Foxcatcher and Eternal Sunshine Of The Spotless Mind producer Anthony Bregman delivered a wide-ranging keynote yesterday at the EFM in Berlin on the subject of algorithms and how Netflix has disrupted the film business.
Delivering the industry keynote ‘Future Proofing Film Production and Finance,’ Bregman, Chairman of the Independent Filmmaker Project (IFP) Board of Directors, said that the reason Netflix managed to disrupt the film business so successfully is because they use a more sophisticated and better algorithm than the studios when deciding which films to green light.
For much of his keynote speech, the Likely Story President and CEO, spoke with a definition of algorithm on the white board behind him. He claimed that Netflix changed the game because they would pick up films rejected by studios at the same budget and make successes out of them.
Bregman said that every film is made because of algorithms, “Algorithms have always dictated what was made. But algorithms pre-Netflix were not as sophisticated and based on less data and maybe based on the perception of data and maybe on fantasy and desires.”
He singled out for criticism some industry perceptions around diversity, “We have always had to swallow the algorithm that tells us that movies with actors with dark skin don’t perform world wide.” He said we now know this is not true because both Moonlight and Black Panther broke that algorithm. He complained, “Imagine now, what kind of movies we didn’t make for the past 25 years. What were the movies that we could have made that we didn’t because we bought into an algorithm that is not true.”
He also said there had been a tendency among some studio executives for short-sightedness in unpicking what films would be successful, basing their decisions on only the very latest available data, “Many algorithms were made on the Monday after the opening weekend. Tonnes of times when I talked to studios, an executive would say we are looking for a mid-budget romantic comedy starring Mel Gibson. People were actually on the prowl for that. What do you have that we could give to Mel Gibson?” The whimsical nature of these sentiments meant, “Those algorithms usually lasted for 2 weeks.”
He went on to deliver a case study based on Ang Lee’s Berlinale Golden Bear winner The Wedding Banquet. He joked, “Ang Lee’s Chinese-American gay green-card romantic comedy, just what the world wanted in 1993.” A few days before the film went into production the budget was slashed in half from $1.5 million to $750,000. The producers Ted Hope, James Schamus and Ang Lee managed to cut days and keep the film in production and when it was invited to the Berlin Film Festival to be in competition, Good Machine, which was nearly bankrupt, offered all the U.S. distributors the rights for $25,000.
“We showed them the film, they came the saw, and they all passed,” he said. After the film won the Golden Bear, “The very same distributors that had passed on the film for domestic distribution at $25000 started a bidding war driving the U.S. price up to the $750,000 it finally sold to the Samuel Goldwyn Company.”
Netflix have changed the game because they have “100M to 150M viewers across different age groups and gender make ups, ethnicities and economic levels and artistic taste,” he continued. The viewing habits generate data that Netflix uses to guide which films, “they want to make, who they want to make it with and what budget and how they sell it.”
Bregman added that “The problem with the international sales business has always been that everyone runs the same numbers, there is no variation.” The problem is compounded because all of the companies act like they know what the numbers mean when they don’t.
“With Private Life when we took it out of the studio everyone said the same thing, valuing it at a number that was too low for us to make the movie correctly,” he said. “The problem has always been that the sales numbers do not reflect the business and the arrival of Netflix as a disrupter changes that because they have their own way of valuing things and it has created chaos in this business and that is a good thing, because we can get movies like Private Life made, and we are now shooting four movies with Netflix this year, and movies I don’t know if they will get financed elsewhere.”
Following his address, Bregman was joined on stage by Linda Beath, founder of Ideal Filmworks Italia and Silver Reel film producer Claudia Bluemhuber, whose recent credits include Oscar nominees Loving Vincent and The Wife.
Bluemhuber said that one way the industry needs to change is in the assumption that every project has to be a film. Silver Reel is currently in production on a six-part series adaptation of the Man Booker prize-winning novel The Luminaries with Working Title and BBC. “I don’t think in these categories anymore. There can be people out there with their smartphone and it can go viral. It can be five minutes, 10 minutes, 30 minutes, or 60 minutes or you can have a feature, I think we need to stop thinking in these categories.”
Beath argued that the advantage of working with Netflix is that, “Once they work with you, they want to know what you are doing next. It’s not the other way around anymore.”