Several years ago, I asked if the film industry knew their audience.  It’s a question that can be asked at virtually every level of the business as demonstrated last month during a panel discussion at the International Cinema Technology Association.

Of course, the presentation at the International Cinema Technology Association was primarily focused on exhibitor related issues.  Especially issues related to digital conversion, alternative content (for example, sports) and items at the concession stand.  For indie filmmakers, the second item might be the only interesting point.  After all, it’s not impossible (though it might seem to be) that a theater might host something like a Thursday night indie presentation.  Naturally, they would have to get distributors to loosen up on some of the strings attached to the standard first-run contract.  Unfortunately, most theaters would rather do something like the NBA playoff than indie movies  But it is a possibility.

There are other issues that go way beyond the exhibitors.  Heck, the whole foundation of theater distribution and exhibition is in the process of a massive radical change.  The exhibitors know this, and they really don’t have a clue about what to do.  I have no doubt that a recent post at mikejones.tv about the possible strength of viewer engagement through non-theatrical digital presentation (for example, laptop) is going to receive  a rousing Bronx cheer.   The piece makes a compelling argument, but nobody in the theater business wants to hear it at the moment.

What they do want to hear, or at least need to read, is the 2012 Theatrical Market Statistics just released by the Motion Picture Association of America.  Though it is targeted for exhibitors, this annual MPAA statistical review is one of the few comprehensive guides to the American film audience, which is why it is also studied by the entire industry.

So what do the figures tell us?  Overall, movie attendance increased in 2012.  OK, the increase was barely 6 per cent, which means that attendance has scored a very modest gain over what was a notable slump in 2011.  So the attendance figures are closer to an over all break even mark.  But these days that looks good.

The cost of movie tickets has increased marginally (0.03%) from 2011.  Well, sort of.  As The New York Times noted earlier this year, exhibitors waited until well into the 4^th quarter of 2012 before going after a steeper increase that is only half-reflected in the MPAA figures.  The current average ticket cost is $8.05 (standard projection) and rising.

On the other hand, movies are still a cheaper entertainment outing for a family of four (cost of $31.84) than such other activities as NFL games ($313.52 for four) and theme parks ($199).  Of course, these are just the ticket figures, and the MPAA always stacks the deck with big ticket items. A bowling night out might be a better point of comparison.  Once the family of four gets bushwhacked at the concession stand, you can easily add in an extra $50 to $70, and suddenly the MBL game looks cheaper at $107.92 (unless you live in Cleveland where they are starting to give tickets away).  Sure, the family could skip the concession stand, but then that would severely damage the theater business.  Hey, they don’t make their money off those tickets.

Mostly, the key figures suggest a soft market with a tiny glimmer of minor improvement largely produced by a few major successful movies (for example, The Avengers and three other films.  It could be seen as good news, but you don’t want to shout it from the roof.  A soft whisper in a small room will suffice.

The really interesting material is in the demographic section of the report.  In 2012, there was an increase in frequent moviegoers across all age ranges.  Three age ranges display very notable increases, though the MPAA assumes that the rise in the 40-49 age range is short-lived and only views the rises in the 18-24 and 25-39 ranges as meaningful trends.  Their reasoning has to do with the match between the relative size of different age groups and the frequencies of their movie-going habits.  For example, the 18-24 age range represents only 10% of the population but 21% of frequent moviegoers.  In the older demographics, size and frequency are reversed.

Yes, I know.  There is a self-fulfilling element at work here.  Most movies are made for the 18-24 range and the older audience often feels left out.  So the older audience goes less and they are then discounted in these type of studies when they do go.  Once in a blue moon, a movie is released for an older audience.  If it does well, everyone acts surprised and then goes back to chasing after the youngsters.  So this report does a neat job of reinforcing traditional wrong-headed thinking in the business.

Frequency by ethnicity is another interesting section.  Caucasians make up about 64% of the general population and they are 56% of all frequent moviegoers.  African-Americans are 12% of the general population and 11% of the population of frequent moviegoers. Hispanics are 17% and 26%, respectively, which suggests that a lot of Hispanics leave the theater just long enough to get back in line for another show.  The figures indicate that Hispanics are, long-term, a dependable audience.  You would think this reality would be more widely reflected the content and ethnic make up of film actors.  Largely, it isn’t.  Hispanics are like the older audience: there but easily forgotten.

Much the same is true of African-Americans and women. Ironically, women make up 52% of any given audience.  In fact, women make up the majority of the audience across all age ranges.  You wouldn’t know it from the young male structure of most major movies, but without the female audience, Hollywood would be lucky to get five fan boys in for a  matinee.

So inadvertently the MPAA is once again reminding us of the exclusionary nature of contemporary Hollywood cinema.  Lots of over-produced films designed for young male viewers that have to score big with an ethnically diverse pack of women aged 30 and up.

Is it just me, or is there something weird about this set-up?

Some people are still pondering the business market for DVDs. Guess they haven’t seen the memo. It’s over!  Kaput  The DVD is not yet dead, but it has been admitted into hospice. Various news agencies are already working on the obituary. It will eventually join the rank of such other great devices as the VHS cassette and the Laserdisc. I don’t think it will be a sudden death. More like a lingering decline (which is already well underway). But the end of the DVD format is in sight and the reasons are all pretty straightforward.

Technically, the format has long been iffy. It wasn’t supposed to be, but that thinking was based upon the presumed archival possibilities of DVDs.

The words “boobs” and “Academy Awards” have often appeared together in a sentence. Normally we have meant the non-anatomical meaning of boobs.

But not this year. In a pitch to a younger demographic audience model, the Oscar presentation went on a bumpy joy ride combining its usual institutional blandness with an occasional bitch slap at the audience. I don’t mean the TV audience. I mean the fancy-dressed folks sitting for more than three and a half hours like hostages in the Dolby Theatre.

I am not particularly interested in debating Seth MacFarlane’s handling of the hosting duties at the Oscars. Hosting this show has to be one of the most thankless jobs around. An Oscar host is expected to be a toothless court jester. They are suppose to spoof the business but not the egos as they provide biting commentary but only so long as they lack either bark or bite. No wonder Billy Crystal doesn’t want the lousy job.

To be honest, MacFarlane was better than David Letterman. But then, a colonoscopy was funnier than Letterman. Of course, I also thought that Chris Rock did a swell job back in 2005, so I am not speaking from a mainstream Academy perspective.

However, the fallout from this year’s Oscar presentation has been a singular spectacle. Granted, every Oscar show has its controversies, things like, “How did the movie Crash ever get nominated, less alone win” etc. But this past week most press reports have been so obsessed with women’s breasts and Anne Hathaway’s nipples, I’m beginning to confuse the Oscars with lunch at Hooters.

Low budget indie movies are hot.

That is supposedly the message from the recent Sundance Festival, where distribution purchase records were being set. Titles were being grabbed at $2.5 million (Fruitvale),  $4 million (both Austenland and Don Jon’s Addiction), and finally hitting the grand jackpot of $10 million for The Way, Way Back.

Are they sure this was Sundance? Sounds more like a sweepstake being worked by Ed McMahon. But hey, it’s a great boom for a few indie filmmakers. The question is: Does this help the indie business?

It certainly suggests a resurgence of interest in medium budget movies. Take for example The Way, Way Back. It’s not really low, low budget. It was directed by the two guys who previously scripted The Descendants, which means that they are not exactly newcomers. (If you count TV, they’ve been around for a while). It’s designed to be a slightly quirky, mildly feel-good, low key crowd pleaser.

In other words, it is the kind of movie that mainstream Hollywood use to make on a more regular basis several decades ago.  

We are already well into the second decade of the 21^st century and I still don’t have my own personal jet-pack or robot. Heck, I don’t even have a lousy iPhone.

But 2013 is almost here, and everyone is beginning to peek ahead at a coming year of changes within the film industry. Of course that means looking back at the immediate past in hopes of second-guessing the imminent future. It’s a tough call. 2012 feels a bit like the year when many of us were run over by a truck and we hadn’t even left the house.

The mainstream Hollywood film industry dominates the global market. The reason is best summed up at the beginning of a report from 2001 (Why Hollywood Rules the World, and Whether We Should Care). Back then, Hollywood still had “…the largest single home market for cinema in dollar terms …,” which gave it a huge base from which to operate.

That was then, this is now. That home field advantage is gone, replaced by a desperate need for the foreign marketplace. Today, a major Hollywood movie makes the majority of its box office overseas: between a 2-to-1 to even a 3-to-1 split. Without the foreign market, the typical Hollywood producer would be begging for lunch money at various street corners across Los Angeles.

You would think that this would make the foreign productions from the overseas marketplace of interest to Hollywood. Nah. Heck, everybody in Hollywood is busting a gut to get into the Chinese film biz but they have shown no particular interest in learning anything about the Chinese cinema. I can assure you that some of the folks in the industry are not even aware that there is a Chinese cinema (outside of a few Bruce Lee movies).

Privately, I have always suspected that this “trade deficit” in knowledge will become the Achilles Heel of the system. Unfortunately, the ignorance of Hollywood is strongly mirrored by the American audience, many of whom are also unaware of the Chinese cinema. Despite certain recent successes such as The Artist, foreign film distribution is basically dead in the United States, at the commercial level.

Which is why American film viewers have to seek out alternative venues for the foreign movie screen.

Sure, there are still a few theaters that specialize in foreign movies, and not all of them are in New York. A few are in Chicago. Some are hidden away in strange out of the way locations like the legendary Little Art Theater  in Yellow Springs, Ohio. But they are very few and extremely far between. This lack of outlet is a major reason for the sizable drop in distributors who will even deal with foreign movies.

Many art museums used to provide a range of ambitious film programs. Unfortunately, many of these programs got cut during the 1990s as part of an austerity move during that recession. (As opposed to all of the other recessions – by the way, when were we not having a recession?) But some still exist, and a few are even notable for actually doing the job of presenting movies that would otherwise be unavailable. Take for example the periodic movie programs offered by the Muskegon Museum of Art in Michigan. I recently discovered this series during a Google search for a particular foreign title and was pleasantly surprise to discover that someone up there is doing a solid job of programming.

With the basic collapse of any extensive distribution system in the States for foreign movies, alternative means have become incredibly important. Various private organizations devoted to the study and appreciation of various national cultures are extremely important in this regard.

One of the most prestigious and important examples of this is the Japan Society. Their current program, Japan Cuts 2012, offers a well curated presentation of the best in recent Japanese movie productions. They also maintain a regular series of touring film programs for American colleges and museums that provides a critically vital view of Japanese film history.

Likewise, the Goethe Institute in Washington, DC provides a similar service for contemporary German cinema. Also from the European scene, the cultural Services of the French Embassy in the US are currently hosting selected titles from the Tournées Festival. The program is making the rounds of over 80 campuses across the US and is a must for anyone lucky enough to be near one of the scheduled stops.

Foreign embassies have long been a source for international movies. Back in the 1980s, the only source in the US for most of the founding films of the Chinese Fifth Generation movement was the Office of Cultural Affairs at the Embassy of the People’s Republic in San Francisco. Likewise, the Netherlands Embassy distributes various programs on the Dutch cinema such as Dutch Voices: Jos De Putter and Peter Delpeut.

I should add a few personal notes about dealing with embassies to any ambitious film programmers. Language problems are pretty marginal since most embassies will have a staff that speaks English quite well. (Heck, at the Dutch embassy, they speak it better than we do!)  However, problems can sometimes occur. I gave up trying to correct the staff at the Italian Embassy, who kept insisting that my name was Denise Toast.

Geo-political issues should not intrude in your dealings with the staff of any embassy. Likewise, there should be no such thing as authentic imitation leather. You really don’t want to get into politics with the embassy staff but you also should be aware of any “issues” that might be going on with the country in question. Back in 1982, I contacted the Soviet embassy in Washington in hopes of gaining access to several films they were handling by Andrei Tarkovsky. It was a very cooperative conversation and everything seemed like a go. A week later, I called my contact at the embassy to finalize the details. I was slightly surprised to discover that he couldn’t recall talking with me; claimed to have no knowledge of any such movies; practically told me “Nyet! There is no Tarkovsky!” It seemed a tad odd.

The next day I got the news. Tarkovsky had just defected while in Italy. And I had probably just been on the phone with the KGB.

Summer is a time for daydreams. Bucolic months full of hopeful visions of the future.So why am I spending this summer sweating non-stop

in periodic blackouts caused by severe storms in a massive heat wave while my phone is ringing off the hook with every political candidate imaginable? There is something wrong with this picture.

Same could be said about the big picture regarding the current state of moving pictures. Almost everybody is looking for a silver lining somewhere within the storm clouds of 2012. Oh sure, there have been some highs and some lows. Mostly, the mainstream Hollywood market is being artificially supported by the international box office, which is now running at a 2 to 1 (or even 3 to 1) ratio to US ticket sales. Even so, this is often not enough for many of the big-budget movies to break even, but it at least gives the studios’ accountants a chance to pretend that the system is half sane.

Half sane is about as good as it gets. Currently, Hollywood is working hard at getting Chinese money into American movies so they can launch a major move into the Russian market. This is a complicated maneuver that involves a wide variety of highly sophisticated transactions. Does it make sense? Not really. Will it work? Heck no. Are they all crazy or simply stupid? Gee, do we have to pick just one?

Sure, the modern film market is extremely international. But most folks in Hollywood have no clue about this international thing except when they are looking to do a remake. Granted, Steven Spielberg has made a move toward mid-Atlantic status with The Adventures of Tintin and War Horse, and Martin Scorsese’s production of Hugo made a strong pitch to the European market, but mostly the overseas box office is currently more American in its tastes than the American market (hence the bizarre overseas success of Battleship).

But the Hollywood ability to dominate in these markets is based largely on a long-standing suppression of competition in the foreign marketplace. Heck, that has always been one of the major functions of the MPAA. During the height of the Cold War, Hollywood’s domination of the foreign market was practically considered a patriotic duty. We were importing our moral and cultural values overseas. Of course, it was also an American thing to make some money while you were at it. Kind of win-win in the good old days.

Now, it’s just about the money. Basically, it’s not even about Art or Entertainment or even audience taste. It’s all about lots of money thrown out there in the pursuit of lots of money wherever you can find it. The average major film is now costing around $150 to $250 million (plus publicity cost equal to production cost, which doubles the expense). The average overall box office take is around $300 to $500 million. Basically, the only real profit for most of these films is from TV and DVD release. But both of these markets are dwindling. But that’s OK. Most of the folks in Hollywood no longer have a clue about making a profit. They just like spending money. Wild spending has always been a potent aphrodisiac. Of course, they are also hoping that the Chinese will simply empty their bank accounts and then go away. This is one of the reasons why we cannot decide between crazy or stupid.

As always, a wistful hope is found within the indie cinema. In theory, the low-budget indie world still has a business model that makes sense. In principle, most indie movies are focused on being movies rather than visual effect extravaganzas. In reality, most indie films are pretty much screwed by the system before the cameras even roll.

Take the list of the most successful indie films of 2012 provided this week by IndieWire. For a brief moment, this list of 27 indie movies that have made over a million dollars this year could give a person a sigh of relief. It almost sounds as if business is good until you realize that most of these movies made just over a million, and a million these days ain’t much. Especially in a system that is now exclusively driven by the short-term effect of the opening weekend.

Indie movies require a slow approach to release, normally starting on two to four screens and moving to several hundred screens over a period of three to four weeks. If successful, an indie film will eventually be playing on anywhere from 400 to 500 screens in the US. Most small indie movies will only reach about 150 to 200 screens. Many will never get into the two digit range.

Since the average major Hollywood movie will open on 3,000 to 4,000 screens right at the start, they have a numerical advantage. This is half OK because these bloated elephants need as much space as they can grab. Likewise, they need long opening weekends. That’s why The Amazing Spider-Man has opened on July 3rd, because this sucker needs a six-day weekend to pump up the tickets. If only the same kind of thinking went into planning the work week for the rest of us.

But it means that everyone else is squeezed out in the pursuit of the big event presentation. In turn, the so-called big events are no longer particularly big or much of an event. The current list of blockbusters reads like a copy of TV Guide during rerun season. Heck, the biggest reason for going to the theater this summer is for the air conditioning, and most theaters are having to conserve on power, which means that it isn’t all that cool inside.

Instead, it may be a good summer to just go to the pool and lazily float in the tepid chill of chlorinated water. To dream. To reflect. Which is it, crazy or stupid? Do a few laps and then decide.

There is an important lesson to be learned from the lackluster opening weekend for Men in Black III (depending upon who is doing the counting, it took in $55 to $70 million — best real figures tend toward $55 million — which wouldn’t be too bad except the movie cost over $250 million to make). OK, personally I think the real lesson is that you shouldn’t be spending $200 plus million on making any dang film in the first place. But that simply tells you why I don’t work in Hollywood.

The core lesson is that when you are distributing a bloated tent-pole movie, you’ve got to open it first in the international market. Good grief, even before Battleship sank in the US, it managed to score a little over $230 million overseas. Heck, even The Avengers opened first on the international market and practically scored its first billion outside of the US.

For all practical purposes, the US has become a secondary marketplace to its own cinema. Sort of a curious pit stop before cable release. About the only national film market that is lower is in Swaziland, and these days I’m not even sure about that. So basically the modern Hollywood blockbuster epic is a movie with a completely out of control budget, packed full of American pop cultural attitudes and designed to play somewhere else. I suppose you could call this the Victory of the American Way, though I find the current system to be quite bizarre.

Granted, American pop culture has long been the common global language. As an American, I must confess that in many ways I don’t even have a major problem with our pop cultural dominance. Heck, I’m the kind of Yank who could easily spend part of a week in Paris seeking out the nearest McDonald’s (especially now that they have free wifi). But sometimes I have to wonder what is up with the rest of the planet. It’s proof positive of the comment near the end of the old Wim Wenders’ film Im Lauf der Zeit: “The Americans have colonized our subconscious.”

But these days, the issue has gotten stranger. That’s why I was especially intrigued by a recent article in The Guardian by Tom Shone. In “Memorial Day is a Time to Reflect on US Conquests and Failures — in Film,” Shone zeros in on how such an ubër-American exercise as Battleship did so well everywhere except in the US. In fact, even that flop of the year, John Carter, took in over $200 million in the foreign market. Not a bad haul for a nineteenth century patriotic Confederate hero on Mars.

What Shone discovers is the really wild contradictions of the current international market. Almost every single movie he deals with is strongly rooted in a very idealized presentation of American motives and desires. Sort of Norman Rockwell on steroids. This stuff is playing like gangbusters overseas, even in some countries that officially hate our guts (no, I am not referring to the French). But a lot of it just ain’t breaking any records with the mass American audience. The Avengers has been one of the few recent exceptions. Ironically, the decisively dystopian view of futuristic America in The Hunger Games practically blew the box office away in this country but is doing merely OK overseas.

Several things are going on at once. For the past few years, a type of trade imbalance has developed involving major Hollywood movies. The American box office has become extremely secondary to the international market, and Hollywood companies are increasingly having to shift their commercial focus to the overseas viewer. But this globalization of Hollywood has not resulted in a globalized cinema. The overseas market is currently displaying an appetite for big budget and extremely jingoistic American productions. Arguably, the overseas market for that type of material is way bigger than anything you can find here in the States. It’s almost as if Hollywood is having to outsource jingoism.

From a political/sociological viewpoint, this contradiction is damn near incoherent. From an economic perspective, it is already producing a series of increasingly ironic developments. Hollywood is a multi-billion dollar industry. But due to the massive cost overruns at virtually every level of the film industry, it is a business that works very hard to simply break even. Like sharks in the ocean, studio executives are constantly moving in search of fresh cash supplies.

Which is why so many studio execs are thrilled that the Chinese have arrived. The Dalian Wanda Group has slapped down $2.6 billion for the AMC chain of movie theaters as a beachhead for their intended move into Europe (notice that they are primarily focused on Europe). Meanwhile, Iron Man 3 will be a co-production of Walt Disney Studios and China’s DMG Entertainment company.

What does this mean? Who the heck knows. Though AMC is the second largest movie theater chain in America, it has been running deficits for the past couple of years. It is doubtful that the new owners will really be able to reverse the notable decline in American film-going habits. As for Iron Man 3, this sucker is turning into a full blown model of everything Shone discusses in his Guardian article. Most likely, the primary villain will be the Mandarin, sort of a cross between Fu Manchu and Doctor Doom and played by that well known Chinese actor Ben Kingsley (note to Birthers: though Kingsley is English born, his Indian father was actually born in Kenya).

Helping Iron Man as he flies to China will be the Iron Patriot, a chap whose own armored costume makes Captain America look subtle. The only way this could get any more bizarre would be if they stage a 4th of July Celebration in Mao’s Mausoleum.

Which gets back to what I said about Hollywood outsourcing its own brand of jingoism. Almost every aspect of these emerging deals is largely nonsensical. It’s as if a pack of executives who couldn’t find the Clue Bus have now hopped a ride on the Crazy Train.

There are more than seven billion people on this planet just waiting to give you advice. If you are an indie filmmaker, it will feel more like fourteen billion. And I’m not even including your mother.

With so many people handing out advice, you would think indie filmmakers feel especially blessed. However, I strongly suspect that they don’t. Since what I do with this blog is hand out lots of half-baked advice and pushy opinions, you can only imagine the conflict I must feel. OK, I’ll be honest and admit that there is no conflict and the great thing about handing out advice is that there are no strings attached. Not much profit, but certainly no strings.

Some of the currently available advice is actually good, with one of the more interesting being a recent post by Jason Brubaker at Film Slate Magazine. Titled “How to Make Your Movie Without the Middle-Man,” the post sets up a couple of interesting points just before he pitches his book Filmmaking Stuff: How to Make, Market and Sell Your Movie Without the Middleman. First thing you will notice is that Brubaker does not like the middleman (with or without the hyphen).

Brubaker is big on the concept of direct marketing of movies via the Internet. Notice that I just used a term that is not often invoked in discussions of VoD and internet distribution: Direct Marketing. If you are familiar with the commercial use of this term, you will know that it often carries a bit of a dubious rep. The reason is because a lot of direct marketing involves all of those annoying solicitation calls, spam emails and junk letters you get every day. That is the dark side of the concept. Unfortunately, the light side involves a lot of work that gets into a slightly similar vein (though now you get to use the “social networks,” which is certainly more respectable — sometimes).

But it is also one of the major alternative approaches being pursued by a wide variety of indie filmmakers. It has the advantage that you don’t have to deal with any middleman distribution companies. Except for taxes and expenses, you get to keep the money made through your film. You control the whole operation at every level. Gosh, does this sound like a swell exercise in rugged individualism or what?

To be honest, I am of two very conflicting minds on this issue. First-time filmmakers often go into distribution deals with a tremendous disadvantage. A good example is the original Night of the Living Dead. Back in 1968, the only way George A. Romero was able to get distribution for the movie was by cutting a deal with the Walter Reade Organization for less than $400. Since the company then proceeded to make a really stupid foul-up with the copyright and the movie went into public domain, that pathetic upfront payment has been the only dough Romero has ever seen from the most widely viewed horror movie of the modern age. Ironically, that is slightly more cash than many filmmakers have seen from their first movie.

So getting rid of the middleman sounds like a truly fantastic idea. Likewise, Internet distribution has come of age — technically speaking. However, a successful commercial model of this type of self-distribution is still a work in progress. An increasing number of indie filmmakers are working in this direction (and Brubaker’s book is a good starting point if you wish to pursue this), and eventually something is going to hit big, maybe. But it is a concept that is still in the developmental stage. It is also an approach that requires a lot of work. You know, like 18-hour days, 8 days a week. The staggering nature of this process is enough to make you pine for those greedy middlemen. You might even realize that some of these folks (the honest ones) actually do work for a living.

Of course that brings up the next question: Where do you go to find these middlemen? The first thought that occurs to many indie filmmakers is the film festival circuit. But before you go there, please take about seven minutes to check out the YouTube video You Cannot Rely on Film Festivals to Distribute Your Film by Jon Reiss, author of Think Outside of the Box Office and co-author of Selling Your Film Without Selling Your Soul.

As you watch Reiss’s presentation, pay close attention to the numbers he is unreeling. Thousands and thousands of movies ply their way through the film festival circuit every year. Only a very small percentage of these movies will ever get a distributor. Even then, only a small percentage will ever actually get distributed in any major sense. It plays like a culling process created by Thomas Hobbes, and it all feels harsh, brutal and short. Unfortunately, these are the successful titles. The unsuccessful movies simply vanish somewhere in the back of a UPS truck.

Which is why everybody keeps going back to the direct distribution idea. But trying to do it all is nearly impossible for many filmmakers. Fortunately, an ever-growing lineup of websites are emerging to provide indie filmmakers with a pre-established online distribution system. One interesting example of this type of service is EggUP, a growing company designed to guide filmmakers through various platforms and achieve an actual approach to monetization with their movies. Beyond the Box Office recently did an interview with Chris Lucero, Marketing Director of EggUP, that does a nice job of outlining the DIY model of distribution. Currently EggUP is averaging 10 to 50 downloads per day, which is low by web standards but not at all bad in the indie trade.

So there is my two-cents worth of advice this week. It’s all good advice. It’s all free advice. Hey wait a minute, I’ve got to find a way to charge for this stuff.

For all practical purposes, Phase One of the digital revolution is complete. Commercial film production is in the process of going all digital. Commercial film exhibition will do the same by the end of 2013. Likewise, streamed and VoD release is surpassing DVD rental and major retailers are shifting toward digital systems as a means of staying competitive. Digital movie distribution is not only rapidly expanding in the non-theatrical business but will eventually become the sole means for first-run theatrical presentation.

Phase Two is well under way. The Finnish movie Iron Sky is slated for worldwide release (including the US) this spring, making it already one of the most successful efforts yet at online feature filmmaking that combined a mix of traditional investors and crowdfunding sources, interactive production development with an international network of volunteers, and lots and lots of social media presentations.

More importantly, the first global hit has been achieved through digital production and distribution. In less than two weeks, the short documentary film KONY 2012 has scored over 78 million viewers on YouTube. This documentary has also scored lots of controversy, oodles of press attention and more viewers than an expensive space saga released in the same time period. Until KONY 2012, the average success rate of a straight-to-YouTube production has fluctuated between a couple of thousands to a bit over a million. Previous to this, one of the more successful online documentaries had been the Ridley Scott interactive creation of Life in a Day, which scored close to 5 million clicks.

Granted, KONY 2012 is less a documentary and more like that Humane Society of the United States TV ad that leaves everyone weeping. It has also garnered plenty of political criticism from both the Left and the Right. But I am not interested in the film from either an aesthetic or political position. I am addressing the phenomenon itself (which is extremely significant). After all, Disney would have sold its corporate soul to the devil for this large of an audience for the opening of John Carter.

The development of digital production and release has largely taken place under the radar. Most of the film industry is still primarily focused on the traditional model of production and distribution. Simultaneously, the industry is working on many individual components that are paving the way for the total digital approach (ironically, the drive toward 3D has been a huge force in this direction). Until recently, many in the industry thought that the unique collective experience of the movie theater would be strong enough to maintain some form of normative existence within the business. It is only now dawning on many people (especially theater owners) that this theory is wrong. Ironically, this mistake has been made by virtually every other commercial media industry imaginable (for example, newspapers and the music industry). This notion is sort of the Energizer Bunny of bad ideas.

Within a year (more or less), any theater that has not adapted to digital presentation will be gone. Oh sure, a few will try to hang in there as “museums” of “film art,” but access to non-digital material will quickly evaporate. Besides, most owners of theaters (including those who view themselves as running art theaters) are not capable of operating and programming for this type of structure under these extraordinary circumstances. At best, they would have to go for some type of non-profit organizational status based upon monies from civic and/or major business donations. No matter what, they will not ultimately have much to work with as the rest of the universe moves in a radically different direction. Quite literally, there will be no films.

Theatrical distribution is overwhelmingly controlled by the major Hollywood companies. They are hoping to do the same with digital distribution, which is a major reason for the development of the UltraViolet system. This is part of Hollywood’s “concern” about internet piracy (especially as they keep using that term as a catch-all for an increasingly wide range of digital activities — some of which are actually legal). Classic Hollywood existed due to a vertical and horizontal monopoly system. Modern Hollywood survives primarily because of this near-monopoly on distribution.

Which is why Phase Three of the digital revolution is of deep concern. Virtually all aspects of the industry are now dominated by the digital process. Likewise, a film can be produced and released with major viewing success via open digital systems, completely bypassing all levels of corporate Hollywood. With Phase Three, all emerging aspects of the digital process reach a state of total synthesis that results in a basically new and totally independent form of creative media. For want of a better term, we can call it the post-cinema future.

At first, it will be indistinguishable from the past. A collection of old forms in a new package. It will be a few years into Phase Three before people begin to notice the change. But we are now entering the most significant stage yet of media transmutation. All that has gone on before has merely been the beginning.

The real show is about to begin.