23 Nov 2012

Never have the opportunities to reach the public been better – but paradoxically, the film industry has chosen to ignore them.

By: Annette K. Olesen, Film Director

In the 1980s and 1990s, the Danish film reviewer Ole Michelsen was famous for rounding off his film review programme ‘Bogart’ with the words: “Remember, films are meant to be seen in cinemas”. This pay-off went on to become the golden rule for film aficionados and the film industry in Denmark. The autumn is the peak season for cinemas, and this year the season has kicked off with an intense debate on the topic: Crisis in the Danish film industry. The quasi-religious immutability of the ritual is under threat; quite simply, too few people are buying admission tickets to Danish films.

Thus far, commonly held – and voiced – opinions back the conclusion that films which cannot generate sufficient cinema ticket sales to turn a financial profit are, by definition, poor films. Phew! What a relief for the distributors and cinema owners, who can wash their hands of the whole mess. And the studio execs can go back to staring fixedly at the bottom line with a clear conscience – after all, you cannot polish a turd. Everyone knows who to blame: the screenwriters, the directors and the Danish Film Institute (DFI), which considered the films significant in the first place. But no-one is taking a step back to consider whether the conclusion is really as obvious as all that. In Denmark in years gone by, milk was sold from dairy stores and delivered to homes by horse-drawn milk floats; let there be no doubt about it, if the grocery trade had been left in the hands of film distributors and cinema owners, the clip-clop of horses’ hooves would still be echoing down the streets of Copenhagen.

I would hazard the guess that the problem here is not the milk itself. The crisis is not about a shortage of narratives and ambitious screenwriters and directors; it is actually directly comparable to the current financial crisis in that those with responsibility for the financial situation have – stubborn as donkeys – refused to recognise which way the wind is blowing and order the necessary change in course. The crisis has to do with business models, communication strategies and the places where films are sold – also known as the film’s ‘windows’.

Moviegoers – our very raison d’être – have acquired new habits. They have picked them up from surfing the Net and enjoying the accessibility that we have all long become used to thanks to new technologies: direct and immediate access to news, knowledge, entertainment and other people. People are choosing to download our films illegally rather than buy them on DVD. No-one knows the exact figures, but the 27 October edition of the Danish newspaper Børsen estimated that losses on DVD sales alone have amounted to DKK 500 million over two years. It would be great to heap all the blame for this theft on the users, but if you live in a remote little village and the film you want to see isn’t being screened at a cinema within a radius of 200 km, and if you didn’t manage to make the trip to the nearest cinema on one of the two days the film was showing there, well … you’ll just have to make other arrangements. That is the entrepreneurial spirit in action. As a film director myself, I naturally cannot applaud the undermining of my own films’ financial sustainability, but I can barely contain my delight that people actually want to watch them. At the end of the day, that’s why I make them. The scale of the theft is, in and of itself, evidence that there is nothing wrong with the quality, and ordinary citizens cannot be held responsible for the fact that no-one is trying to make the films visible and legally available in a manner that suits a modern audience.

In principle, I and an author own all the rights to a film we initiate ourselves. However, we are not necessarily skilled – or interested – in either sales or distribution. Therefore, the practice in the past has been for us to transfer all rights to the studio, which was then to come up with the best life for the film, i.e. the life that generated confidence in the underlying voice, and generated income so that the working relationship could continue. Instead of having peace and quiet to work in, we now find ourselves in a situation where our films – in stark contrast to the film mediation we accepted a year ago under the header “Set film free” – are locked in cages. With all access prohibited. Here’s a little example:

All my feature films are to be found on MUBI.com – an excellent, legal Video On Demand (VOD) site. MUBI has selected films for its catalogue on the basis of love of artistic films, and currently has more than three million users worldwide. This means three million potential customers! But – and this is the bit that really hurts – if you click on my films so that you can pay to watch them, you see the following message:

THIS FILM IS NOT AVAILABLE TO WATCH IN YOUR AREA

In a reality where we who come up with stories and transform them into film are constantly feeling the effects of the lack of earnings, I find it impossible to comprehend the logic behind this message. So I have to ask: dear studio executive, my colleague, to whom have you sold my rights, thus hindering legal access to my films? The least I could expect from having transferred all my rights to you must surely be that you explain to me where you are making more money and where you are spreading familiarity with my production in a better way. Can we really grant ourselves this luxury?

Let’s just leave that question out there for the moment, ignore the dizzying opportunities of the global reality, and turn our attention back to the national clip-clop. This is where the cinema window still rules, and where it is still considered a gilt-edged government bond, whereas it would be better compared to a scratchcard.

An average Danish feature film has a budget of around DKK 16–20 million, with studio investment of around DKK 3–4 million. A cinema ticket that costs DKK 80 will bring in – after deducting VAT and the cinema owner’s and distributor’s cuts – DKK 23 for the studio. From this income, the distributor is to have reimbursed his entire investment in the launch of the film, typically in the DKK 1–2 million range, before anything at all is allowed to trickle down to the lower levels of the chain. A quick calculation in which I assume that a distributor invests DKK 1.5 million, reveals that a total of 65,104 tickets have to be sold before the studio and the investors see so much as a cent. Figures from DFI show that only 51% of all the films screened in Danish cinemas in the period 2006–2010 sold more than 65,000 tickets. This puts the studios in a particularly precarious position, because their own DKK 3–4 million is still in jeopardy, so they have to move fast.

At the same time, however, there is an agreement in Denmark between studios, distributors and Biografejernes Forbund (The Danish Association of Cinema Owners), which guarantees cinema owners four months of what is known as “hold back” on the films. During this four-month period, the film can only be seen in cinemas, i.e. it cannot be purchased over the internet or on DVD. This results in a situation where films that, for commercial reasons, enjoy no more than a 2–3-week run in cinemas are quite simply shelved for months. Yep – shelved! And all the while exposure of the film peters out, the film itself is downloaded illegally – in fact, new surveys indicate that illegal downloads spike during the hold-back period – and the law-abiding population starts to turn its attention towards new films. By way of comparison, imagine the following scenario: a new rock album has been released on the radio and played on air for a couple of weeks. For four months after that, no-one is allowed to buy or listen to it in any other digital or physical format. Ridiculous or what? Unthinkable, actually. But that is the situation for Danish films.

And the consequences are obvious. Earlier this autumn, Peter Ålbæk Jensen announced that Zentropa is no longer in a position to invest in talent development and production with devil-may-care, film-world daring. This is causing ripples. In fact, viewed in isolation, it is nothing short of a disaster. More than a few of the prominent voices in Danish film were nurtured in the creative high-risk ambience of Zentropa’s old barracks buildings in Avedøre. With Zentropa now worshipping at the altar of mainstream film, focusing exclusively on sure-fire audience magnets, you have to wonder where we are to look for the development of the voices of the future in Danish film. I am not for a moment questioning the fact that the announcement is born of bitter necessity, but I have to question the remedy chosen – because the choice represents nothing less than fatalistic acceptance of conservative and archaic business models, which seek to make the treatment permanent.

Time and time again, the potency of Danish film has proved to be conditional upon choosing the daring path rather than the (assumed) safe bet. The films are supported financially by DFI because Danish politicians recognise what everyone who works in film already knows: a strong Danish film industry is utterly dependent on investment in these films in particular. Films that investigate, move and inspire thought processes in the film world are the ones that are to pave the way for future commercial successes. What is more, no-one really knows how big an audience they could have had if in recent years they had been marketed and sold in ways commensurate with the modern age. Because no-one is trying.

Whenever the time came to negotiate for public funds, artists cried out for more cash like a religious mantra. Personally, and against all tradition, I am seriously put out when my studio contacts meekly take on the role of co-signatory of a postcard to politicians and the general population with the simple message: “send more money”. When the director of SF distribution, in a comment to the possibility of setting up digital windows – i.e. VOD – says “it’s too expensive and too much trouble”. When the president of Biografejernes Forbund suggests that cinema owners who want to screen “the little films” should receive more funds from DFI. Or when the president and CEO of Nordisk Film wants a new subsidy scheme that rewards those films that already perform best at the box office. Many Danish film directors are rapidly losing patience with studios that fail to hit out and stand up to this arrogance. We are applying for funds from DFI without involving the studios, withholding our rights, setting up our own companies and investigating digital display formats and other ways to make contact with our audience via social media. Because we want to communicate. We want to meet our audience. It is the entire industry that needs to be re-educated and to understand the communication channels and distribution options that actually reach the audience in 2011. It is complicated because it is unfamiliar and costs both time and money – but that is always the case when staking out new territory.

My postcard to the studios says: Come back from the 1990s! Start making demands on our partners, get distributors who are hungry to explore new communication channels and who believe that films can and should be made available. Drop the tired old conventions, show a little faith in the future and stop whining! It’s unbearable.

Our common sanctification of all things cinema is the smoke screen that is clouding our eyes. But we make films for the audience – not for the silver screen. And when the silver screen is no longer the primary channel – which we may mourn, but have to accept – then we must welcome new channels. Let us start to look at the opportunities and break down the barriers. And let me start by pointing one out:

In Denmark, cinemas and film are inextricably intertwined. Not simply by convention, but also in practice. According to Section 2 of the Danish Film Act, DFI is obliged to:

  1. Provide financial support for the development, screenwriting, production, launching and screening of Danish films, and to ensure distribution of Danish films.
  2. To spread familiarity with Danish and foreign films in Denmark, and to promote the familiarity with – and sales of – Danish films abroad.

So far, so good. But if you carry on reading and examine DFI’s terms and conditions for support, i.e. DFI’s own interpretation of how the objectives in the Danish Film Act are to take form in practice, then you will see that the requirements for a studio’s application for production subsidy include an obligation for the studio to supply the following:  “A distribution agreement concerning cinema distribution in Denmark.”

Note the term “cinema distribution”, because this is where the wheels really come off. DFI cannot both spread familiarity with Danish film and simultaneously cling to the idea that films MUST be screened in cinemas. These are two diametrically opposed directions in a reality where, on the one hand, cinema owners are insisting on commercial freedom while on the other, they use the “hold back” clause to make it impossible for the public to access films through other channels. When you contact Biografejernes Forbund and plead for a solution in which, as soon as a film is no longer pulling in the crowds, cinema owners pick up the phone and call the studios and tell them that the film in question can now be released on DVD or as VOD, the answer is always “never going to happen”. The reason for this is that the cinema owners are afraid that people will stop going to the cinema if they get used to being able to buy access to films immediately on conclusion of their cinema run. Clip-clop, clip-clop. This shows a sad lack of confidence in the power of attraction of the unique experience that the cinema owners have chosen for their profession. And the situation became utterly grotesque recently when cinema owners and distributors signed a joint agreement which stipulated that films can only be screened on TV 12 months after finishing their cinema run.

The preferential treatment accorded to cinemas in the subsidy terms is protectionist, anti-competitive and out of step with the modern day media reality. The films are not being made legally available to the public to the greatest possible extent – either in Denmark or abroad – despite the fact that this is a requirement that comes with funds that Danish taxpayers pay to DFI as an art institution. It is a democratic problem, and the problem gets worse and worse the farther you travel away from Copenhagen.

The Danish Film Institute needs to take a long, hard look at its own subsidy terms and completely sever the ties between film subsidy and cinema screening. Only then can the films be set free. If this should create difficulties in relation to statutory orders and preconditions, then the Minister of Culture and the conciliation board need to step up to the plate. There is no need to feel sorry for the cinemas for losing their protected status – the inventive ones that find a way to take on the challenge are sure to survive. However, there is every reason to feel sorry for Danish film if the key to the audience and, indeed, the outside world, stays in the pocket of doormen who have no intention of opening the door.

Opportunities for bringing to life the beautiful ambitions in the Danish Film Act about reaching a wider audience have never been better. All you need is a 3 Mbit broadband connection. And this has long been standard equipment in almost all Danish homes. They are just waiting for us. So bring on this crisis in its full-blown 3D version. And for heaven’s sake don’t send any more money! Let the crisis do its worst and pave the way to new ideas and new players. Danish film should be an party open to everyone – we owe it that much.

Annette K Olesen, Film Director