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Examining Kevin Smith’s Red State Self-Distribution Gamble

One man's attempt to change the face of film distribution

By Jeremiah Karpowicz | June 17, 2014

In January of 2011, Kevin Smith premiered Red State at the Sundance Film Festival. As with practically every film that’s screened at Sundance, filmmakers were there to show off their work in the hopes that one of the assembled distributors would purchase the film for a theatrical release. But in early 2011, Smith had something else in mind as he tried to turn traditional film distribution on its head.

Distributors showed up to Sundance that year as they do every year with the expectation that they’d be bidding for the distribution rights of the films that were being showcased. The dynamics of this system are interesting, because it means you have directors who have released major motion pictures competing with people who have maxed out their credit card to produce their passion project.  They might not be directly competing with each other, especially since films like Red State are non-competition features, but distributors nonetheless have a budget and know they can drive a harder bargain with some directors/producers than with others. As it turns out though, Smith was looking to drive the hardest bargain of anyone that year.

Created for 4 million dollars, distributors were likely happy with the margins around how much they’d need to spend marketing the film in order to turn a profit on Red State. Given Smith’s fan-base and the controversial nature of the film, it’s easy to imagine them figuring they could double or triple their investment. They probably had a number in mind that Smith could have lived with which would have allowed him to focus his efforts on his next film.

So imagine their surprise when Smith’s producer John Gordon announced the beginning of an auction for the distribution rights, and Smith himself bid $20. There likely were more than a few chuckles, but they probably stopped pretty quickly when Gordon yelled “Sold!”

Obviously this was Smith’s plan all along, as he stated he had no interest in seeing a distributor spend 20 million dollars marketing his 4 million dollar movie.  In fact, he said selling his film like that “would be like having a baby and then selling it to somebody else to raise,” and those were some of the kinder words he used when he talked about what he thought about traditional film distribution.  He even commented that he was giving us “Indie Film 2.0”, where filmmakers control and are responsible for more than just the creation of their film.  

Now, this isn't to say that Smith created this form of self-distribution. Going on the road to promote and bring people out to your movie has been something filmmakers have been doing for awhile, and the roots of this model go all the way back to vaudeville shows. That said, he was by far the biggest name director to approach distribution in this manner. Fairly or not, most people assume that filmmakers who self-distribute their film do so out of necessity rather than choice. That clearly was not the case for Smith, and that's the main reason it was such a big deal.

After word got out about what he had said and done, Smith received plenty of negative feedback from all sides. He fueled many of those reactions with comments like “you've lied to me many times” when speaking about those distributors. He also had to know that saying "this business bullshit should only be important to the investors," would rile up some of his fellow filmmakers since many of them view the business aspect of their films as an essential part of the process. One can imagine that it was equal parts anger and apathy that got Smith to make such comments, but none of that was as important as the fact that he was throwing everything he had behind the successful self-distribution of his film.

You can argue that Smith’s approach left something to be desired, but it's easy to see what got him to this way of thinking. He simply didn’t feel it made any sense to spend 5x more money on marketing a movie than was spent on making it. Smith also knew his movie had niche appeal, and while he was certainly proud of it and expected people to like it, he knew he wasn’t making the next Spider-Man movie. He’d attract an audience as he always did, but spending money on a billboard or commercial didn’t make much sense because the sort of people that are drawn in by such things wouldn’t be interested in Red State.

What’s more, by giving up distribution rights he’d be allowing others to profit from his film if it became a run-away success. By taking out the distributors, Smith felt he could eliminate the middleman and get his product to his audience while keeping the fate of his movie under his control. The traditional film distribution system didn’t make sense for Smith, and he intended to blow the whole thing up. Smith figured he’d rely on a more powerful method of marketing that would mean he got to keep a much larger percentage of the profit, even if the total profits wouldn’t be as much. Having this smaller pie was better than getting a slice of a larger one.

That much more powerful method of marketing is a key factor in all of this though. Undoubtedly, Smith was hoping genuine buzz and word-of-mouth would promote the film, but his fan-base and podcast network were the main avenues he knew he could use to market his film. Smith’s Smodcast Network features numerous podcasts which could all promote the movie, and he knew he had a fan-base that would support any film he created.  

His comments about “Indie 2.0” seem to indicate he was looking at how this could affect the industry as a whole, but his fan-base and podcast network are things other indie directors wouldn’t necessarily be able to rely on.  That’s not a criticism so much as a fact. Smith has built up his fan-base over the past twenty years and has put in an incredible amount of energy and effort into his podcast network, so there's nothing wrong with him leveraging both to help this endeavor succeed. He probably wasn't too concerned about these details anyway. If this worked, the model would theoretically be there for others to emulate, even if they didn’t have built-in fans or a podcast network.

There were plenty of people who wondered whether audiences would be willing to pay $60 to see a movie, even if it did include a Q&A with the creatives. And then there were others who simply wanted to see him fail because he had thumbed his nose in their faces.  But Smith was not to be denied, and he moved forward with his ambitious plan in the spring and summer of 2011.

And the results, critically and commercially, were…mixed. The domestic box office return for the movie was paltry, but that was never where the bulk or even much of the revenue was supposed to come from. Smith claims the movie turned a profit, and based on the numbers he throws out there it sounds like the movie pulled in somewhere between 6-8 million in revenue, which would give him a nice little profit.

Regardless of what those numbers look like, you have to remember that’s after what must have been an exhaustive tour of the country plus an impossible to quantify marketing campaign via his Smodcast network. It might not be fair to lambast Smith for relying on his fan-base and network to fuel this venture, but it’s a key factor in figuring out whether or not this is a viable way to distribute a film in 2014 and beyond.

That’s a relevant question to consider, because Smith himself doesn’t seem to think it is. After all, A24 is distributing Smith’s next film, Tusk. I haven’t found any statements from Smith talking through why he chose to distribute Tusk in this traditional manner but you have to think it’s because the returns from Red State were not worth the effort he put into it. My estimate of 6-8 million in revenue would have put him well into the black, but it's impossible to compare that to what his profit would look like if the film were traditionally distributed. It's easy to imagine the box office total for a wide theatrical release coming in a bit higher, but that goes back to having a smaller pie versus getting a slice of a larger one.

And remember, that’s with a fan-base that Smith has built over the past twenty years. That’s with a podcast network that he engages with on an almost daily basis. That’s with the fame that comes from working with big name actors like Ben Affleck and Seth Rogen…but it seems like all of that still wasn’t enough. If that’s the case, then what chance would a true indie filmmaker have of ever being able to successfully distribute a film in this manner?

Of course, all of that is ignoring the most important part of this equation, which is the film itself.  Red State received mixed reviews and never had the same impact as Smith’s own Clerks. You get the sense that the people who were going to see this movie were always going to see it, and that was about as far as it ever went.  But what if the movie had appealed to a wider audience? If the original Blair Witch Project had been distributed in this manner, would it still have been the same cultural and economic phenomenon? Or would it have been an even bigger one?

Smith is on record as saying it took seven years for the $30,000 Clerks to turn a profit, but what if he had self-distributed that movie? He would have been forced to rely on the movie itself as the main selling point…and of course, that’s exactly how he was able to break through in 1994 with Clerks.  But how quickly would it have turned a profit if he had self-distributed it, which meant the people who wanted to see it needed to spend $50 on a ticket? Or would it have ever turned a profit at all?

This self-distribution model Smith attempted to pioneer with Red State relies on getting more money from your biggest fans, and it’s a concept that many businesses adhere to. The old maxim says 20% of your customers’ produce 80% of your sales. So if a Kevin Smith fan is willing to pay $10 to see his film in a theater, they’ll be willing to pay $60 to see them in a more personal setting, right?

Kevin Smith certainly thought so, but the fact that Tusk is being distributed traditionally seems to crush that notion.  Whether he doesn’t have enough fans, or people aren’t willing to pay that much for 3 plus hours of entertainment, or Red State was simply the wrong movie to try this out on is a moot point. Smith had and still has support for this model but has chosen not to use it for his latest effort.

This self-distribution concept wasn't a totally new one, but Smith's actions are still significant. Filmmakers might be leery of attempting something like this without the support of a fan-base, but for an unknown director it could be a great way to create and cultivate one.  This method also sees money go into and stay in the hands of the filmmakers. That’s an appealing concept regardless of the risks or pitfalls. If a filmmaker was able to utilize this method along with a crowd-funded campaign, imagine how successful the entire effort could be.

Smith’s experiment could help take away any stigmas that exist around self-distribution. The fact he isn't using the model for his latest work shouldn't be viewed as a sign that it was a failure, merely that the numbers don't make sense for him. His actions could change the way filmmakers of all sizes consider distribution. Or what he did could be viewed as the filmmakers’ equivalent of Charlie Sheen’s “My Violent Torpedo of Truth: Defeat is Not an Option” Tour, although at least Smith doesn’t seem to be nearly as insatiable in terms of his brand or penchant for excess. Then again, maybe he's actually worse in that regard.

Calling his effort a "success" or "failure" is a matter of opinion and perspective, but it isn't what's important. In a world where studios only seem interested in reboots and sequels, you have to give him credit for trying to pioneer a new paradigm, even if it ended up being a paradigm that doesn't work for him.

 

 



 

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Comments

ThatKevinSmith: | June, 19, 2014

Hi! It’s me: @ThatKevinSmith! Just wanted to pop in to say a) I liked your article, and b) I need to correct your article.

TUSK is not the first flick I’ve distributed since RED STATE. We used the Red State road show distribution method again (successfully) last year for JAY & SILENT BOB’S SUPER GROOVY CARTOON MOVIE (now on VOD and iTunes). We conducted the tour the same way we did with RED STATE, but at smaller venues (though double the amount of gigs overall). We’re doing a few more road dates with the same flick in the UK in two weeks ( http://seesmod.com/overseas/ ).

While the RED STATE road show was successful for SModCo, we figured a micro-budgeted movie using the same model (with 0 dollars spent in marketing) would be WAY more lucrative. So the next time we went out on the road with a flick (SUPER GROOVY CARTOON MOVIE), we were able to get the uncomfortable financial side of the show business equation out of the way even sooner, so we could enjoy all the fun of direct-distributing a flick to the fans. Since SUPER GROOVY cost a mere $69k to produce, we were in profit after the first screening.

As regards TUSK, I got my financing from a company called Demarest. One of the first things they wanted to know before they agreed to finance TUSK was if I was gonna okay with traditional distribution. I told them yes, so long as it was a smart, cost-conscious distributor like A24. So Demarest paired up with A24 and XYZ Films (who sold TUSK abroad) and I had a budget for TUSK.

I love self-distribution. We’re planning a SMODCAST: SMOLY BIBLE tour for later next year, where we take out another low-budget cartoon from director Steve Stark. And when Jason Mewes finally directs his first feature, we’ll tour that as well. And the next time I make a movie for 2 million or less, I’ll tour that first THEN sell it to a distributor - just to mix things up a little. Because if you’re gonna call yourself an indie filmmaker, you’ve gotta try new things to keep shit interesting for yourself, and hence, for the audience.

As for the shit I took around RED STATE… Anybody first through a door is gonna catch a few bullets. Or to put it in a more Rimbaud-y way, to arrive at an unknown, sometimes you gotta make yourself an outcast. Touring RED STATE eventually led to making TUSK. Everything is connected.

Anyway, thanks for thinking of me!

Kevin

Jeremiah Karpowicz: | June, 21, 2014

Thanks Kevin! Very cool to get some clarification around a few of the items I mentioned, especially your decision about distribution for TUSK.

I personally think self-distribution can be a viable way for filmmakers of all sizes to distribute their films, and the more info we can give them around how it can make sense for them the better. I wish the media had been as loud about JAY & SILENT BOB’S SUPER GROOVY CARTOON MOVIE as they were about RED STATE, but such is life…

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