How the Film
Industry Works

Hey, what’s up, everybody? Ben Pohlman here, and welcome to another one of these informal no-frills videos. It’s just me, you and a computer screen where we get to discuss the topics, the tools and the tactics that help our agency clients close the gap between their content and their audiences.

If you’re new here, welcome – go-to producers.agency to get involved. And as always, this is a two-way conversation – I’d love to know about what you think and what your experiences are.

So the title of this video today is how the film industry works, so we’re going to take a look at a 30 000 foot view of this big picture and consider how it applies to you and where you fit into it so that you can get an overview of the road ahead. So the business – what is an industry?

Now, you’ve probably heard the word or the phrase the ‘film industry’ thousands of times, right? But have you ever stopped to consider what it actually is? So let’s define it.

So imagine this – I want you to imagine that you could pause time right now and that you could take a snapshot of all of the companies that are involved in producing work. All of the distribution companies, all of the production companies – and think about all the people that are involved in the making of the product and then the Distributing of the product.

So consider all the people making films and then consider all of the people that are consuming the product whether they’re renting it or streaming it or going to the cinema and then consider all of the different territories that this is happening – got the UK Market you’ve got the UK industry you’ve got the American industry. You’ve got the Indian industry you’ve got the African industry – and how all of those different Industries affect one another, if there’s any crossover.

So that’s a snapshot in Time Imagine you could take a picture of this overall industry, and all the systems and the processes and people that are involved in it. That’s the industry right? And then consider how it changes Through Time. Netflix for example not that long ago was a DVD rental company, right? They used to deliver DVDs to your door.

So you’ve got this snapshot of this industry, right? And film as a business exists within this industry. And a film is a product right that can be exploited throughout the world in a range of different media. So who are the key players in this snapshot in this industry and where do you and your company fit in?

So let’s have a look this is an overview of the entire industry and all of the companies and the different systems and the processes that are involved in taking a product from the development all the way to the end consumer. So let’s have a look at this.

So in the development stage you might have companies and peoples and processes that are involved in the concept, the idea, the writing the development, the script editor, you’ve got your talent agents that exist in that area, you’ve got your producers your directors.

And then we move into financing and we have the producers, the production companies, we have the package. So the script the director the cast, The pre-sales the sales estimates, the co-production, the co-finance, the package of a product before it gets moved into production, right?

And you’ve got other areas of funding or other Partnerships that bring funding with like National subsidies, National broadcasters, Finance Equity Bank Gap, Finance Tax financing executive producers associate, co-producers completion bonds Insurance each one of these pieces has complexity behind it, right ?

Imagine all the companies that are involved in just insurance. And then if we move into production or and then and then post-production or think of all the companies that are involved in that so you’ve got your production companies your producers your directors your cast your crew, Your Studios, your locations. You’ve got your support services your post Production Services etc etc.

Then you move into distribution then again think of all the companies and the systems and the people that are involved in that. So you’ve got your International sales agents you’ve got your producers rep who might rep you at Market. You’ve got your distributor you’ve got the marketing involved you’ve got your film festivals your film markets you’ve got your marketing of and you’re selling of distribution rights and you have your commissions.

So the distribution stage then moves into the exploitation stage which is the exhibition the cinema release you’ve got your different Windows of exploitation you’ve got I mean maybe Netflix DVD sales paytv VOD internet free TV syndication etc etc etc and

That’s when the product is connected with a consumer, right? So consumer products seen by the end user. Now all roads lead all the systems and processes lead to the consumer connecting with a film right and it’s only then that the value from the product is released so the risk of this whole thing is that there’s huge potential potentially huge sunk cost – which you know, money spent on the whole thing before the value is released. These spend potentially millions or several million sometimes before the film is ever connected with an audience and the complexity also adds significant risk.

Think of all the different people that are that are involved in a higher budget production and it doesn’t actually have to be that complex it could be a one man or one woman with an iPhone in the whole doing the whole process right development post-production distribution consumer put it on YouTube it could just be one person so it could be one person or it could be thousands of people involved in this this journey here but at the bottom of everything is audience demand.

Now, audience demand is key. Without an audience demand none of the systems and processes make sense. So as an indie creative as an indie producer or production company it’s your job to minimize the risk by either reducing the complexity reducing the sunk cost that’s before the value release and increasing the audience Demand right if you can prove a demand from an audience then that’s the key that’s the core piece all of the other companies that are involved in the process they want to see that audience Demand right and if as an indie producer or production company if you can prove the audience demand ahead of time then you’re minimizing the risk right so the challenge for the Indie producer is to think about and to consider up front how can you increase audience demand how can you prove audience demand and how can you reduce the complexity and how can you reduce the sunk cost involved in the manufacture of the product without compromising on the quality or the or the value of of the thing that you’re creating right obviously the producers agency will help you with the last one um but I’d love to hear from you how do you go about reducing complexity reducing the cost but increasing or keeping the value of your product and how do you go about generating audience demand so love to hear from you let me know what you think and thanks very much everybody and I’ll see you in the next one very soon