TIFF 2011 Heenan Blaikie / E&Y State of the Industry
On September 12, 2011, Heenan Blaikie, along with Ernst & Young hosted the 5th annual State of the Industry discussion for media and entertainment executives who were in town for the Toronto International Film Festival. Moderated by Steven Gaydos, Executive Editor of Variety Magazine, panellists included Tom Bernard, Co-President and co-founder of Sony PicturesClassics; David Glasser, Chief Operating Officer of the Weinstein Company; Rachael Horovitz, Producer of Moneyball and Grey Gardens; Victor Loewy, Chief Executive Officer of Alliance Films; and Martin Moszkowicz, Chief Executive Officer of Constantin Film.
In addition to the panel discussion, the audience of 165 were asked to provide their input to the discussion through real-time polling.
1. Film was universally seen as the art form of the 20th century. Is film still seen that way in the 21st century?
Yes - 46%
No – 54%
This year, the discussion focused on what financial and creative changes have occurred within the film industry in the past decade. One of the main concerns, especially with the amount of “blockbuster” movies that at times seem to have more style than substance, was whether filmmaking is still considered an "art form". Responding to the question by Gaydos as to whether making "interesting" films is still a priority, Glasser responded that audiences are showing enthusiasm for both mainstream and independent films.
2. What is the most important element in controlling costs / financing a film?
Smarter compensation packages for stars and directors – 54%
Private Investment – 6%
Film funds – public – 4%
Co-producing with others – 35%
In relation to the business side of filmmaking, the panelists agreed that while despite the advent of technology and the audience’s growing appreciation for both mainstream and independent films, the struggle to get a film made is just as difficult as it was a decade ago. In addition, Horovitz, who produced the hit Moneyball, said that now cable system operators have almost as much say as to how a film is "labeled" as the film companies who work with independent producers. For independent producers who are looking to pair up with film companies who are making less films and spending less money on development than they did ten years ago, Horovitz warned that though current development deals look promising, that they could potentially lessen the creative control they have over their present films and future projects.
3. What’s currently the most important marketing tool?
Social Media – 51%
Festivals – 7%
Online Distribution – 9%
Print and Advertising – 33%
With the surge of popularity in using social media to promote films, studios are obviously finding that it is beneficial and reaching the desired target audiences, but they are not necessarily saving that much money, as premiering film trailers on television is still the preferred way of reaching out to mainstream audiences.
4. How large is a threat is piracy to film?
Piracy is a minor threat to the state of films – 11%
Piracy should be a concern and needs to be monitored – 9%
Piracy is a huge threat to film and something needs to be done immediately – 80%
Because of the threat of piracy, online advertising, while beneficial, is problematic. Moszkowicz recounted a story about a scene from a 2005 movie that was downloaded on YouTube 2.4 million times, but the film company did not receive any revenue until the production company negotiated a small royalty fee for each viewing the trailer received.
As for the future? According to the panelists, it depends on how well film companies adapt to the continuous developments in technology and audience demands. DVD sales are dwindling, as movie rental franchises, such as Blockbuster have shut their doors and there is an expectation that sales will continue to head south. While downloading films has become more popular, large franchises, such as Walmart and Target are being more discerning as to what physical copies of films they want to sell. The panel agreed that as long as international sales remain high, and more importantly, films with well-known actors and films that appeal to the general market are still being produced, everyone will be able to adjust to the changes that are guaranteed to come over the next ten years.
