazon has stated that they are willing to collaborate with the independent film business and that they are committed to traditional film releasing. To that end, it makes sense to argue that they are simply another player in the marketplace rather than a disruptor. Amazon director Roy Price explains that they usually demand exclusivity in the SVOD window only, which comes after the theatrical run: Having the film be a theatrical success is good for the filmmakers, and it’s desired by them. I think it’s good for the customers because they get an opportunity to see it in theaters today, and the film is treated like a real film. It feels like a real movie. At the end of the day, it kind of works for everybody that we support a theatrical release. So really, as you observe these films going in the market and going between windows, it won’t be unfamiliar to you. It’s just that instead of the normal Pay One carrier [i.e. pay TV], it will be on Amazon. (Quoted in Fleming 2016)

Price confirms that they are prepared to release films first in cinemas, and then in the home video market. They usually work with other distributors in the US to release their films in cinemas and on DVD and Blu-­ ray, which allows them to exert control over the release of their films without having to invest in a distribution office. Price compares the SVOD window on Amazon Prime with the pay TV window, which is usually the second or third release window. In the same article, Price also notes that they usually commit to the standard 12-week theatrical release window for films in US cinemas. Examples of films released by Amazon in the US market, such as Manchester by the Sea (2016) and The Neon Demon (2016), substantiate that Amazon has prioritised a (substantial) release in cinemas over a release directly on their SVOD platform.  Amazon partnered with Roadside Attractions to release Manchester by the Sea. They developed a platform release on just four screens in the first week, which then gradually expanded to 366 screens in the fourth week and more than 1200 screens in the fifth week. The film won two prizes at the Oscars and became a huge commercial success, grossing $45 million at the US box office after 12 weeks (Box

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Office Mojo 2017). Because of this success, it continued to play in cinemas while at the same time being released in the home video market in DVD or Blu-ray format and for TVOD viewing. Further, it became available on Amazon Prime only eight weeks after the initial release in the video market (i.e. 20 weeks after the theatrical cinema release). Hollywood studios and traditional distributors dealing with high-profile films commonly employ similar strategies, with films being available exclusively in cinemas, on DVD and Blu-ray, and on TVOD before they become available on SVOD. For the release of The Neon Demon in the US market, Amazon partnered with the specialised distributor Broad Green Pictures. The film opened immediately on close to 800 screens, but this number fell back to less than 200 screens in the second release week and to only 16 screens in the third release week (Box Office Mojo 2017). The film was released in the home video market after a long theatrical holdback enforced by the 12-week window restriction, while becoming available on Amazon Prime only eight weeks thereafter. The strategy, with a long wait across several release windows, was thus similar to Manchester by the Sea. These two releases by Amazon in the US market confirm that they commit to traditional releasing patterns and work with distributors to organise the theatrical cinema and home video releases. On the other hand, Price is wary of the fact that competition amongst films in the theatrical cinema market is fierce, and notes that some films  might benefit from a different release strategy: We want to work with exhibition and it has to be a win-win for everybody. We think that’s a fair trade-off that works with our model. The principle of the whole thing is let’s do what’s great for our customers, and if we get the film widely distributed so that a lot of customers have the opportunity to see it in the movie theater, then that’s great. There may be changes from time to time where we’re not really doing that, on a smaller picture that may come out on 30 screens. In that case, probably the best thing from a customer point of view and even for the filmmaker, in terms of the economic model, might be to have a shorter window. But that would be the exception and not the rule. (Quoted in Fleming 2016)

Price underscores that Amazon may prioritise a shorter release window in cinemas for some selected films if it is expected that cinemas pull them off their screens early, typically after a few weeks. That means that those

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films would not benefit from the 12-week window in US cinemas that is normally required before they are released on DVD, Blu-ray and online. In order to organise a shorter theatrical window, they need to secure a US distributor who develops relationships with cinema exhibitors that are prepared to show films for a shorter period of time. For instance, Amazon partnered with the specialised distributor Roadside Attractions and the studio Lionsgate to release Chi-Raq modestly in the US market: it opened in close to 300 cinemas in the first two release weeks, but that number dropped quickly to 76 in the third week and only 20 in the fourth week (Box Office Mojo 2017). The film became available in the home video market (DVD, Blu-ray and TVOD) after seven weeks, followed by a release on their SVOD platform one week later. It was thus released in cinemas before opening to other release windows, yet the theatrical release window was shorter than is usually required. In acquiring all distribution rights for the US market, Amazon is able to control release strategies across different windows to ensure that films eventually become available on their SVOD platform. In other words, rather than performing the role of a digital disruptor, they perform the role of a relatively traditional all-rights distributor—for which they rely on the help of other distributors to organise the cinema and home video releases, while organising the SVOD release themselves. In addition, their distribution and exhibition operations deny any association with the notion of dis-intermediation. On the contrary, because they have established distribution partnerships with other distributors to organise the distribution of their films as effectively as possible, the analysis demonstrates that  more—not less—distribution arrangements are needed to secure access to both physical and online markets. The operations of Netflix, on the other hand, are much more closely related to the processes of digital disruption and dis-intermediation, since they usually release films on the same day in cinemas and online, or they circumvent the cinema window and the DVD and Blu-ray window completely and release films exclusively on their SVOD platform. If they circumvent the cinema and DVD and Blu-ray windows, that means that cinemas and DVD and Blu-ray retailers are cut out of the exhibition process, as described by the term dis-intermediation. But even if they organise a limited release in cinemas in order to qualify their films for the awards season, that means that a great number of cinemas are still cut out of the process. For instance, Beasts of No Nation enjoyed a worldwide online release on Netflix in combination with a modest theatrical release in the

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US and UK. The US cinema release was organised only to ensure that the film would qualify for the awards season and the UK cinema release for the BAFTA awards, with the film showing in 30 US cinemas and 15 UK cinemas, as noted by trade reporter Child (2015). Crouching Tiger, Hidden Dragon: Sword of Destiny also enjoyed a worldwide online release, this time in combination with a theatrical cinema release in 15 IMAX cinemas in the US. The Siege of Jadotville was also released on Netflix in combination with a modest theatrical cinema release in 15 US cinemas. It is also worth noting that none of these films were released on DVD and Blu-ray by a distributor in the US, with the effect that they became accessible only on their own platform after the theatrical release. Cinema exhibitors have responded critically to such day-and-date releases by Netflix, particularly with regard to films competing for festival prizes and awards. Beasts of No Nation impressed many critics at international festivals such as Venice, Telluride, Toronto and London, and would have been an attractive proposition to international distributors and cinema exhibitors. However, Netflix developed a day-and-date strategy in the US and the UK to qualify the film for the awards season, as a box-ticking exercise rather than with the intention of exploiting its commercial potential in cinemas. In that respect, it is worth mentioning that Crouching Tiger, Hidden Dragon: Sword of Destiny performed very well in the Chinese market. Because China is one of the few countries in which Netflix has not yet been introduced, the Chinese distributor The China Film Group was able to develop its own release strategy. It was given a wide theatrical cinema release, with the film generating more than $20 million after the opening weekend, as trade observer McClintock (2016) notes. The impressive performance of this film in Chinese cinemas demonstrates how disruptive strategies developed by Netflix could undermine the commercial potential of films in cinemas. Day-and-date strategies, on the other hand, by definition reduce the commercial potential of films in cinemas because the biggest cinema chains have formed a pact with each other and refuse to show films for which such strategies are developed. For instance, in the US, major cinema chains such as AMC, Regal, Cinemark and Carmike refused to show Beasts of No Nation in their cinemas, as noted by trade reporter Lang (2015). Those cinema chains argue that they will be missing out on box-office revenue if films are available online at the same time, with the online window disrupting their business. The underlying logic of this assumed cannibalisation effect is that on-demand viewing provides a cheaper and more

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flexible alternative to cinema viewing, which poses immediate threats to cinema exhibitors. It is thus in the interests of cinema exhibitors, and particularly the biggest chains, to preserve existing windowing regulations for as long as possible. Interestingly,  the fact that the biggest cinema chains refused to show such films has provided opportunities for some smaller specialised cinema chains and stand-alone exhibitors, who were keen to work with Netflix. For instance, trade reporter Spangler (2016b) noted in 2016 that Netflix negotiated a deal with the US cinema chain iPic to release a slate of ten new Netflix films in their cinemas. Because the theatrical release of a Netflix film in the US market is often limited to between 10 and 30 cinemas, they usually work directly with a cinema chain instead of a distributor. Given that Netflix develops day-and-date release strategies for selected films, and that such release strategies are usually developed for the US and UK markets, it is clear that priority is given to their SVOD platform. For this reason, industry observers have introduced the term ‘straight-to-­ Netflix’. The term suggests a comparison with the pejorative label ‘straightto-­video’, whereby certain films are released directly in the home video market rather than in cinemas first, which has traditionally been interpreted as a mark for poor quality films. The term straight-to-Netflix, however, does not match with such a description because the immediate SVOD release can no longer be seen as an indicator of poor quality. On the contrary, some of the  straight-to-Netflix releases were amongst the most acclaimed films at festivals like Sundance, Toronto and Cannes. Given Netflix’s objective to exploit the potential of their SVOD platform rather than the theatrical cinema market, some trade observers have condemned the straight-to-Netflix strategy. They argue that films should be accessible to film audiences beyond Netflix. As trade reporter Ehrlich (2017) puts it: “Netflix keeps buying great movies, so it’s a shame they’re getting buried.” He specifically mentions Tramps (2017), a film he enjoyed watching at the Toronto Film Festival but which was made available exclusively on Netflix. He notes that the straight-to-Netflix strategy impacts on the viewing experience of audiences and the public perception of such Netflix originals. In addition to the ‘straight-to-Netflix’ label, such films have also been compared to the equally pejorative ‘TV movies’ label in industry discussions. Ehrlich takes this comparison further, arguing that Netflix originals are ‘laptop movies’ and ‘iPhone movies’: The problem isn’t that Netflix Originals are TV movies, the problem is that—more often than not—they’re laptop movies, or iPhone movies, or

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watch-out-of-one-eye-while-checking-Twitter movies. And while that may be the ultimate fate of all video content in this day and age, Netflix Originals never get the chance to be anything more.

Because films like Trumps are only available on Netflix, the viewing experience of audiences veers further away from a traditional cinema experience. Ehrlich thus effectively argues that the direct-to-Netflix strategy is not only disruptive to the film business, but to the medium of film in the long term. In this view, the development of the on-demand culture, and inherently the convenience of mobile access via laptops and smartphones, undermines the film experience of audiences. The commercial interests of the Netflix platform are given priority regardless of the quality of films as cultural commodities, but also regardless of the viewing experience. Straight-to-Netflix strategies also have an impact on filmmakers. While the promotional campaign of Netflix originals is organised through film festivals and award ceremonies to introduce them to international audiences, they are unable to generate additional exposure from a conventional cinema release. On the other hand, Netflix develops marketing campaigns for such films in local, national markets in order to draw attention to the Netflix platform. Making those films directly available on Netflix also means that they can be watched by tens of millions of subscribers (118 million in December 2017). In particular, for films with limited potential to build up a profile in cinemas, a release on Netflix helps to increase access to audiences. Industry commentators are not convinced that Netflix can sustain their disruptive model in the near future. They expect that other VOD platforms will become more competitive in terms of attracting creative talent, as Russell Levine of the US production company Route One Entertainment puts it: Netflix wants to be able to work with all the [creative] talent, and all the talent is not going to settle for the [online-only] Netflix paradigm. They’ll have to have an alternative model, like Amazon’s. Eventually, Netflix will do the same. (Quoted in Ford and Roxborough 2017)

Levine notes that creative talents are likely to prioritise deals in the future with VOD platforms that continue to show films in cinemas. Similarly, Efe Cakarel, the Managing Director of the specialised SVOD platform Mubi, foresees that the Netflix model is unlikely to be sustainable

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in the future because the theatrical release is critical to establishing a reputation for filmmakers. The 90-day theatrical window [in the US market] is very important to the producers and the filmmakers, that’s how they build their reputation and how they get the attention. If both Amazon and Netflix pay $10 million, you will choose Amazon because they will guarantee you a theatrical release. (Quoted in Ford and Roxborough 2017)

Levine and Cakarel are thus pessimistic about the potential of straight-­ to-­Netflix strategies because it does not support the careers of creative talent in the same way as traditional releasing. In line with Ehrlich’s views, they argue that Netflix needs to show a genuine interest in films by recognising the cultural impact of the theatrical cinema release. This becomes even more pertinent if competition  becomes more fierce for attractive propositions in the marketplace. In order to continue to engage with such projects, Netflix needs to make compromises and accept the catalyst function of theatrical cinemas at the centre of film exhibition. It is thus implied that the long-standing tradition of theatrical cinema exhibition might undermine their role as digital disruptor in the future.

References Amazon. (2011). Amazon Prime Members Now Get Unlimited, Commercial-­free, Instant Streaming of More Than 5,000 Movies and TV Shows at No Additional Cost. 22 February 2011. Amazon Press Center. [Online]. Available at: http:// phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID= 1531234 [Accessed 17 January 2016]. Arango, T. and Carr, D. (2010). Netflix’s Move Onto the Web Stirs Rivalries. The New  York Times. [Online]. 24 November 2010. Available at: http://www. nytimes.com/2010/11/25/business/25netflix.html?pagewanted=all [Accessed 6 February 2017]. Bart, P. (2017). Peter Bart: Amazon Raises Bet on Movie Business, But Rivals Still Baffled about Long-term Strategy. Deadline. [Online]. 10 March 2017. Available at: http://deadline.com/2017/03/amazon-studios-movie-business-plan-the-big-sick-manchester-by-the-sea-1202041140/ [Accessed 27 April 2017]. Box Office Mojo. (2017). A Global Box-office Film Database. [Online]. Available at: http://www.boxofficemojo.com/.

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Child, B. (2015). Netflix Drama Beasts of No Nation to Hit UK Cinema Before Reaching Subscribers. The Guardian. [Online]. 21 September 2015. Available at: https://www.theguardian.com/film/2015/sep/21/netflix-beasts-of-nonation-uk-cinemas-subscribers-idris-elba-cary-fukunaga [Accessed 27 April 2017]. Christensen, C. (1997). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business Review Press. Cobb, K. (2017). Netflix Is Spending a Ton of Money on Original Movies. Decider. [Online]. 12 April 2017. Available at: http://decider. com/2017/04/12/netflix-film-spending-2017/ [Accessed 26 April 2017]. Ehrlich, D. (2017). Netflix Keeps Buying Great Movies, So It’s a Shame They’re Getting Buried. IndieWire. [Online]. 17 April 2017. Available at: http://www. i n d i e w i r e . c o m / 2 0 1 7 / 0 4 / n e t f l i x - b a d - f o r- m o v i e s - t h e a t e r s - o k j a tramps-1201806272/ [Accessed 4 May 2017]. Fleming, M. (2016). Deadline Disruptors: Amazon Studio’s Roy Price Comes to Cannes with Momentum of Five Films Playing the Festival. Deadline. [Online]. 13 May 2016. Available at: http://deadline.com/2016/05/amazon-studiosroy-price-cannes-manchester-by-the-sea-cafe-society-interview-1201751982/ [Accessed 29 April 2017]. Ford, R. (2017). Amazon’s Film Chief on Sundance Buying Plans, Rival Netflix and Apple’s Possible Movie Play. The Hollywood Reporter. [Online]. 19 January 2017. Available at: http://www.hollywoodreporter.com/news/amazon-studios-boss-sundance-buying-plans-netflix-apple-rivals-964822 [Accessed 29 April 2017]. Ford, R. and Roxborough, S. (2017). Berlin: Netflix and Amazon Evolve from Industry Disrupters to Market Darlings. The Guardian. [Online]. 23 April 2017. Available at: http://www.hollywoodreporter.com/news/berlin2017-netflix-amazon-evolve-industry-disruptors-market-darlings-974621 [Accessed 6 June 2017]. Franklin, M. (2012). Internet-Enabled Dissemination: Managing Uncertainty in the Film Value Chain. In D.  Iordanova and S.  Cunningham (Eds.), Digital Disruption: Cinema Moves On-line. St. Andrews: St. Andrews Film Studies, pp. 101–116. Helft, M. (2007). Netflix to Deliver Movies to the PC. The New  York Times. [Online]. 16 January 2007. Available at: http://www.nytimes.com/ 2007/01/16/technology/16netflix.html [Accessed 6 February 2017]. Hirsch, P. and Gruber, D. (2015). Digitizing Fads and Fashions: Disintermediation and Glocalized Markets in Creative Industries. In C. Jones, M. Lorenzen and J. Sapsed (Eds.), The Oxford Handbook of Creative Industries. Oxford: Oxford University Press, pp. 421–435. Iordanova, D. (2012). Digital Disruption: Technological Innovation and Global Film Circulation. In D.  Iordanova and S.  Cunningham (Eds.), Digital

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Disruption: Cinema Moves On-line. St. Andrews: St. Andrews Film Studies, pp. 1–33. Iordanova, D. and Cunningham, S. (Eds.). (2012). Digital Disruption: Cinema Moves On-line. St. Andrews: St. Andrews Film Studies. Kay, J. (2016). Sundance: Amazon Strikes $10m Deal for ‘Manchester By The Sea’. Screen International. [Online]. 24 January 2016. Available at: http:// www.screendaily.com/festivals/sundance/sundance-news/sundance-amazonstrikes-10m-deal-for-manchester-by-the-sea/5099247.article [Accessed 15 February 2017]. Lang, B. (2015). Major Theater Chains to Boycott Netflix’s ‘Beasts of No Nation’. Variety. [Online]. 3 March 2015. Available at: http://variety.com/2015/ film/news/major-theater-chains-to-boycott-netflixs-beasts-of-nonation-1201445636/ [Accessed 26 February 2017]. Littleton, C. (2018). How Hollywood Is Racing to Catch Up With Netflix. Variety. [Online]. August 2018. Available at: https://variety.com/2018/digital/features/media-streaming-ser vices-netflix-disney-comcastatt-1202910463/ [Accessed 19 October 2018]. Lobato, R. (2019). Netflix Nations: The Geography of Digital Distribution. New York: New York University Press. McAlone, N. (2017). Here Are All the Confirmed Original Shows Coming to Netflix in 2017. Business Insider. [Online]. 5 April 2017. Available at: http:// uk.businessinsider.com/netflix-original-shows-in-2017-full-list-2017-4 [Accessed 26 April 2017]. McClintock, P. (2015) Whoa: Netflix Actually Paid $60M for Brad Pitt’s Politically Charged Military Satire. The Hollywood Reporter. [Online]. 17 June 2015. Available at: http://www.hollywoodreporter.com/news/crouching-tiger-hidden-dragon-sequel-867166 [Accessed 17 May 2017]. McClintock, P. (2016) ‘Crouching Tiger, Hidden Dragon’ Sequel to Play in 15 or Fewer Imax Theaters in U.S. The Hollywood Reporter. [Online]. 12 February 2016. Available at: http://www.hollywoodreporter.com/news/crouchingtiger-hidden-dragon-sequel-867166 [Accessed 27 April 2017]. McClintock, P. (2017). Box Office: Woody Allen’s ‘Cafe Society’ Feast on Record 2016 Specialty Opening. The Hollywood Reporter. [Online]. 17 July 2016. Available at: http://www.hollywoodreporter.com/news/box-office-woodyallens-cafe-911808 [Accessed 13 April 2017]. McDonald, K. and Smith-Rowsey, D. (2016). Introduction. In: K. McDonald and D. Smith-Rowsey (Eds.), The Netflix Effect: Technology and Entertainment in the 21st Century. New York: Bloomsbury Academic, pp. 1–13. McNary, D. (2015). Netflix Makes Another Bigscreen Splash with ‘Beasts of No Nation’. Variety. [Online]. 2 March 2015. Available at: http://variety. com/2015/film/news/netflix-makes-another-bigscreen-splash-with-beastsof-no-nation-1201444716/ [Accessed 26 February 2017].

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Netflix. (2008). Netflix Announces Q4 2007 Financial Results. 23 January 2008. Netflix Media Center Blog. [Online]. Available at: https://media.netflix.com/ en/press-releases/netflix-announces-q4-2007-financial-results-migration-1 [Accessed 28 April 2017]. Netflix. (2010). Netflix Announces Q1 2010 Financial Results. 21 April 2010. Netflix Media Center Blog. [Online]. Available at: https://media.netflix.com/ en/press-releases/netflix-announces-q1-2010-financial-results-migration-1 [Accessed 28 April 2017]. Netflix. (2016). Netflix is Now Available Around the World. 6 January 2016. Netflix Media Center Blog. [Online]. Available at: https://media.netflix.com/ en/press-releases/netflix-is-now-available-around-the-world [Accessed 28 April 2017]. O’Falt, C. (2017). How Amazon and Ted Hope Are Trying to Bring Back the ’90s Indie Film Boom. IndieWire. [Online]. 2 May 2017. Available at: http:// www.indiewire.com/2017/05/amazon-studios-ted-hope-bringing-back90s-indie-film-boom-1201811772/ [Accessed 29 April 2017]. O’Toole. (2014). Netflix Passes 50 Million Subscribers. CNN Tech. [Online]. 22 July 2014. Available at: http://money.cnn.com/2014/07/21/technology/ netflix-subscribers/index.html [Accessed 28 April 2017]. Spangler, T. (2014). Amazon Studios Launches 10 Pilots, in Hunt for Second Wave of Series. Variety. [Online]. 6 February 2014. Available at: http://variety.com/2014/digital/news/amazon-studios-launches-10-pilots-in-hunt-forsecond-wave-of-series-1201089415/ [Accessed 9 February 2017]. Spangler, T. (2016a). Amazon Prime Video has 4 Times Netflix’s Movie Lineup, But Size Isn’t Everything. Variety. [Online]. 22 April 2016. Available at: http://variety.com/2016/digital/news/netflix-amazon-prime-video-moviestv-comparison-1201759030/ [Accessed 1 March 2017]. Spangler, T. (2016b). Netflix Inks Deal With 15-Theater Chain iPic Entertainment for Original Movies, Angling for Oscar. Variety. [Online]. 5 October 2016. Available at: http://variety.com/2016/digital/news/netflix-ipic-entertainment-theatrical-original-movies-1201878775/ [Accessed 1 March 2017]. Spangler, T. (2016c). Netflix Targeting 50% of Content to Be Original Programming, CFO Says. Variety. [Online]. 2 September 2016. Available at: http://variety.com/2016/digital/news/netflix-50-percent-content-originalprogramming-cfo-1201865902/ [Accessed 25 January 2017]. Spangler, T. (2018). Netflix Blasts Past Q4 Subscriber-Growth Expectations, Shares Soar to All-Time High. Variety. [Online]. 22 January 2018. Available at: https://variety.com/2018/digital/news/netflix-q4-2017-earnings-stock1202672341/ [Accessed 27 September 2018]. Tartaglione, N. (2016). Sierra/Affinity Completes ‘Manchester by the Sea’ Sales with Uni in Multiple Markets. Deadline. [Online]. 3 February 2016. Available

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at: http://deadline.com/2016/02/sierra-affinity-sells-out-manchester-by-thesea-universal-multi-territory-deal-1201695873/ [Accessed 7 January 2017]. Weber, H. (2017). Netflix Nears 94 Million Subscribers 10 years after Streaming Launch. VentureBeat. [Online]. 18 January 2017. Available at: https://venturebeat.com/2017/01/18/netflix-hits-93-8-million-subscribers-10-yearsafter-launching-streaming/ [Accessed 26 April 2017]. Willmore, A. (2013). “We Can Solve This”: Ted Hope on His New Direct Distribution Labs and How Technology Will Save Indie Film. IndieWire. [Online]. 17 February 2017. Available at: http://www.indiewire. com/2013/05/we-can-solve-this-ted-hope-on-his-new-direct-distributionlabs-and-how-technology-will-save-indie-film-38634/ [Accessed 10 April 2017].

CHAPTER 9

Changing Circumstances of Gatekeepers

9.1   Sales Agents, Distributors and Content Aggregators The previous chapter has demonstrated that Netflix and Amazon associate in different ways with notions of digital disruption and dis-intermediation. The narrative of digital disruption and dis-intermediation will be further explored in this chapter in relation to changing circumstances of gatekeepers in the film distribution business. A number of quite astounding articles about the powerful influence of Netflix and Amazon have appeared in the trade press, with headlines such as ‘How Netflix & Amazon are Creating Greater Tumult in the Independent Film Industry’ (Lyttelton 2016), ‘Netflix and Amazon Look to Continue Dominance’ (Kay 2017) and ‘New Studios Could Ruin the Future of Specialty Distribution’ (Putnam 2018). Because Netflix and Amazon increasingly work as fully integrated studios, these articles argue that the distribution business has become much more competitive in recent years, raising important questions about the profession of sales agents and distributors. How are sales agents and distributors responding to new power dynamics in the distribution business? How are they affected by current changes? What sort of limitations or opportunities do Netflix and Amazon impose on sales agents and distributors? These questions are asked to analyse processes of disruption and change, but they also relate to processes of dis-intermediation. I demonstrated in © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_9

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Chap. 8 that Netflix associates strongly with the notion of dis-­ intermediation because they prioritise a straight-to-Netflix release. Amazon, on the contrary, commits to conventional release strategies, for which more—not less—distribution arrangements are required because they work with other distributors. As distributors, Netflix and Amazon can exert control over such strategies at the level of exhibition. But what remains unclear is how circumstances have changed at the levels of production and distribution. The development of online distribution was initially expected to enable producers to organise distribution without the intervention of distribution gatekeepers. For instance, analyst Peter Broderick (2008) envisioned a ‘new world of distribution’, whereby producers gained control over distribution by cutting out distributors. Other commentators, such as Lobato (2009) and Tryon (2013), have been less optimistic about such processes of dis-intermediation, demonstrating that the physical distribution market continues to represent important cultural and economic values for films. The continuing importance of the physical distribution market means that traditional gatekeepers such as sales agents and distributors often  remain in control of organising the distribution process, particularly for the type of  films that are selected for a cinema release. That is, however, not to deny that Netflix and Amazon are impacting on relationships developed between producers, sales agents and distributors. This chapter draws on the narrative of change, disruption and dis-intermediation to explore changing circumstances of sales agents and distributors. How has their business changed with the development of Netflix and Amazon? And how do they respond to the dominant role of Netflix and Amazon in the global marketplace? Lobato (2009: 174) notes that the new digital era has also created opportunities for so-called content aggregators in the business of distribution. Content aggregators are online gatekeepers who aggregate large collections of films from rights holders (e.g. the producer, sales agents or distributor) in order to provide access for those films to VOD platforms. Given the fact some of the biggest VOD platforms work with enormous collections of films, they work with a group of selected distributors to acquire films, while they ask other companies to work with content aggregators. It is thus clear that content aggregators are a new type of gatekeeper in the business of distribution, playing an important role in the process of making films available online. This provides another perspective through which to explore the narrative of digital disruption and dis-­ intermediation. How do content aggregators work together with

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­ roducers, sales agents and distributors? How do their relationships assop ciate with the process of dis-intermediation? This chapter starts with an analysis of sales agents and distributors. I will argue that sales agents are taking advantage of the fact that Netflix and Amazon increasingly acquire distribution rights as distributors. Netflix and Amazon usually negotiate deals with sales agents to acquire the distribution rights rather than directly with a producer. They operate like any other distributor in that sense, respecting conventional arrangements between producers, sales agents and distributors. However, other distributors are experiencing difficulties in terms of acquiring films at film festivals and sales markets because they compete against Netflix and Amazon, and that results in more risk-taking. I comprehend their response as an effect of increased market competition rather than outright disruption. The second part of the analysis will consider the role of content aggregators. Rather than replacing or cutting sales agents or distributors out of the distribution process, they operate as yet another gatekeeper. Their involvement is necessary to enable access to the online market, particularly for small-scale, low-budget films. Based on this analysis, I put several limitations on claims of digital disruption and dis-intermediation.

9.2   Fierce Competition The development of Netflix and Amazon is impacting on the community of sales agents and distributors. Trade observers note that sales agents are taking advantage of the fact that there are more distributors in the marketplace, which provides increasing opportunities to sell films in international markets. This development is particularly visible at film festivals and sales markets. For instance, trade journalist Jeremy Kay (2017) observed at the Sundance sales market in January 2017: The proliferation of distributors—old and new, theatrical and digital—has created a fiercely competitive sellers’ market, as anybody who attended Sundance would have noted. Acquisitions executives from Netflix, Amazon Studios and the Hollywood majors, particularly Universal, scoured the [Sundance] Park City festival aggressively, driving up prices with their deep pockets and hunger for content. “Anybody who wants a chance to buy one of these type of movies has to get [in] early,” SPC [Sony Pictures Classics] co-president Tom Bernard says. “Once it’s in the marketplace, money speaks.” This applies to the

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i­nternational circuit, too. Netflix is buying the world, mostly, and Amazon Studios, as evidenced at Sundance, is moving in that direction. Both have been—and will continue to be—growing forces at international festivals and markets, which is why local buyers [distributors] have become very worried while sales agents speak diplomatically about competition, privately only too happy to cut the odd deal if they can move the world on a sales title.

As demonstrated in these citations, Netflix and Amazon are now important buyers at film festival and sales markets, with the effect that Hollywood studios and distributors are experiencing increased competition for the most attractive films on offer. Sales agents benefit from the fact that Netflix and Amazon are prepared to pay substantial fees for distribution rights. Their acquisition strategies have already had an impact on Hollywood studios, who are presenting themselves as more aggressive buyers. There have been some substantial deals at film sales markets in recent years. For instance, the US sales agent WME negotiated a $17.5 million deal with the Hollywood specialty studio Fox Searchlight for worldwide distribution rights of the drama The Birth of a Nation (2016). Although the film was made on a budget of $8.5 million, its value increased significantly after the premiere screening at the Sundance Film Festival in January 2016. It became the most popular project at the festival, with Hollywood distributors such as Sony Pictures, Universal Pictures, Warner Bros, Paramount and Fox Searchlight as well as Netflix and The Weinstein Company making offers to acquire distribution rights after the screening. Trade reporter Fleming (2016) notes that initial offers started at $12 million, but various distributors were prepared to pay more. It resulted in a bidding war, with Netflix offering as much as $20 million for worldwide rights. Fox Searchlight won the bidding war, which marked the highest deal ever at Sundance. Fleming (2016) notes that the distribution fee was much higher than “precedent-setting Sundance acquisitions like the $10.5 million deal for Little Miss Sunshine in 2006, and the $10 million deal for Hamlet 2 in 2008”. The US sales agent WME negotiated another substantial distribution deal at the same festival with the sale of Manchester by the Sea (2016) to Amazon. Trade reporter Siegel (2016) notes that the rights for the North American market were sold for $10 million. Once again, there was a bidding war between some of the most powerful players in the business: Sony Pictures, Universal Pictures, Fox Searchlight, Lionsgate and Amazon were all competing for the distribution rights. Trade reporter Dawson (2017)

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notes that substantial distribution deals were also closed at the 2017 Sundance Film Festival. WME negotiated a $12.5 million deal with Netflix to release Mudbound (2017) in the US market and in a select number of territories outside the US, while the US sales agent UTA negotiated a $12 million deal with Amazon to release The Big Sick (2017) in the US market. Dawson elaborates further on the impact of Netflix and Amazon at Sundance in 2017: It’s increasingly clear that these newcomers [Netflix and Amazon] are driving up prices, with the average film selling for twice as much as it did three years ago. This year, 11 films sold for more than $5 million, up from just five last year, four in 2015, and none at all in 2014, when “The Skeleton Twins” set the top of the market at just $3.5 million. The average of the highest 10 reported prices for movies snatched up at Sundance rose from $2.4 million in 2014 to $7.4 million in 2017; the average for all 2017 movies for which a price was reported was $4.7 million.

While it is clear that the average price for films has increased because of fierce competition for a few films that have been sold for between $10 and $20 million, Dawson’s insights also demonstrate that more films have been sold in the price category between $5 million and $10 million. Some of these were bought by Netflix and Amazon. For instance, Netflix negotiated an $8 million deal with the US sales agents CAA and WME to acquire the worldwide rights of To The Bone (2017) and a $5 million deal with the US sales agent UTA to acquire the worldwide rights of the documentary Icarus (2017). Dawson also notes that Netflix and Amazon “acquired several properties in the $2 million to $4 million range.” He concludes that their acquisition strategies have an immediate impact on other distributors: In the process of becoming the largest acquirers at Sundance, the two streaming giants appear to be squeezing out other buyers. Lionsgate, which acquired multiple properties each year from 2014 to 2016, bought nothing in 2017, while Magnolia snagged just one film after getting three or four in each of the past three years.

Dawson mentions that powerful US distributors such as Lionsgate and Magnolia, who are both part of larger corporations with vertically integrated production and distribution operations, acquire less films because Netflix and Amazon have increased competition amongst distributors. Journalist Jones (2017) notes that there is also an important difference in

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terms of the business of traditional distributors and that of new distributors like Netflix and Amazon. Acquisition and distribution budgets of traditional distributors for new acquisitions are based on the expected commercial performance of individual films in cinemas, online and in other consumer markets, but Netflix and Amazon invest in films with the purpose of enriching their SVOD with original content for subscribers. He takes the Netflix original War Machine, made on a $60 million budget, as an example: “The film’s commercial success will be measured not by its box-office takings, but by new subscriber numbers” (Jones 2017). Because the branding and the popularity of SVOD platforms are reliant on the inclusion of this sort of high-profile originals, Netflix and Amazon can make offers that exceed the market value. While market competition is a serious issue for distributors, Netflix and Amazon work with sales agents and attend film festivals to watch new films and negotiate distribution deals. In that sense, they operate in the same way as other distributors rather than as disruptors. Sales agents benefit from more competition amongst distributors and remain part of the distribution process rather than being cut out of the process. On the other hand, if more deals are closed with distributors with global distribution operations, such as Netflix and the Hollywood studios, that means that sales agents give more away control over the process of coordinating the release strategy in international markets, as demonstrated in Chap. 5. It is also worth noting that Netflix and Amazon can play an important role in the process of securing financing for films in development. Netflix, in particular, has become involved with a great number of films as a co-­ producer (and financier). They approach producers and sales agents to increase the number of Netflix originals on their VOD platform. Various commentators have demonstrated that small-scale, stand-alone producers are experiencing difficulties in terms of securing financing and substantial distribution for films (Macnab et  al. 2017; Grater 2016). A deal with Netflix is often financially attractive and means that their films become available to tens of millions of subscribers. A good example to substantiate this argument is the UK action film iBoy (2017), made on a budget of $3 million. Natalie Brenner, the Sales Manager of the specialised UK sales company Metro Films, was developing this film in collaboration with the UK production company Wigwam Films. They initially introduced the project to distributors in various international markets, but eventually closed an all-inclusive deal with Netflix.

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This meant that it became available exclusively on Netflix in international markets. Brenner informed about the development and financing process of this film in a public interview (Brenner 2017): Wigwam Films were working with the up and coming director Adam Randall, who won prizes for short films. I read the script and immediately loved it. It was a low-budget project, quite gritty, science fiction. We really wanted to help so we partnered with Wigwam to try and get it made, and we put a little bit of development money in and created a sizzle reel with [the actor] Will Poulter in it to introduce to international distributors at sales markets. We needed a lot of soft money to get it made because distributors were nervous about a first-time director and negotiating pre-sale deals was difficult. Eventually, we decided to squeeze the budget, but that changed the film significantly: we found out that we were developing a film that wasn’t the original film anymore, and the producers felt unhappy about that. Just before we were about to move into production, Netflix became interested in the project and negotiated a co-production and distribution deal with Wigwam. This was an absolute blessing for Wigwam because they were able to make it for at least $3 million and they got a cast with Maisie Williams and Bill Milner, and it is now on release on Netflix, while we recouped our investment.

Brenner provides insight into the complex nature of developing and financing a $3 million budget action film. Wigwam and Metro Films decided to re-develop the project because they were unable to secure sufficient financing to move into production, but they were fortunate that Netflix became involved and agreed for the film to be made in a way that was originally envisioned. Netflix became co-producer and distributor. They negotiated a deal directly with Wigman, while Metro Films was compensated for their involvement in the development process as a sales agent. Netflix’s involvement in the production and distribution process of this film was supportive for Wigwam and Metro Films. It is the role of the sales agent to secure the best possible deal for a film. Even though Metro Films was initially attached, they recognised that the producers were better off with the Netflix deal than a traditional deal through independent distributors. Netflix, in this case, was not disrupting the distribution process, but operated as any other powerful company with integrated production and distribution operations.

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9.3   Integrated Production, Sales and Distribution Operations The challenging situation of distributors has also come under scrutiny in industry discussions. Trade reporter Greenberg (2016) observed a general sense of dissatisfaction amongst distributors at Sundance: “Not everyone is happy with Netflix and Amazon’s dominant stance at Sundance. For established distributors, the tech giants buying the rights to films, even just the global streaming rights, has proven extremely frustrating.” The fact that Netflix and Amazon are driving up distribution fees is frustrating, but also the fact that Netflix and Amazon are competing for the same films as more traditional distributors. Trade journalist Kay (2017) argues that major and specialised distributors are mostly affected. They need to be responsive to protect their business in the long term: “Smaller companies are having to be even more focused and collaborative if they are to find great projects in an unforgiving market, where the likes of Netflix and Amazon have very deep pockets.” As Kay notes, it is challenging for smaller distributors to become attached to ‘great’ projects which normally raise attention at film festivals and are therefore likely to be picked up by Netflix, Amazon or Hollywood studios. He elaborates on new strategies for such distributors to cope with the state of affairs: At the Ventana Sur market in Buenos Aires last December, much of the talk among buyers centred on the need to adapt or face extinction within 10 years. Buyers that do not move into production, invest in the films they sell, cut exclusive supply deals with desirable producers or get into bed with the Netflixes of this world, will slide off the face of the earth before long.

An important response of distributors, as Kay notes, involves developing closer ties with producers and sales agents through output deals or first look deals. Such deals enable them to acquire distribution rights without having to compete with other distributors. Various distributors already work with such film production and sales departments in order to exert control over the distribution of films, such as Altitude Film Entertainment, Dogwoof and Vertigo Films in the UK market. Sales agents have also responded to the new state of affairs in the distribution business. The French sales agent Playtime (formerly known as Films Distribution) works with subsidiary companies in Germany (Films

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Boutique), Belgium (Be For Films) and the UK (Film Constellation) to establish close connections with producers in those countries and compete with other sales agents for distribution rights. Trade reporter Keslassy (2017) notes that they also “started diversifying its business model by coming on board at an earlier stage on projects, co-developing and co-­ producing select films”. For instance, Playtime is a co-producer and sales agent for the French films Let the Sunshine In (2017), Double Lover (2017) and Beats per Minute (2017). Further, the German producer and sales agent Beta Cinema recently acquired a minority stake in the UK/US sales company Cornerstone Films. Trade reporter Grater (2018) notes that they “partner on commercially-­driven English-language films, combining Beta’s production and distribution operations with Cornerstone’s sales activities—the aim is for the joint alliance to create a stronger foothold for both outfits across the global marketplace”. According to Alison Thompson and Mark Gooder, both Managing Directors at Cornerstone, this collaboration is a direct response to the changing market circumstances: “In the fast-­ changing landscape, vertical integration is key to creating robust and successful enterprises and we’re delighted to unite with Beta Cinema and X-Filme [i.e. Beta’s production partner] who share similar goals” (quoted in Grater 2018). Mike Goodridge, the former Managing Director of the UK sales company Protagonist Pictures confirmed in an interview (2017) that it is important for sales agents to establish close connections with producers: “It’s a real battle these days, unless you have your own material and filmmaker relationships. You have to create your own content because otherwise you won’t have access to the content. It is absolutely a necessity” (Goodridge 2017). Sales agents are thus increasingly a part of the development and production process. They become attached in an early stage to ensure their involvement, but also to intervene in the creative process and prepare the film for international distributors. Goodridge (2017) sees this as a positive development: “I think people have forgotten that sales agents aren’t just collecting a commission from the sale. They have other functions, such as actually making these films happen. They give films market credibility. So much of film production is about the wish for things to happen. But once the sales agent comes on board it means it’s real.” As Goodridge notes, the function of sales agents is to help develop and support projects from an early stage rather than just focusing on the sales process.

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This development whereby independent sales agents and distributors are increasingly turning to integrated operations bears resemblance with the operations of the most powerful companies in the film business, such as Hollywood studios and sales-finance-production companies (i.e. EuropaCorp, Pathé, StudioCanal, Trust/Nordisk, IM Global, Lionsgate and Entertainment One), as identified in Chap. 4. The implication of this development towards integrated operations is that independent sales agents and distributors can exert more control over the production process, but it inevitably requires more financial investment and risk-taking, making their business more vulnerable. In other words, it demonstrates a major change in their business model and business structures, which is now increasingly reliant on relationships with partner companies.

9.4   Negotiating Online Access for Films While I have analysed how sales agents and distributors are responding to new power dynamics, there has been another development in the distribution business with an impact on gatekeeper processes. Given the fact that the online market has become an increasingly important revenue window, the most powerful distribution companies have established digital departments to enable access for their films to VOD platforms. Their digital departments are essentially an extension of their conventional distribution operations. Hollywood distributors, for instance, have built up large collections of films in the past, which they have made available on VOD platforms in international markets through their digital departments. Other distributors with distribution offices in a small number of international markets, such as eOne, TrustNordisk and StudioCanal, have equally established digital departments to make their collections available online, but their control over online distribution is limited to the countries or territories in which they operate because the distribution rights for other territories are not owned by them. Further, there are locally oriented producers and distributors in national markets with in-house aggregator departments; these include specialised distributors such as Thunderbird Releasing (formerly known as Soda Pictures) and Koch Media in the UK market. Because such distributors have also built up large collections in the past, it is the role of their digital departments to develop online strategies and exploit the potential of those films on VOD platforms in the UK.  In terms of Thunderbird Releasing, for instance, 188 of their films were available for rent or

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purchase on Amazon’s TVOD platform in May 2017 (Amazon Video 2017). Their Acquisition Manager Kevin Chan (2017) noted in a public interview that VOD platforms are an integral part of their release strategy for the home video market in the UK: Essentially, when we release films in the home video market, that involves a release on DVD, Blu-ray and on online TVOD platforms. We work directly with Amazon and iTunes, and with specialised platforms such as BFI player, Curzon Home Cinema, We Are Colony.

Digital departments also allow distributors to work on brand building because online audiences can access their collections directly on VOD platforms. For the UK specialised distributor Arrow Films, for instance, a key focus of their business is the home video market. Most of their films are specifically acquired for a home video release. Through distinctive labels  such as Arrow Video, Arrow Academy, Nordic Noir and Arrow Drome, they have developed a strong  reputation in the DVD/Blu-­ray market. In order to develop a long-term business plan for their online business, they created the position of Digital Strategy Manager in July 2016. Daniel Perry, who was appointed to take on this new role, noted in a public interview that brand building through labels such as Arrow Video is also an important focus for them in the online market (Perry 2017). While they work directly with mainstream VOD platforms such as Amazon to enable online access for individual films, they have established other partnerships to enable online access for curated collections. For instance, their label Arrow Video has become available as an ‘add-on’ subscription in Amazon Channels in the UK. This channel, to which Amazon Prime members can subscribe for a monthly fee of £4.99, provided access to a selection of more than 50 films in June 2017. Such a strategy provides an opportunity to promote their labels directly to audiences, while at the same time generating attention for individual films as part of curated collections.

9.5   The Development of Content Aggregators The fact that digital departments have been established by the most powerful distributors has resulted in an enormous increase of films online, but there are still a great many distributors and other rights holders in the distribution business that operate without integrated digital departments. They work with content aggregators to enable access for

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their films to VOD platforms. Lobato (2009: 174) notes that content aggregators have appeared in the marketplace to perform the role of online gatekeeper. Rather than replacing or cutting distributors and other rights holders out of the distribution process, they operate as yet another distribution gatekeeper. Their gatekeeper role allows the most powerful VOD platforms (e.g. Netflix, Amazon, iTunes, Google Play and so on) to work with a relatively small number of trusted partners rather than directly with a plethora of individual distributors and other rights holders. Content aggregators normally work with distributors, but they can also work directly with sales agents or even producers if they have yet to secure distribution for their films. As the term ‘aggregators’ indicates, they aggregate large collections of films which are subsequently introduced to VOD providers. In line with the logics of abundance and open access, it is in the interest of content aggregators to make films available as widely as possible in the online market rather than filtering films out and restricting access. Examples of content aggregators include Film Buff in the US, Content Film in the UK and the US, Premiere Digital in India and the US, The Movie Partnership in the UK, Universciné in France and Kontor New Media in Germany. Another example is Under The Milky Way, who work with an international network of individual agents in different countries, and are thus more globally oriented. The  role of aggregators, and the extent to which they can exert an influence over the online distribution process, is often reliant on the type of rights holder they work with. They usually work with producers and sales agents to secure online distribution in selected international markets or even globally, but with distributors to secure online distribution in one specific country or distribution territory. As already discussed in Chap. 7, there are differences in terms of making films available on TVOD platforms and SVOD platforms, and in terms of their revenue models. Such differences also have an impact on the business  of  content aggregators. For instance, industry analysts Fontaine and Simone (2017: 36) note that content aggregators usually receive 20% of every online sale or rental transaction on TVOD platforms. It is thus in the interest of content aggregators to make as many films as possible available on  such  TVOD platforms.  SVOD providers, on the other hand, are more selective in terms of deciding which films they make available on their platforms, and content aggregators usually require an upfront fee from them. 

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In terms of the gatekeeper role  of content  aggregators, they make decisions about which films they represent online and introduce to particular TVOD and SVOD platforms. Muriel Joly, Business Development Manager with the aggregator Under The Milky Way, described in an interview how they operate as a gatekeeper (Joly 2016). She notes that it is to their advantage to build up large collections of films, and that they rarely reject films—generally only if rights holders do not commit to technical requirements related to the digital formatting and digital delivery of films. The process of acquiring films for their collections is very much a routine practice. It is different from the acquisition process undertaken by traditional distributors in the sense that aggregators are far less selective, partly because they do not pay upfront fees to right holders. While it is relatively easy  to negotiate access for films to TVOD platforms, it is much more challenging to negotiate such access to SVOD platforms. This process involves negotiating short-term deals with SVOD platforms for packages of several films, with aggregators performing an important gatekeeper role in terms of putting together different packages for specific platforms. Joly highlights the fact that VOD platforms are occasionally looking for specific films to anticipate audience demand. For instance, she notes that the success of the critically acclaimed Oscar-winner 12 Years a Slave (2013) created opportunities for films with shared characteristics such as the subject matter and genre, and for films with the same lead actor(s) or director. In particular, she recalls that Netflix became interested in Half of a Yellow Sun (2013) because the actor Chiwetel Ejiofor played one of the leading roles, and he won various awards for his performance in 12 Years a Slave. Another aspect of the aggregator’s gatekeeper role involves providing promotional support, working closely with the editorial teams of VOD platforms to market films, as Joly explains: We also add promotional value because our representatives are in contact with the editors who decide which films they highlight on their platform and where films are positioned. And we send out newsletters to the platforms to inform about new films in our catalogue, and which films are important in specific weeks. We have developed those relationships over time and that enables us to support the rights holders. The platforms also invest in marketing, but not always for the same reasons as we do. Their marketing campaigns are designed to attract online

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audiences to their platform, while we invest in the marketing campaigns of individual films. Because our marketing budget is limited, we apply for public funding to be able to support the marketing of films online.

Joly is here referring to their involvement with EU-funded online distribution projects such as Walk This Way and The Tide Experiment, which are specifically developed to experiment with online release and marketing campaigns. For instance, an important aspect of online marketing is video seeding: the process of bringing trailers of films and other promotional materials to the attention of online audiences through social media and specific websites or blogs. Joly notes that they work with the digital advertising company Emerse to organise online marketing campaigns. She also notes that the leading VOD platforms have created their own online marketing applications for rights holders. For instance, iTunes created the iAd and Search Ads applications, which allows rights holders to put advertisements or trailers on mobile apps of selected iTunes business partners. In terms of the impact of online marketing, Joly notes that so-called ‘click-­ through’ rates have so far demonstrated that users respond well to advertising, but that has not yet amounted to significant online sales revenue.

9.6   The Continuing Importance of Gatekeepers The analysis in this chapter has demonstrated that gatekeepers continue to perform an important role in the distribution business, even though they are affected by online developments. The powerful role of Netflix and Amazon has resulted in increased competition and changes in the way sales agents and distributors operate, with the effect that integrated production and distributors operations have become increasingly important. I comprehend the response of sales agents and distributors as an effect of increased competition rather than outright disruption. The various examples of highly-anticipated films acquired at film festivals demonstrate that the involvement of sales agents and distributors in their distribution process remains critical. Netflix and Amazon are powerful players and acquire some of the most acclaimed projects on offer, but they work with sales agents to acquire those films as distributors, in the same way as Hollywood studios or independent companies. The process of acquiring films has not been revolutionised or disrupted by them. This analysis about the impact of online change

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and new power dynamics has challenged the widespread narrative of digital disruption and dis-intermediation and indeed popular discourse about new media: the belief that digital technologies are making gatekeepers in the distribution business irrelevant. Processes of disruption and dis-intermediation may happen at the level of exhibition, as demonstrated in relation to Netflix in the previous chapter, but gatekeeping arrangements between sales agents and distributors have remained largely unchanged. The analysis of content aggregators reinforced the claim that gatekeepers are critical to secure distribution. Contrary to conventional wisdom, I found that more—not less—gatekeeping arrangements are needed in the digital era to secure access for films to the online market. Content aggregators have appeared in the business as additional gatekeepers who provide online access for thousands of films. They are important gatekeepers in the online market, working together with distributors and other rights holders rather than replacing them in the distribution process. Trade analysts Fontaine and Simone (2017: 33) have observed that they are also working to protect their role as gatekeeper in the long term. For instance, they note that they increasingly provide technical support for digital formatting and they provide promotional support for films. Further, some aggregators are reorganising their business by expanding to the DVD and Blu-ray market, with the desired effect that they can organise the physical disc release and online release for distributors and other rights holders (2017: 41). I have argued that gatekeepers remain a critical part of the distribution process, but that is not to deny that the development of the online market has enabled experiments with other forms of distribution. As mentioned in Chap. 7, Amazon allows rights holders to make films available directly on their TVOD and SVOD platforms, and that undermines the role of gatekeepers. Video sharing platforms such as YouTube and Vimeo also provide opportunities for rights holders to bypass gatekeepers. Further, producers may occasionally work together directly with specialised VOD platforms. Such  self-distribution arrangements  between producers and VOD platforms have  been developed predominantly by producers of micro-budget films, while they have remained rare amongst producers of low-budget, medium budget and high-budget films. I will further analyse how producers are responding to online distribution opportunities in the next chapter.

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References Amazon Video. (2017). Amazon Instant Video Catalogue UK. [Online]. Available at: https://www.amazon.co.uk/PrimeVideo [Accessed 15 June 2017]. Brenner, N. (2017). Public Interview with the Sales Manager of the specialist UK sales company Metro Films at the Film Expo South event in Southampton, 3 February 2017. Broderick, P. (2008). Welcome To The New World of Distribution. IndieWire. [Online]. 15 September 2008. Available at: https://www.indiewire.com/2008/ 09/first-person-peter-broderick-welcome-to-the-new-world-of-distributionpart-1-71787/ [Accessed 19 April 2017]. Chan, K. (2017). Public Interview with the Acquisitions Manager of Thunderbird Releasing at the ‘Distributing Films Online’ Workshop in London, 27 April 2017. Dawson, J. (2017). Are Netflix and Amazon Driving Smaller Distributors Out of the Sundance Picture? Variety. [Online]. 17 February 2017. Available at: https://variety.com/2017/voices/columns/netflix-amazon-sundance-filmfestival-1201989660/ [Accessed 15 June 2018]. Fleming, M. (2016). Fox Searchlight Near Sundance Record $17.5 Million Deal For ‘The Birth of a Nation’. Deadline. [Online]. 26 January 2016. Available at: https://deadline.com/2016/01/the-birth-of-a-nation-nateparker-fox-searchlight-sundance-record-slave-rebellion-1201690450/ [Accessed 20 May 2017]. Fontaine, G. and Simone, P. (2017). VOD Distribution and the Role of Aggregators. May 2017. A Report by the European Audiovisual Observatory. Goodridge, M. (2017). Private Interview with the Former Managing Director of the UK Sales Company Protagonist Pictures via Skype, 6 November 2017. Grater, T. (2016). Film Summit: UK on Course to Release 900 Movies in 2016. Screen International. [Online]. 24 November 2016. Available at: http://www. screendaily.com/news/film-summit-uk-on-course-to-release-900-moviesin-2016/5111661.article [Accessed 3 January 2017]. Grater, T. (2018). German Outfit Beta Cinema Takes Stake in UK Sales Company Cornerstone Films. Screen International. [Online]. 14 February 2018. Available at: https://www.screendaily.com/news/german-outfit-beta-cinematakes-stake-in-uk-sales-company-cornerstone-films/5126555.article [Accessed 13 May 2018]. Greenberg, J. (2016). Netflix and Amazon Offer Indie Filmmakers Hope (And Lots of Money). Wired. [Online]. 28 January 2016. Available at: https:// www.wired.com/2016/01/netflix-and-amazon-offer-indie-filmmakers-hopeand-lots-of-money/ [Accessed 21 August 2017]. Joly, M. (2016). Public Interview with the Business Development Manager of Under The Milky Way at the ‘UK Film Distribution: What’s Changing?’ Event in London, 13 June 2016.

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Jones, E. (2017). Send in Brad Pitt: Netflix Gets Out the Big Guns as it Declares War on Cinema. The Guardian. [Online]. 10 October 2016. Available at: https://www.theguardian.com/film/2017/may/21/war-machine-netflixhome-movie-invasion-brad-pitt-david-michod [Accessed 6 February 2017]. Kay, J. (2017). EFM Preview: Netflix and Amazon Look to Continue Dominance. Screen International. [Online]. 6 February 2017. Available at: http://www. s c r e e n d a i l y. c o m / 5 1 1 4 4 8 6 . a r t i c l e ? u t m _ s o u r c e = n e w s l e t t e r & u t m _ medium=email&utm_campaign=Newsletter78 [Accessed 15 February 2017]. Keslassy, E. (2017). Thriving European Banner Films Distribution Rebrands Into Playtime, Expands Scope. Variety. [Online]. 9 September 2017. Available at: https://variety.com/2017/film/global/thriving-european-banner-films-distribution-rebrands-into-playtime-expands-scope-1202552874/ [Accessed 15 May 2018]. Lobato, R. (2009). The Politics of Digital Distribution: Exclusionary Structures in Online Cinema. Studies in Australasian Cinema, 3(2), 167–178. Lyttelton, O. (2016). Disruptors: How Netflix & Amazon are Creating Greater Tumult in the Independent Film Industry. IndieWire. [Online]. 9 February 2016. Available at: http://www.indiewire.com/2016/02/disruptors-hownetflix-amazon-are-creating-greater-tumult-in-the-independent-film-industry-272596/ [Accessed 7 April 2017]. Macnab, G., Niola, G., Blaney, M., Cabeza, E. and Goodfellow, M. (2017) Are Much Shorter Theatrical Windows Around the Corner? Screen International. [Online]. 2 January 2017. Available at: http://www.screendaily.com/features/are-much-shorter-theatrical-windows-around-the-corner/5112398. article [Accessed 25 January 2017]. Perry, D. (2017). Public Interview with the Digital Strategy Manager of Arrow Films at the ‘Distributing Films Online’ Workshop in London, 27 April 2017. Putnam, R. (2018). New Studios Could Ruin the Future of Specialty Distribution— Opinion. IndieWire. [Online]. 5 February 2018. Available at: https://www. indiewire.com/2018/02/amazon-studios-netflix-distribution-future-sundance-1201924251/ [Accessed 28 September 2018]. Siegel, T. (2016). Sundance: Amazon Inks Huge Deal for ‘Manchester by the Sea’. The Hollywood Reporter. [Online]. 24 January 2016. Available at: https:// www.hollywoodr epor ter.com/news/sundance-amazon-inks-hugedeal-857577 [Accessed 15 April 2017]. Tryon, C. (2013). On-Demand Culture: Digital Delivery and the Future of Movies. New Brunswick: Rutgers University Press.

CHAPTER 10

Experiments with Direct Distribution in the UK

10.1   The Perspective of Small-Scale, Stand-Alone Producers While I have analysed how powerful companies such as Netflix and Amazon associate with claims of digital disruption and dis-intermediation, it is also important to acknowledge that such processes are associated with smaller companies at the specialised, indie end of the market, as demonstrated in the edited collection Digital Disruption: Cinema Moves On-line (Iordanova and Cunningham 2012). In particular, small-scale, low-­budget producers are experiencing serious difficulties in terms of generating sufficient value for films through conventional distribution arrangements and release strategies. The theatrical release window has for many years been talked up as the ‘engine that drives the ancillary sales’, giving films an afterlife on secondary windows or platforms, such as streaming services (through forms of online VOD releasing), physical and online retailing (through DVD and Blu-Ray sales), and television broadcasting (through streaming services and through satellite or cable television). However, smallscale, low-­budget films are increasingly struggling to build up a profile in cinemas because the number of film releases in cinemas has increased in recent years. Producers and distributors are finding that the theatrical cinema market is saturated, and well-informed observers are increasingly asking if the theatrical window will continue to be a driving force in the © The Author(s) 2019 R. Smits, Gatekeeping in the Evolving Business of Independent Film Distribution, Palgrave Global Media Policy and Business, https://doi.org/10.1007/978-3-030-16896-4_10

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future (Macnab et al. 2017). This has resulted in fierce discussions about the value of the theatrical cinema market for small-scale, low-budget films. Given that such films often generate very modest returns from a theatrical cinema release, some specialised independent distributors are developing day-and-date release strategies in cinemas and online to generate more attention. There are of course also small-scale, low-budget films that are unable to secure distribution through a distributor. The rapid development of the online market has provided new opportunities for such films. Some producers are undertaking experiments with direct distribution arrangements. The term ‘direct distribution’ describes the process whereby producers organise distribution with the involvement of gatekeepers. However, rather than selling the rights to distributors, the rationale behind direct distribution is that producers remain in control over distribution rights, and work with distribution professionals to develop release strategies. Such distribution professionals are often individual distribution consultants with the expertise and networks, which is necessary to help producers with the process of introducing and promoting films to cinemas and other consumer platforms. Experiments with direct distribution arrangements are more common amongst producers of low-budget films than self-distribution arrangements. As noted in Chaps. 7 and 9, the term selfdistribution describes the process whereby producers organise distribution directly to consumer platforms such as VOD providers, without the intervention of gatekeepers such as sales agents, distributors or content aggregators. There have been discussions in the film industry about the differences between direct distribution and self-distribution. Ted Hope, who is now at Amazon Studios (see Chap. 8), has repeatedly argued that direct distribution arrangements are often overlooked in discussions about the future of low-budget, independent films. In 2011, for instance, he called for more nuance and precision to make sense of alternative distribution arrangements (Hope 2011). The term self-distribution is often employed as a catch-all term for various forms of alternative distribution, and this has caused confusion amongst industry participants and observers. According to Hope, direct distribution is the model that is mostly employed by small-­ scale, low-budget producers as an alternative to conventional distribution arrangements. This discussion of different forms of distribution mirrors broader academic discussions about the concepts of intermediation, dis-­intermediation

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and re-intermediation. The term dis-intermediation is often employed as an all-embracing term to describe processes that undermine conventional intermediation processes, but it fails to describe the hybrid distribution arrangements that have emerged with online developments. Virginia Crisp (2017), for instance, notes that online developments in the film industry are certainly affecting the role of intermediaries, but they are not entirely cut out of the distribution process. Crisp employs the term re-­ intermediation to highlight the fact that relationships are re-arranged within existing distribution structures and intermediaries remain an important part of that process. This description corresponds with the direct distribution approach adopted by some film producers. The purpose of this chapter is to analyse how such direct distribution arrangements compare with conventional distribution arrangements for small-scale, low-budget films. Direct distribution provides a new perspective through which the involvement of gatekeepers in distribution processes can be explored. There are some key questions to consider here. How do producers work with distribution consultants to organise the distribution process? Is the role of distributors disrupted or undermined by them? And what is the role of other gatekeepers such as sales agents and content aggregators in the direct distribution process? My analysis will focus on distribution arrangements in the UK market. I will first provide more insight in the current state of affairs for small-­scale, low-budget films in the theatrical cinema market and demonstrate that specialised independent distributors increasingly recognise that new strategies are needed to generate more value to their films, such as day-­and-­date. In order to compare conventional distribution arrangements with direct distribution arrangements, I will subsequently develop case studies of distribution and release strategies developed for the UK films Borrowed Time (2012), The Machine (2013) and The Survivalist (2015).

10.2   Changing Circumstances for Producers The business of small-scale, stand-alone producers in the UK is heavily affected by the fact that competition for films in cinemas has increased. Trade reporters speak of the saturation and polarisation of the theatrical cinema market in the UK (Macnab et al. 2017; Grater 2016). The function of theatrical distribution as a shop window from which added value can be generated is under serious pressure, particularly for small-scale,

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low-budget films. Various industry commentators have observed this trend also in other European markets such as France and Spain (La Combe 2016; Heidsiek 2014). I will draw on quantitative data to explore such issues further for the UK market. The number of screens in the UK went up by 12.5% between 2011 and 2017, but the number of films released increased by 36%, from 558 to 760 releases (UK Cinema Association 2018; BFI 2018). The Chief Executive of the Film Distributors’ Association, Mark Batey, comments on this development: The lavish supply of new titles into cinemas is not universally beneficial. Not necessarily for distributors, charged with sustaining as well as launching their titles week by week. And not necessarily for the public, either, as many films vanish before the full potential audience has had a chance to catch them. (Quoted in Macnab 2016: 232)

As Batey argues, while more film releases offer more opportunities for film producers and distributors to enable access for a greater range of films in the theatrical cinema market, it also means that more films are given a modest release, with the effect that they are unable to build up a profile. These shifting circumstances within the theatrical market create huge challenges for smaller films, as Table 10.1 demonstrates. The bottom half of Table 10.1  The number of film releases in UK cinemas Screens at widest point of release Films showing on >50 screens

Films showing on