Why is the entertainment industry so broken? Many people are asking that question as more of Hollywood’s unseen creative and business talent are leaving L.A., unable to support themselves in an industry that was once rewarding and profitable for decades.
There’s no leadership for the people who support this exceptional industry—except in one golden category: profits. Consumers are able to enjoy great shows from a multitude of places outside conventional television and yet those who create this great content are hurting and hurting badly. Tech has successfully entered the delivery space, adding another layer of revenue. All that new profit should result in revived production and vis-à-vis a financial boost for the creative community. Instead, they languish.
How could we begin the process of encouraging parts of this industry to do better?
There are many places to start; here are just four. Create vibrant funding events with financing forums, revive self-distribution utilizing AI, reclaim film festivals for the non-Cannes crowd, and, finally, tackle the biggest problem of all: bad deals. It's time to remake our industry for the people working in it. Tech isn’t the problem. Greed is.
Problem One
Warner Brothers Discovery (WBD) just paid $15 million for Super/Man: The ChristopherReeve Story. The Pigeon Tunnel was bought by Apple TV for $10 million. These are amazing sums for documentaries. By comparison, the craft services expense on studio-financed feature films rivals this amount. While the thin-crust sales agents help to facilitate these incredible sales, the remaining table scraps (licensing fees) for new non-fiction content paid by WBD and Disney will be fought over by everyone else. Like other Hollywood creators, many non-fiction filmmakers will be blinded by these huge numbers and never see anything beyond five-figure deals for their finished work. It's not that their films aren’t good; in fact, they are. There just isn't room for everyone at the top.
There’s a fix to this, so stay with me.
A few years ago I attended several co-financing forums outside the U.S. They basically all had the same setup: The event took place inside an ornate historic building with an amazingly long table of dark polished wood. Pulled up around this table were forty-plus high-backed leather chairs. In those seats were some of the world’s largest and most influential broadcasters. Seating for a couple hundred observers was booked months in advance. The forums I attended were in Toronto and Amsterdam. There are others. Over two days, content creators pitched in a live format of 30 minutes each. They showcased a few minutes of tape, presented a solid pitch, and then the assembled group of commissioning editors discussed or argued each pitch. If it lined up with the editorial theme of their channel, they committed to licensing the program for their territory, right then, in the room, in front of an audience. It was beautiful watching a compelling pitch and having the world’s decision-makers debate the merits of a concept, then together fund an entire production. There was joy in the room. To be fair, not all that pitched were funded, but many were.
We duplicated this event inside WESTDOC (a conference I co-founded), calling it Pitchfest. Creators and producers from all around the U.S. understood there was value in this format. Many that were pitched got funded and today some have had good lives in the broadcast, theatrical, and streaming markets.
It took the decision-making to the decision-makers. The producers didn’t have to slog through the double-speak of self-interested agents or navigate the labyrinth of junior-level executives who have the ability to say “no” but lack the authority to say “yes.” An annual U.S. event like this would actually support our talented creative community who truly possess great ideas and skills.
The combined $25 million spent on Super/Man and The Pigeon Tunnel could have funded 50 documentaries, 50 films that could have a larger effect than these two ever will. We’re overlooking a part of this industry, a community that rarely meets the executives at these companies. They can still buy high-end films at Sundance and Cannes, but at the same time, set aside $25 million for films that need attention, that need money, that need...hope. Assemble this new annual festival, subtract out the agents, those “dealmakers,” and gather the creators to pitch at this big event. If it’s a good pitch and a capable producer, fund it. We can stock some knowledgeable entertainment attorneys nearby to service the indie producers to make responsible deals.
Make the excitement from investing in a dedicated community that can supply excellent programming that isn’t washed in the Kardashian model of junk television. Let’s see stories that inspire us, educate us, and rise into a future where facts and stories underline everything. Let’s make people care for well-researched and well-executed content that was funded not because their Sundance PR strategy worked well, but because the current funding model is broken, really broken and we need a remedy. Enough of choking off great films by killing the incentive by underfunding them. They have the money; put it to good use and let’s have films that matter. We now have streaming behemoths with more money than they know what to do with. When the automotive and oil companies made huge historic profits, it was PBS who peeled away money to give back to the public by providing stand-out programs for all the country to enjoy. It’s time to invest in future talent. Now, let’s get serious about it.
Problem Two
There needs to be a better model of success for the self-distribution of independent documentaries. I know a place. YouTube.
Hear me out.
YouTube (YT) is crushing its retained audience, and we should be learning how to harness it. It makes sense, a desktop library of everything for everyone. History, finance, astronomy, social issues, mechanical wonders, travel, how-to, science, movies—everything. Mix this global platform for content discovery with an AI-driven marketing plan and you’ve got a self-reliant income stream. Is it here now? Not yet, but it's coming.
A little background. After being brutalized by pathetic licensing fees from the standard broadcast, cable, and even streaming channels, content makers (aka producers) need to find other forms of revenue generation. It's time to revisit self-distribution with a proven framework. It once existed in DVD and VHS for titles of all shapes and sizes. Somewhere along the digital superhighway, self-distribution got lost. The once popular “do-it-yourself” style framework needs to be dusted off, reformed, and handed back to the creative community. Yes, finished programming can be uploaded and listed on YouTube and Amazon, but it's promptly lost in an ocean of content. We need something better, something smarter. AI holds valuable strategies, if the right questions are asked of it.
YouTube is consistent in its draw—a diverse and delightful ocean of programming in all shapes and sizes, designed for...everyone. Here’s the problem: It’s not the first platform filmmakers use for sincere monetization because there’s no roadmap to success. YouTube also isn’t the first place an audience looks to rent content. It exists, but it isn’t popular compared to other digital storefronts. Yes, potential viewers can be pushed over to a paywall platform, but that’s not smooth either. Where YouTube flexes is the ad-revenue framework. Its fractional earnings are good for influencers and those YT personalities who post short-form content weekly, but bad for filmmakers with a limited inventory of marque long-form titles. Think of the last time you looked at a feature film clip of The Godfather or a James Bond installment. Likely it was in HD or 4K. By the end of the clip, they were pointing you to rent or buy the full program from another platform. While indie documentaries and non-dramatic films don’t have the cache of a mainstream big-budget theatrical release, they do have an opportunity to capture a specific audience in simple pre-roll, commercial-like marketing, just like other media products.
There are more than 5 billion views on YT every day. In the way cars, energy foods, cruises, and food delivery services are pre-rolled before core content is enjoyed, it’s time to sell indie films the same way. Sell films…like a commercial…to hook your tribe of viewers. It's in your wheelhouse to create a compelling trailer for social media and YT, and identify your target group, just like the car companies, energy food manufacturers, cruises, and food delivery services. Your audience awaits.
The fragmentation of YouTube is the perfect complement for indie documentaries for three core reasons:
1. Like it or not, we’ve moved towards the second and third screens (desktop/laptops and smartphones) as the most capable destination for consuming content, all content. The filmmaker in me says, “People will care about the viewing experience!”—they don’t. Anywhere, any device. It's settled.
2. Social media is the perfect derivative promotional platform. Smart, short form, and targeted. No more full-page print ads, thin eblasts, or overpriced PR firms. Go to your audience on the cheap. Lead them towards consumption. Filmmakers can go directly to their potential audience for a lot less money.
3. Rather than wait for a broadcast license to validate your ego (because it won’t enrich you), make money like a start-up. Find your audience and sell them. There used to be a model where a specialty title, a DVD (or gasp! VHS) could be sold directly to your audience without affecting a future broadcast sale. Today a digital rental and a license of the same program to a streaming channel appear as two fruits from the same tree, but keep this in mind: it wasn’t always like that. Broadcasters for the longest time believed that 10,000 DVD sales for a year preceding a license term would muddy the waters for viewer interest. Never for a moment did they consider those 10,000 DVDs a demonstration of an audience. Many times they would walk away from a deal that was incorrectly perceived as audience saturation. There are 332 million people in the U.S. Isn't it possible that the 10,000-50,000 buyers are just a sample? Times have changed. Tech has beat broadcast, and with it, all the crappy conditions have fallen away from their anemic deals.
Thankfully, the old model got thrown out with the efficiency of digital delivery. Today coexistence inside the multi-delivery universe is standard. The audience is fully fragmented. If a big broadcast or streaming channel offer is forthcoming, great, pull it off YT. Until then, find your audience and earn revenue, as you should. The streamers will appreciate the audience you’ve captured and you will find that confirming data an asset in determining if your title is worth licensing.
To harness YT’s broad framework of marketing, we need a blueprint to succeed, a viable model to profit. The fragmentation of media has created an all-you-can-eat buffet that’s two miles long, and yet some people exclaim, “I snack and snack but I’m never full!” Familiar? Meet your audience where they are. Pull up a chair. They live at the YT buffet. They want a better meal. Let’s look at how AI can help fill their plate with your content as the main course…right now. Here are four of the basic tools AI can assist with in sharpening that outreach:
1. Audience Targeting: Use AI to understand what viewers like and how they behave. This helps content owners customize their marketing to reach specific groups more effectively, even niche audiences.
2. Predictive Analytics for Content Performance: With AI, analyze different aspects like genre, length, and keywords, as well as who your audience is. This helps filmmakers decide which content to promote first, based on what's likely to perform well.
3. Analyze and Optimize: Use AI tools to automatically make your videos better. AI can look at trends and suggest improvements to things like titles, descriptions, and thumbnails, making your content more appealing to viewers.
4. Personalized Recommendation Engines: Let AI recommend your content to individual viewers based on what they like. This can boost engagement and increase views, likes, and shares by suggesting content that matches each viewer's interests and habits.
This is new territory. Right now AI is a little difficult for many to grasp; it's new, but change is here…again. Here is a quick example of tech and media tripping over each other in a rush to service an emerging marketplace. Prior to the iPhone’s release in 2007, we had a world of Blackberries, Trios, and other pre-iPhone mobile devices that started to process video content. These were early days. The telephone companies ruled how revenue would be distributed with all that new mobile content surging through their new cell towers. They decreed 50% of every transaction, gross dollars, would be theirs before sending the remaining revenues downstream. Their greed was short-lived. The introduction of the iPhone and the “apps” universe took hold, introducing a far superior technology in delivery and consumption. A new ecosphere was born. Entrepreneurs were encouraged to create apps of all kinds and incentives were built in. Today, Apple charges 30% at the gate. That’s where we are today. AI is about to change how we approach finding our audience with better information and more of it.
Why YouTube? There are other platforms for transacting and delivering content. YouTube is an emporium and it’s mostly free. It maintains itself as the library of moving images on our laptop or desktop, an entire 100-story New York library. Its genius is its in-house tools for segmenting the audience. It algorithmically serves up more content for whatever searches are commenced.
Keyword your search and find your audience. For many independent productions, the days of enjoying a lucrative broadcast premiere are over. A new form of marketing within the YouTube superstructure needs to be developed for the myriad of documentaries. It's not enough to share in a few dollars of fractional ad revenue; there needs to be a form of real compensation in self-distribution. As a seasoned executive in international program sales, I know this. Polished programs are not fresh bread. Programs that are 5,10,15, even 25 years old have further life. Even when these programs were first released not everyone saw them. Get out there and cast your line. Longevity is a quiet asset. Your audience is waiting.
Problem Three
Film festivals have become a cinematic country club of privilege and exclusivity—they shouldn’t be. It wasn’t always that way. Film festivals were a way to enjoy a curated selection of films dedicated to a genre or a specific actor or director. Festivals were for everyone. No high-dollar velvet rope pass required. Just buy tickets for the films you want to see. Every local theater gathered a group of films that thematically would appeal to an audience. Afterward, head next door for drinks and food to connect with others about the meaning of it all.
Today’s movie experience is a world of singular films (many of negligible quality) preceded by 30 minutes of commercials ($16.00 for a ticket and $18.00 for a soda and popcorn). The value is gone. It's an obvious gouging, which perhaps encourages people to just wait for the “at-home” premiere. Do people want to go out to watch a film to have a shared experience? Yes, but when the cost outweighs the joy, people look for other distractions. Bring back value by opening theaters to a formula that worked well for decades. A selection of films for a reasonable price. Get them through the doors and into seats to watch, enjoy, eat, and drink.
A "film festival" might highlight some obscure Danish director or a specific genre, but one pass got you entrance for a day or a week. They weren’t the newest films, usually quite the opposite. There was value in learning about something else, something unfamiliar.
With the theatrical marketplace in turmoil, a revival of well-curated festivals needs to be introduced to every city in every state. Not the arthouse theaters, but the main theaters; the ones close by or anywhere that hosts public events—museums, colleges, city centers, anywhere with a screen and decent sound. Give people a reason to leave their house, talk, socialize, find their commonalities. Tom Cruise stars in some very entertaining films, but this industry will be defined by the storytellers we don't know. Let’s see films from the future Wes Andersons, Edgar Wrights, Christopher Nolans, and Paul Thomas Andersons. We need to have an alternative to those tent pole extravaganza releases and get audiences back into festivals for two obvious reasons. First, to have fun again. For everyone who's been to see a revival of Rocky Horror Picture Show or Moulin Rouge or Scott Pilgrim versus the World, it’s all about the big screen as a shared experience. When was the last time anyone saw Trainspotting or The Big Lebowski or Fight Club on a big screen like it was intended? When they did, they certainly remembered it. We still do. To a new generation, these films may have no resonance. The big screen is still a wonderful experience.
Second, Americans want to be entertained. The theatrical model is slowly dying for good reason. Spending money for a poorly conceived, overhyped, star-driven, comic book, stale popcorn movie ruins another Saturday night. Many have already sworn off the theatrical experience. It seems quaint that there was a time when parents could leave the kids for a night with the babysitter and go to dinner and a movie. (Today, that’s a $250 proposition.) It was once part of the fabric of American life but sadly sabotaged by the very industry trying to revive it. Crappy films preceded by endless inane commercials and trailers of loud, scary stupidity. When the feature presentation does finally appear, it is at best a two-star noisefest.
Curate themes to match cities and states. Get people away from the news; let them enjoy an unfolding story on film. Mix in new films and old. Exhibitors have the facilities—most are still empty, only slightly recovering after COVID-19. Yes, bring in younger people and have them see films the way they were supposed to be seen. Have Q&As with the audience afterward with academics or musicians or writers or comedians, perhaps even an actor or director—just like the big film festivals that most people never get to attend. It works in Cannes; it will work in St.Louis. Have people walk out…engaged, satisfied, and ever more curious about our big world. They will come back again. The current model isn’t working. It's time to draw on the past and get people connecting again in a place that everyone once held with great affection. Will theaters make less on ticket sales? Likely. But a near-empty house isn’t making them much either. Most theaters are multiplexes. Peel off one or two of the seven screens and watch people return. So will the joy.
Problem Four
Want better shows? The deals have to get better, seriously better. Our industry can point to a couple dozen filmmakers and producers who are well compensated, but the rest? It’s a form of creative sharecropping. Why does Netflix succeed in terms of quality programming? Besides a few outliers, they commission or acquire programs without editorial interference at good rates. I know, to the broadcast industry it's heresy, but in the Netflix this model it works. There are great filmmakers and films that get caught in an unending trap of crappy representation and lecherous negotiations to end up with very little compensation for their work, all to get on a branded network. They know it, and the networks exploit it.
There used to be a reason to get into this industry—to tell great stories and make money. It really happened. I witnessed it. I was a part of it. An entire generation of filmmakers has grown up with amazing tools to capture imagery and compose new films, but the deal-making, negotiation, and pricing for the finished work haven’t kept up with this amazing technology.
Let’s look at the not-so-distant past. A few years after emerging as a sincere alternative to broadcast television, cable channels became successful via the very shows they helped finance. Then, they decided to let the beancounters run the place. All the Emmys, film festival awards, and even a few Academy Awards they started to collect were because of the creative part of an unspoken partnership that functioned because of one simple premise: Everyone succeeds when we all work together. It was corrupted when the beancounters and agents stole that joy and kept it for themselves. For a moment, pretend you’re in the music business. We know the creators enjoy revenues, especially if they wrote a song or were lucky enough to perform it. They have guilds and unions to protect their rights. Not so in television. That idea that a producer brought into a development meeting? By the time it’s finally contracted the producer has given up their rights in exchange for financing. The network owns it. I’m not kidding. There are exemptions here and there, but after government legislation zeroed out producers' rights, the owners of the content are not the creators.
I’ve seen plenty of creators/producers who came up with a great show, then produced it for well under the going rate, scratch out little in the way of profit for a first and second season. That successful new concept series is then renewed for a whopping 3-4% budget increase in the third season. All the while the cable channel crying about how it’s “not really" rating. Then, a fourth-season negotiation gets heated and the big brains at the network take the series from the producers, cut it away from those creators, and give it to another production company. That’s not the end of it. Most producers used to maximize their sweat equity with a promise of revenues from international licensing. I occupied a seat in that big wheel of reliable revenue streams. They eventually took these assignable rights away from the producer and included them in the All Rights Worldwide production agreement. Though they did promise the producer he/she could receive 20% of the future international sales…except in the small print, the network had a branded version of its network outside the U.S., throughout the world in multiple forms of transmission and delivery. If it showed on their network, even dubbed into another language, it wasn’t considered a foreign sale. In the end, the producer saw nothing beyond the original production fee. It may have played for the next 20 years—unlikely the producer would ever see a dime.
An entire generation of filmmakers got stomped on. They had to give up on the idea of ownership of the intellectual property and any control of their creative/editorial process. Many producers told me they spent more time battling the network accountants than actually producing the films. It was as if the network was angry if the producer actually made any money. And that’s where we are. The big names can wait for the right deal. Everyone else has to expect to take a loss so the network can wildly succeed. They hope for a better deal the next go-around (which never happens) or they can move over to a supporting gig as a real estate agent (I’m not kidding, many do). I have friends who are or who have been buyers at various networks. We have real friendships beyond the world of television. We hang out, go camping, go to dinners, and attend each other's family events, but we do not agree on one thing. They believe all producers need hand-holding and constant creative input...interference I say, (they say "input") into every episode they green light. I disagree. Early on, the Discovery Channel, History Channel, and even PBS let producers do what they do best (hmm, isn’t it funny how Netflix employs the same strategy). We've become an industry of executive know-nothings who are paid to interfere in every production. Attack of the middle managers. I had one producer who sold a one-hour show on Spring Break, you know, the out-of-control, week-long celebration by college kids on the beaches of Florida. He turned in his second cut to find out that his executive producer had been promoted elsewhere in the company. The new EP watched the show and hated it. Why are there so many drunken, slurring, college kids? Why does it glorify partying? The producer, an older man, said simply his approved treatment was for an hour program about Spring Break, an American collegiate ritual, not an academic decathlon. Her reply? “This is why the Muslims hate us.” She was serious. What’s the point of telling great stories if someone is going to interfere with the process? (By the way, he finished the film and it rated very well.) The broadcast industry is collapsing in on itself from willful ineptness.
It's time for our industry to stand up and demand reasonable compensation for great ideas and valuable content. The American non-fiction production community couldn’t organize a lemonade stand on a hot day. It's a band of independents who want to disagree with everything and everyone to remain broke but independent. Do you think Ken Burns, Earl Morris, and other top-tier directors are worried about the independent filmmaking community? Long ago, they started making good money and good deals. They are the rightful independents who bow down to the funders because they know they can walk away if they don’t like a proposed deal. Everyone else who really needs protection has no guild or union to protect them. Too scared to not work again. Too scared to be blackballed. It's time we rethink supporting our creative community. The British, French, Spanish, etc. all protect producers' rights in terms of deal-making. They own their work and benefit from a structured creator/owner system that was put in place to protect them, not the broadcasters.
There was an experienced writer whose recent scripts never seemed to find success. Rejection after rejection became the norm, leaving him disheartened. Convinced his agents didn't take his work seriously, he took a bold step. He reprinted the script for Casablanca, changed the title, and inserted his name as writer. He sent it off to his agent for review and representation, only to be met with yet another rejection. Astonishingly, there were notes criticizing the basic premise of the story: "Why would Rick open a bar in Morocco? Too unbelievable," and “Weak dialogue.”
Someone wasn’t paying attention.
And that’s where we are. No one is paying attention to an American industry whose best resource is about to pack up and leave. There are plenty of industries where the government stepped in to assist during periods of change. In Europe, they partially fund new productions to keep their creative communities alive. In Hollywood, it's always been a game of sink or swim. Eventually, everyone was able to find a place to swim. Not this time. If we don’t start caring about who creates and produces our television shows and series, our feature films, this vibrant industry will lose its best asset—people.
