DIRTY LITTLE SECRETS

Australians pay 30% to 70% more on iTunes than Americans do for the same content.

But that's not the secret. Anyone with a computer can find that out.

The dirty little secret was actually revealed by the man in charge of Apple Australia, Tony King.

At an inquiry in Australian Parliament on the pricing of Microsoft, Adobe and Apple products in Australia, Mr King revealed:

"The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks".

"In Australia, they have often set a higher wholesale price than the price of similar content in the United States."

"(In the digital age) the content industry still runs with perhaps old-fashioned notions of country borders or territories or markets. (This) creates confusion for customers"

He went on to say that Apple had pushed for lower Australian pricing with content owners, to no avail. 

http://www.smh.com.au/digital-life/digital-life-news/evasive-microsoft-adobe-fail-to-justify-prices-20130322-2gjkr.html

Now, to people within the film and music industries in Australia, the above is not new information.

To the Australian public, however, this is a revelation.

You see, it is really easy for the general public to blame Apple for the price differential between geographic regions.

Apple are the flashy, know-it-all, hipster face of tech and content distribution.

Apple was also the first-mover, from the established players (I'm ignoring Napster and P2P file-sharing services at this point), to create a usable online content store for legal downloading.

In that sense, Apple is the well-dressed, smarmy guy/girl in the room, who loves to tell you about their success. When these kinds of people miss-step, the world loves bringing them down a peg.

And so it is with Apple. Schadenfreude of the highest order.

The real culprits for the price differential between geographic regions, of course, stay silent.

Why get in the way of a public grilling that should be directed their way?

But Apple know they are not to blame. And now they want you to know too.

According to Apple, it is the MAJOR COPYRIGHT HOLDERS, like the big Hollywood Film Studios, who are making you pay higher prices.

The little independent filmmakers are not to blame. They don't have the negotiating power to cause such a differential.

From my perspective, however, Apple is only half right.

The problem is actually bigger.

You see, price differentials for movies don't just happen in the online world, like iTunes, but also in the physical world of cinemas as well.

In Australia, the viewing public are shaken down for every last cent at both the cinema and in the online content stores.

There are two bandits in this enterprise. THE EXHIBITORS (i.e. cinemas) and the MAJOR COPYRIGHT HOLDERS (i.e. Hollywood Studios).

The exhibitors empty your left pocket at the cinema, and the major copyright holders empty your right pocket when you try and purchase a film later on DVD or online.

What has Australia done to deserve this treatment?

Nothing.

This issue is all about the big, well-established players in the film industry, the titans, wanting to make as much money as possible.

I have actually written about the exhibitor side of this problem before and, from the looks of things, little has changed.

http://openingactfilms.blogspot.com.au/2012/06/exhibitors.html

Exhibitors continue to enforce outdated geographic restrictions on film releases internationally. The Quentin Tarantino helmed 'Django Unchained', for example, was being discussed ad nauseum for months in America, when it hadn't even been released in Australia.

There used to be a good reason for this difference in release dates worldwide. Once upon a time, a film was geographically restricted because it only had so many copies to screen in cinemas. Once all the copies ('prints') were finished being used in America, they were shipped to Europe, then Asia, and so on.

Today, the film can be sent as a high-resolution digital file to screen immediately, all over the world. There is no real point to geographical release restrictions anymore.

Except...

...to maintain a false scarcity of the film and keep ticket prices artificially high, fleecing the audiences for their money.

Then, once the film has finished in the cinemas, the Major Copyright Holders continue to maintain outdated, higher 'non-theatrical format' prices (i.e. DVD and online prices) for the film in different regions. There used to be a good reason for this too. Shipping VHS tapes and DVDs to far away locations, like Australia, was expensive. The cost of the additional shipping and handling was therefore passed on to consumers.

Today, the film can be downloaded from online stores, instantly, with no shipping costs, no physical product and no logistical overheads (aside from the computer infrastructure, e.g. the hardware, software and labour that Apple use to maintain the iTunes store). There is no real point to price differentials between regions anymore either.

Except...

...to maintain a false 'price floor', and therefore keep prices artificially high, fleecing the audiences for their money.

And they wonder why people are not 'morally' challenged by pirating films? The audiences have been mugged for so long, they feel no moral obligation to put money into the pocket of the bandits.

And sadly, I can't blame them.

But the biggest players in the film industry don't seem to care.

Even if it means encouraging every last person to pirate, they will squeeze every last dollar out of audiences while they can.

Why?

Because they are big public companies with shareholders.

Because the people currently in charge of these film industry titans know they won't be around when the whole thing comes crashing down.

They will have cashed in their chips long before we have to clean up their mess.

And that, my friends, is the dirtiest little secret of them all.

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VERONICA MARS AND THE MILLION DOLLAR EXPERIMENT

It seems like every other day someone is announcing a new 'world changing' event.

Maybe we have become too cynical. Overexposed to media hype, our attention can only be drawn by announcements of the extreme.

Hype, in a way, has become a self-sustaining cycle.

But occasionally the exposure is warranted. An event is truly paradigm shifting.

Six years ago, a paradigm shifting event had its genesis. It was May 2007, and the last episode of a TV show, 'Veronica Mars', aired in the USA.

Their audience was devastated, despite the fact it had run for only three seasons. When TV audiences fall, they fall hard.

The executive producer, Rob Thomas, never gave up on the concept, despite the cancellation. In optimistic defiance he wrote a feature film script set in the world of Veronica Mars.

And then, nothing.

Warner Brothers, the studio who owned the show, turned down the film version.

Rumours of the show's return whirled, circled, settled and disappeared.

Slowly 'Veronica Mars' disappeared over the horizon. A DVD back-catalogue item.

But not for Rob Thomas.

Years passed.

Nothing.

Then suddenly, a new seed of hope.

Crowdfunding appeared. A direct connection with your audience, who then donate to your film project, up-front, to get it made.

Rob Thomas approached Warner Brothers. Would they let him use the 'Veronica Mars' story, which they owned, if he could crowdfund enough for a movie?

Sure, was Warner Brothers' reply, just raise 2 million dollars and it's yours.

So Rob Thomas listed the film on the crowdfunding website Kickstarter. The crowdfunding campaign had 30 days to raise $2 Million from their fan donations.

And here is where this event earned its hype. The paradigm shift is real.

The 'Veronica Mars' crowdfunding campaign raised the first million in 11 hours.

Within one day, the film had raised the required two million.

At the time of writing this, the campaign has raised $3.5 Million.

It set a crowdfunding speed record for the fastest project to break $1 Million.

http://www.kickstarter.com/projects/559914737/the-veronica-mars-movie-project

Incredible.

This week, therefore, crowdfunding for film hit puberty. From here there will be growth, pain, angst and opportunity.

The angst has already started. Industry-shifting events always generate debate.

On one side are the independent filmmakers, who with consternation decry the 'Veronica Mars' crowdunding campaign as a travesty.

Crowdfunding, they say, was supposed to be for independent artists to connect with audiences and thus receive the backing to make their art. They see 'Veronica Mars' as a takeover of crowdfunding by studios that already control the majority of the pie.

On the other side are the industry pundits and futurists, saying that 'Veronica Mars' has rung in the beginning of a beautiful new world for film.

This new world is one where audiences and artists/creators are in synch, with a symbiotic relationship of support and artistic creation. This new world, they say, should not discriminate on the scale of the artist, be they studio or independent filmmaker. Everyone should get to play.

Interestingly, both of these viewpoints have an in-built assumption that I am not sure I agree with.

The assumption is that the 'Veronica Mars' crowdfunding experiment was a success.

Certainly the campaign was a success. They raised a huge amount of money, well beyond the $2 Million target. Previously, this sort of success was reserved for music projects using crowdfunding, like Amanda Palmer.

Movies, however, are not like music projects. Music projects, during their creation, scale in ways very unlike films.

Music, while still expensive at the most produced end of the spectrum, can still be made within a reasonable cost niche. By contrast, and despite technological improvements, the resources needed to make AND RELEASE films are still enormous. Hopefully this will change, but it is the reality that filmmakers face today.

So, in the present paradigm, films still need to be a profit-making exercise to pay for the on-costs that music doesn't have, especially around a theatrical release.

And it is with this in mind that I question the assumption that the 'Veronica Mars' campaign is a success.

Why?

Because who is their untapped audience now?

Where will they make the profit they need, to pay for film related on-costs, if they have already drained the dollars from their supporter base?

Will their base feel exploited if asked to pay for the film at the cinema too?

Maybe I am wrong, and their audience, loyal to the end, will show up in droves.

But I'm not sure.

I'm not sure if, ultimately, the 'Veronica Mars' crowdfunding experiment will be a success.

I'm not sure if crowdfunding is built for these sorts of mass projects. They might be bleeding the well dry up front.

The world may have changed, but how much?

Time will tell.

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I CAN PRESIDENT OBAMA, AND SO SHOULD YOU!

Filmmakers everywhere should be doing the 'President Obama'.

No, it's not a new viral dance craze.

But it is revolutionary.

And it all starts with one man.

But it's not the President.

What if I told you that the driving force behind President Obama's successful 2012 reelection campaign was another man lurking behind the scenes?

It sounds like a movie plot conspiracy.

A super genius.

A man who assembled a team of fellow geniuses and built a sophisticated computer system to win the election.

A Bond film perhaps?

This may all sound far fetched, but it is absolutely true.

And he even has a name. Not a silly code number or pseudonym.

Harper Reed delivered President Obama reelection.

But more important than who he is, is how he did it.

Filmmakers should be paying attention.

He built a system to track voter, and potential voter, data. Simple yet extraordinarily powerful.

Harper Reed and his team could then track, down to the individual, who their army of Obama Campaign volunteers (the 'door knockers', as they are imaginatively called) had contacted and how engaged the potential voters were with President Obama's re-election efforts.

Now this may not sound sexy to people in the film business traditionally, but it is indeed revolutionary.

Why?

Imagine if, before you have even finished your script, you could be sure that it had an audience. What would that be worth to you?

If you're a filmmaker and the answer isn't 'priceless', you should change careers. Now.

Imagine if a movie studio could be sure that its new $100M fantasy sci-fi epic had all the elements that would attract a big audience and loads of ticket sales.

This is the power of data.

Data is the new world currency. Just ask Mark Zuckerberg.

The President knew it. And now he is the President again.

But why aren't we doing this as filmmakers? Our livelihood is actually certain to benefit from this kind of audience data revolution, more so than the political sphere.

And yet, in a bizzare irony, it is a POLITICIAN leading the way. How odd.

To help get you up to speed on this new world of data, I present to you this excellent article on the President's data team, including Harper Reed. It is a must read.

http://www.theatlantic.com/technology/archive/2012/11/when-the-nerds-go-marching-in/265325/1/

If you are lazy, however, the part you must know is:

With Davidsen's help, the Analytics team built a tool they called The Optimizer, which allowed the campaign to buy eyeballs on television more cheaply. They took set-top box (that is to say, your cable or satellite box or DVR) data from Davidsen's old startup, Navik Networks, and correlated it with the campaign's own data. This occurred through a third party called Epsilon: the campaign sent its voter file and the television provider sent their billing file and boom, a list came back of people who had done certain things like, for example, watched the first presidential debate. Having that data allowed the campaign to buy ads that they knew would get in front of the most of their people at the least cost. They didn't have to buy the traditional stuff like the local news, either. Instead, they could run ads targeted to specific types of voters during reruns or off-peak hours.

According to CMAG/Kantar, the Obama's campaign's cost per ad was lower ($594) than the Romney campaign ($666) or any other major buyer in the campaign cycle. That difference may not sound impressive, but the Obama campaign itself aired more than 550 thousand ads. And it wasn't just about cost, either. They could see that some households were only watching a couple hours of TV a day and might be willing to spend more to get in front of those harder-to-reach people.

Incredible.

Keep in mind though, knowing the size of your audience is not a new idea. For example, there is a famous (though questionably accurate) story about filmmaker Kevin Smith and the release of one of his films by the film moguls, the Weinsteins. For the unaware, Kevin Smith is famous for his films 'Clerks', 'Mallrats' and 'Dogma', as well as his extensive public speaking and comic book writing.

As the story goes, Mr Smith advised the Weinsteins not to spend a large amount on releasing his film, because he wanted the production budget and the distribution budget to add up to a certain maximum amount.

For the purposes of this story, we'll call this total amount 'X'.

Smith claimed that the audience he had cultivated over the years amounted to a certain regular amount of box office return, equal to at least 'X'. These people, Smith said, would always buy tickets because they were 'Kevin Smith' fans.

Let's call this number of guaranteed fans 'F'.

So, including the production budget, as long as the Weinstein's spent no more than 'X' releasing the film, they wouldn't lose money.

According to the story, however, the Weinstein's ignored Smith's advice and, in the short run at least, they lost money on the film.

So what is the moral of the tale?

Even if it's not true, this story is informative conceptually. The guesstimation of audience size by Mr Smith in the story, however, has now become antiquated by the new world of data.

In the future, you won't have to guess. Data is how you will know, for your film project, what your 'F' is.

'F' will be a powerful number. It will drive constraints like the amount of investment money you will be able to raise to make your film, and therefore help you determine your 'X'.

But 'F' will also bring opportunity. It will inform how much more you need to do, to raise awareness about your film. It will guide your focus for engaging audiences, and potential audiences.

In short, knowing 'F' will help you build your audience, and your career, as Kevin Smith has.

And the data revolution has already begun. From the documentary makers who have used targeted online advertising of their film to track the 'click-throughs':

http://www.nytimes.com/2012/12/18/business/media/finding-a-documentary-audience-for-a-cause.html?smid=tw-share&_r=3&

...to Netflix creating their new original show, 'House of Cards' using Netflix viewer data to show who to cast (Kevin Spacey), who to select as Director (David Fincher), and even what kind of show to make (a remake of the original BBC TV Series):

http://www.salon.com/2013/02/01/how_netflix_is_turning_viewers_into_puppets/

As with anything new there are concerns. In particular, there is worry that too much data-driven decision making will lead to formulaic films and TV shows being made.

I don't agree.

Formulaic content was already being made, long before there was ever the faintest notion of a data revolution.

All the data does is tell you what audience exists. Nothing more. Nothing less.

You will still have to make creative decisions, to engage with this audience. Perhaps though, the data will give you pause to scale your budget to the available audience.

So, no more bankrupting studios with $100M films, that have no audience to watch them.

This can only lead to better decisions on the business side of filmmaking, which is traditionally our weakest area. We are creatives after all.

And for you, the time has come to embrace the data revolution.

Use the data to work out your 'F' and then work to engage and grow your audience.

President Obama knew it was important enough to invest in, and he only wanted four more years.

This is your entire film career. How much more important should it be for you?

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ACQUIRING SUPERPOWERS

We live in remarkable, revolutionary times. If you pay attention long enough, you realise it really is an amazing epoch to be alive in, on this small clump of dirt we call Earth.

Everything on Earth is evolving in some way. Notions of gender, marriage, sexuality, technology, economics, power, politics are all changing.

Remember when we just accepted everything as it was, purely for the reason 'because'?

Those days are over. In the developed world, everything is evolving though a post-modern maze. We need real answers. So, for the first time in generations, we have had to go back to the script and work out why things have been written the way they are.

The best example of this navel gazing is in education.

Remember when you went to school, because that was just what you had to do?

Even that is changing. There is now an education debate going on, worldwide, that you should be paying attention to.

People are asking, what is the real point of education? What should we be teaching our youth to be ready for the future? What should we be learning, as adults, to prepare ourselves for the challenges to come?

Tough questions, going to the foundation of education's very existence.

First, you have to know where education started. The education system was originally designed to produce more compliant and effective factory workers in the manufacturing industry, particularly for the big factories of the UK, Europe and America. It was not a philanthropic gesture.

Don't believe me? Start here and keep googling:

http://sethgodin.typepad.com/seths_blog/2011/09/back-to-the-wrong-school.html

But something has changed fundamentally in the developed world, since that inception. The manufacturing jobs that built the current status quo are disappearing to developing countries, to chase lower wages and higher profit margins.

http://www.americanprogress.org/issues/labor/news/2012/07/09/11898/5-facts-about-overseas-outsourcing/

So, we now have an education system producing people hard-wired for a societal construct that no longer exists.

Can this lead to anything but misery?

Yes, it can lead to something better.

I remember learning to read and write. It was so incredible that it felt surreal. To be able to hear these words in my head and articulate them into thoughts and stories.

It was like a superpower. It still is.

But now, we need a new superpower. Luckily, this superpower that can be acquired.

We need to learn how to code. All of us.

Some of us will be better at it than others. Not all of us will make a career out of it.

But EVERYONE needs to learn it.

Software is now a driving force behind everything. Where once a person had a job keeping a spreadsheet tracking deliveries, now there is a program that can do it automatically.

This is the future, and it will affect every industry.

Film and content creators, I am talking particularly to you. The tools to distribute and promote your content will increasingly involve software.

It's happening already. There are now dedicated iphone Apps just for content from specific films. As this area grows, you will have to be able to at least understand what the programmers building websites (or any other software) for you are talking about.

But this is about more than that. This is about understanding the zeitgeist. It's about understanding how people think, so that you have a better ability to empathise and appeal to them as an audience for your films and stories.

If you don't understand what is driving the culture, how can you be a part of it as a storyteller?

If you don't even have a basic awareness of how coding works, you are being left behind. And that applies to everyone, whether you are a filmmaker or not.

Have you ever seen a senior citizen struggle to complete a simple task on a computer?

How will you feel talking to an eight year old that knows more about technology than you do?

http://www.youtube.com/watch?v=nKIu9yen5nc&feature=youtu.be

The evolution of society in the developed world, and the need for new superpowers, has already begun.

Are you preparing for it?

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CREDIBILITY FOR SALE: AN OPEN LETTER TO THE AUSTRALIAN ACADEMY OF CINEMA AND TELEVISION ARTS (AACTA)

Dear AACTA,

Why are we Australians so quick to sell ourselves to the highest bidder?

Apologies, before diving into my diatribe, I should provide you with some context.

I was reading through some older emails I had de-prioritised recently.

We all do it. Time is a commodity more precious than platinum, for everyone, these days. You skim read and answer the most urgent, while leaving the rest for that unicorn-like spare minute.

Pegasus had arrived for me this particular day, so I was finally getting to some older communications.

One in particular caught my attention. It was a communique' from you, The Australian Academy of Cinema and Television Arts (AACTA), regarding the future of the AACTA Awards.

I noted a number of positive ideas about a sustainable model for the AACTA Awards. Well done, it should be a pillar of our industry for years to come.

I also noted, however, that you are in search of a 'naming rights' sponsor for the AACTA Awards again.

I sighed internally.

This year, AACTA, you took a quantum leap forward in the level of esteem with which the Awards are held. It was a very impressive event, with famous attendees, healthy TV numbers and excellent media coverage.

Bravo.

That being said, once you have established credibility for your work, tangible credibility, you should protect it. Credibility is one of the few things you have a chance to preserve, purely by maintaining the integrity of your work.

Would you respect the 'Tena Lady' BAFTA Awards?

I understand there are economics involved, but the AACTA Awards have literally JUST established themselves as a credible and prestigious event.

I am an AACTA member, I was an attendee at the 2013 Awards, and I saw the news coverage. It was something to be proud of.

This was a vast improvement to the 2012 'Samsung' AACTA Awards. I can't even type that without reacting to the blatant commerciality of having a sponsor's name in the title.

And it is worth noting at this point that Australians, in particular, have a strong distaste of feeling 'sold to'.

This year, without the burden of a naming rights sponsor you were simply 'The AACTA Awards'.

Elegant.

Prestigious.

Kind of like the BAFTA's or, heaven forbid, The Oscars.

You cannot buy that kind of esteem. It makes the whole enterprise something people want to be a part of.

And once you have sold this earned esteem, like selling your soul for a dollar, you cannot buy it back.

So, dearest AACTA, I implore you.

Please find another way to make the AACTA's work, without selling your name to the highest bidder.

Couldn't categories of sponsorship work, with a lower barrier entry level for smaller sponsors? Less comp tickets, perhaps only for nominees? Lose the Awards luncheon and have all the Awards in one event at the Awards evening, to save venue costs?

There must be a way. For the good of the Australian industry for years to come, there has to be.

Some things should be worth more than money.

Sincerely,

Pete Ireland
Opening Act Films

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