Multi-platform funding strategies for bottom-tier films in small domestic media markets: Boy (2010) as a New Zealand case study

Abstract

Bottom-tier films, those productions that are made with the domestic audience foremost in mind, can face significant economic challenges when confronted with a small domestic media market. Drawing on a review of academic literature and findings derived from policy analysis, archival research and interviews, this article takes an institutional political economy perspective to illustrate how Boy (2010), despite being the highest grossing New Zealand feature at the domestic box office of all times, was economically unsuccessful for its filmmakers. As a result, Boy’s filmmakers needed to turn to an online crowd-funding platform, Kickstarter, to raise the means necessary for the film’s international (American) release. This article attempts to make a further contribution in industry structure and change in communication, media management and film studies, with special emphasis on multi-platform distribution cash flow, new revenue models and value chain.

Keywords:

• crowd-funding
• motion pictures industry
• New Zealand
• political economy
• value chain
• feature film

Acknowledgements

The author would like to thank Dr Trisha Dunleavy and Dr Peter Thompson for their support in the preparation of this article.

Notes

1 A case study has proved particularly useful for its “emphasis on understanding processes alongside their … contexts” (Hartley, 2004, p. 324).

2 The NZFC was established in 1978 as the main public funder for films in New Zealand, whose central remit is to “encourage, participate and assist in the making, promotion, distribution and exhibition of films” made in New Zealand by New Zealanders on New Zealand subjects (NZFC, 1978).

3. It also contributes to the significant opportunity costs of local productions versus international imports.

4. This, however, needs to be further investigated. The problematic reception of cultural specificity on the part of audiences unfamiliar with those cultural details is notoriously complex and difficult to objectively measure.

5. Apart from the classification system. “Under the Films, Videos, and Publications Classification Act 1993, films which receive an unrestricted rating (G, PG, or M) in Australia are automatically cross-rated to receive the same rating in New Zealand… Therefore the majority of unrestricted films do not come to the Classification Office” and can therefore be automatically distributed in New Zealand (OFLC, 2012).

6. However, Lee and Bae (2004, p. 163) suggest that a quota system may not always be an effective mechanism to protect the domestic film market and industry. In the same direction Pardo and Sánchez-Tabernero (2012) advise that a quota system, at least in Europe, is becoming inefficient. In other words, a quota system does not achieve the offsetting of opportunity costs.

7. Official website: http://boythefilm.com

8. Precisely NZ$9,296,740M (Moore, 2013).

9. The exact details of the distribution deal are unknown, as it remains unpublished by the NZFC due to being commercially sensitive data.

10. This option was suggested by one of the most acclaimed New Zealand producers.

11. These deals usually change week-by-week. For instance, the first week the exhibitor might get 55% while the distributor 45%, second week 50–50%, third week 45–55%, and so on. Because “the percentage of box office receipts paid to the distributor decreases” week after week, the exhibitor has an incentive “to keep the film in the theatre for a longer period of time” (Blume, 2004, p. 337).

12. MPAA used to release the average marketing costs for films in their annual Theatrical Market Statistics Report. Nevertheless, when the recession started in 2008, they stopped this practice. The average marketing cost of a studio movie back in 2007 (the last year available) was US$36 million (MPAA, 2007). Nevertheless, these figures do not account for smaller films. The NZFC provides a P&A grant to domestic distributors of New Zealand feature films. The average P&A grant during 2011–2012 was NZ$39,693.75 per film [NZ$676,325 is the total cost of P&A grants paid to distributors; 12 films accessed the NZFC P&A grant] (NZFC, 2012, p. 12).

13. The exhibitor’s share might have been higher due to the risk associated in releasing a feature film from a rather unknown New Zealand filmmaker.

14. This figure has been calculated dividing the total domestic box office with the average cinema admission price (NZ$9,296,740M /NZ$15.43 = 602.510 people).

15. This figure has been calculated taking 4.5 million as the total New Zealand population (602.510 × 100/4.5M = 13.38%).

16. This figure has been calculated taking 13.38% of US 300 million population, and the same cinema admission price (13.38 × 100/300 = 4.46 million people in the United States. Possible box office: 4.46M × $15.43 = $68.82 gross box office). However, it is likely that the first copy cost in the United States would have been higher considering, for instance, New Zealand wages.

17. The United States, Canada, Australia, Sweden, Iceland, Poland, Turkey, Israel and Spain.

18. Many cinemas require advertising as a pre-requisite for accepting to screen a feature film (Berney, 2004).

19. The New Zealand crowd-funding platform equivalent is www.pledgeme.co.nz

20. Full project description here: http://www.kickstarter.com/projects/18395296/boy-the-american-release

21. You can read the full interview here: http://blog.seattlepi.com/peoplescritic/2012/03/25/qa-with-director-taika-waititi/

22. Most of the funding raised was used to cover advertising costs and prints for theatres (Kickstarter Team, 2012).

23. A further breakdown is unfortunately not possible due to commercially sensitive reasons.

24. This figure has been calculated considering 300 million as the total population of the United States (1826 × 100/300M = 0.0006%).

25. This figure has been calculated dividing the total amount collected thanks to the Kickstarter campaign with the total number of backers (US$110,796/1826 = US$60.68).

26. This figure has been calculated considering 4.5 million as the total New Zealand population (0.0006 × 4.5M/100 = 0.000027M = 27 people).

27. Twenty-seven people × US$60.68 = US$1,638.36.

Additional information

Notes on contributors

Natàlia Ferrer-Roca

Natàlia Ferrer-Roca is a scholar with a strong international background. Her PhD in Media Studies from Victoria University of Wellington (New Zealand) focused on contemporary New Zealand feature film production, policies and institutional structures. She holds an MA in Communications Policy (Distinction) from Westminster University (London, UK) and a degree in Journalism and Business from the Autonomous University of Barcelona (UAB). She is also Associate Editor of The Place Brand Observer (http://placebrandobserver.com).