The Commercial Case for Short Film

In 2018, I wrote an article that predicted (1) continued ascendance of podcasting as a medium, (2) the consumer and commercial rationales for podcasting in Emerging Markets, and (3) why Asia in particular would have its own podcasting revolution (you can find that article here).?

Recently revisiting this article, I looked at the 10 reasons cited for my predictions and note that they were on bullseye.? While the pandemic served as a tailwind for many digital consumer verticals, the post-pandemic drop-off in most of them was not felt in podcasting, which has continued to grow globally at an unabated 18% CAGR, outstripping both new mobile internet adds (10% CAGR) and 5G growth (10% CAGR outside JP and SK) over the same period. More customers are consuming more podcasts more often.?

This is also true in Asia including fickle Japan which generally lags other Developed Markets in the rate of adoption of digital story and knowledge-based consumer products (see: podcasting, paid OTT video, audio books - even as DVDs maintained in-market distribution up to recently).? While this is in part because of demographics (29.9% of the population is 60 and older, a cohort known to be slow adopters of new digital products), podcasting also requires in-market hosts/creators to be personally and publicly identifiable with a specific point of view, which is often culturally uncomfortable for Japanese people.

My review was prompted by checking how good my media crystal ball works as I see some parallels between the rise of podcasting and the potential of Short Film.

Short Film - as contrasted with Reels and the under 2-minute videos now dominant on the internet- is no longer limited to esoteric festivals, Film Schools and the art crowd.

The?Academy of Motion Picture Arts and Sciences defines a short film as "an original motion picture that has a running time of 40 minutes or less, including all credits, and is less than a feature film".? I think this represents a moderately analog and wholly outdated way of thinking, and prefer to define Short Film simply to contrast what most creators present in Reels and YouTube:? “any original video production that is scripted and consists of definable characters, a story, a conflict and a resolution” – in short (hah!), any scripted story told in video format that isn’t made by a major studio and can be consumed in 20 minutes or less. Customers do not care if the video is sanctioned or falls under some arcane definition, and both YouTube and TikTok present short form videos that would not be scripted and not fall under the definition of Short Film (though they do indeed present content that would be characterized as Short Film, and are helping to grow the format - more on that later).

As with podcasting, Short Film can be interwoven into the broader tapestry of modern lifestyles, and everything starts and ends with the Customer.? Our reduction in time to consume is not accompanied by reduction in demand for the experience overall;? people still want to see good stories told visually with good production value despite being time constrained, so something fills the gap.? Serials alone that break up a long form movie into digestible bits and often lower production value fill it only partially.? And the standing army of global individual creators have neither the resources nor the time to make a longer serial.

?There is a lot of content, good content in fact, and it’s a dimes-to-dollars bet that you have never seen or even heard of any of it.

So why do I think there could be a Renaissance of sorts in Short Film?

I.? Swim with the Tides - Internet & Tech Alignment

1.? The On-Demand World Intersects- and Merges - with Short Format Storytelling?

Internet economics, unit cost of distribution, and SVOD/AVOD models are well-known.? There is no reason that the “Festival Circuit” should be the sole distribution channel for the literally 20,000+ Short Films made globally each year.?Internet platforms of all kinds open up possibilities for marketing, awareness, and consumption that has not occurred before, which will expand the category.? I personally won’t go to a festival, but as a netizen interested in media, some of it has caught my eye and inspired me to think more about it.? Some of it is quite good and stands on its own merits.? Internet lends itself to discovery, incremental consumption, and multiple access and monetization models needed to propel Short Film past affcianadoes to build category.

2. ?Cost of Scripted Video Production is Coming Down

It is a rule-of-thumb that a Short Film costs $100K to get done ?- that is an industry heuristic quoted to me by 4 different veteran players, it does not have a strict criteria and I expect that the number can be higher or lower. I also expect that the number is meaningless as the cost of production continues to come down.? Cameras in your pocket, accesible digital editing tools that are easy for a director to self-master (enabling faster re-cut, production and post-pro costs), time savings and the ongoing reduction in cost for actors all continue to cut this cost by what I am also told is estimated at 50% (though to be fair in short film its generally a passion pursuit so actors fees do not absorb the lion’s share of cost).? What used to see an auteur needing to cobble together crowdsourced funding or friends & family resources has created lower threshholds to proceed, which should manifest in more content of equal or greater quality being created.? Sure enough, even under old school definitions, over 20,000 Short Films are produced globally each year, with a 5 year CAGR of 6-8%.? If we apply the new definition for the digital age as I suggest above, the number produced is far higher.

3.? Cost of Localization Coming Down

Cross-border content consumption is on the rise, even if Asia still prefers Asian produced stories and the West prefers theirs.? The sine qua non of deep cross-border penetration is localization, and these costs are likewise coming down.? The advent of AI driven online resources, crowd sourcing of subtitles (although there are QOS concerns in this track) and even professional quality subtitling has never been lower. And its likely to drop further as better LLM training over time will eradicate noticeable errors, improve colloquialism and creativity in the tools.

II. Trends in Customer Lifestyle Align to Short Film

4.? ?Certain Types of Environments Lend Themselves Better to Consumption?

Consumers are ever busier with ever more to consume -? parsing through it, discovery and a rapid and quality viewing CX all conspire to make a good story with good production told in 10 mins (vs 120) quite valuable, even preferable when out of living room, lean forward experiences, group experiences, place shifted experiences become important elements of consumption decisions.? Growth in apps/smartphones, 5G and more ubiquitous WiFi are girdering the structure.? It is the “I have 30 mins in the coffee shop after lunch to myself” moment vs. “I am going to watch Netflix on TV tonight for 2 hours.”? There are many more of the former than the latter, and directionally it will only become more pronounced.

5.? People Really Like Dramas – Short Film is a Good Format for It

Asian markets and Latin American markets in particular really like dramas.? In 2022, Korean drama production reached a peak of 160 dramas produced, ?up from 80 in 2000.? Netflix spent $500M in SK on original drama productions and in 2021 and will spend close to $1B ?this year (per Media Partners Asia). And that’s only one market.? By far the world’s most prolific producer of dramas is China.? Telenovellas, even per capita, does not even come close.? The ultimate point here is that certain types of stories lend themselves better to certain types of formats – and Short Film aligns well to dramas, a genre that remains tops on people’s lists.? A drama can unfold rapidly, leave an open ending if a storyteller so wants, introduce characters and play any one of a finite number of known and repeatable conflicts and ?resolution lines ?that somehow never get old– whereas stories in mysteries and crime dramas, horror and anime are inherently bespoke and require more than character development and short timeframes to make visual impact and conclude a story.? Dramas meld well with Short Film and most though not all Short Film falls in this category.

6.? Younger Gen Really Wants to Learn More about Other Cultures

Quite differently than academic interest in anthropology, there is a marked openness and eagerness in the under 35 generation to learn more about other cultures via their pop and to hunt for authenticity in doing so. Call it globalization wrought by the internet or other mechanisms, but it is palpable.? Short Film, with its scripted nature enables a real story that offers both a point of view of substance and a didactic consumption experience to occur.? Short video does not give the framework of scripting, visual of locations, precision of dialog, and enablement of story that can be culture-specific and tied to a director’s point of view that Short Film can provide.? From a search and discovery perspective, it enables rapid tickling of an interest, or if one accidentally meanders down a rabbit hole, to quickly escape from it. Auteurs can also construct their Short Films with this type of audience interest in mind.? The rise in cross-country consumption of Short Film, and expansion of localization, is an indication that this effect is growing.

7. ?Short Stories Tie Easily to Community Development?

Whereas long form content gears internet and media discussion around titles and creates celebrity, Short Film drives creation of online community and in-depth discussion of story. This could be because of the historically afficiando bent of the format lending itself to limited community interest, but the case is now that individual directors build followings and community begins to form around them and their stories.? Live online event watching is also an evolving element of the format, as Short Film is not as limited as long-form content from both a rights and time constraint points of view.? A shorter film leaves more time for community banter and formation in an offline / online tie-up as well.?

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III.? Intangibles Further the Case

8.?? The POC – American Idol Theorem

Data trumps all, even if usage in a Big Data sense has been a bit slower to evolve in storytelling and video creation than in other areas.? Short Film represents Enhanced Storytelling Incubation- a natural POC for creative concepts, characters, and storylines.? A scaled Short Film platform has the capability to de-risk investment in more expansive long-form content.? Over time, this data of customer voice will lend itself to how to expand CX around the content with new forms of immersive experiences (VR, etc) getting more intelligently tied into it. ??Overall, Short Film and aggregation platforms will enable cream to rise, with immediate QoS (quality of story) and QoP (quality of production) evident and rankable.?

9.? YT and IG are helping

For those who believed that YouTube and the visual Internet were stripping to zero the value of purely auditory media, podcasting proved them wrong.? I also believe it is wrong to think that Reels, YouTube Shorts, and related tonnage will likewise make scripted Short Film irrelevant. On the contrary, they are fueling growth of the medium, teaching a new generation of creators how to be succinct in developing a full end-to-end story in 20 minutes or less for consumers with ever limited time to consume but who still want a periodic lunchtime coffee shop interlude.? As the cost of production continues to come down, this will only inspire more to take their time and try their hand at crafting a Short Film, especially as there is an emerging path to monetization via these platforms– a path that likely disintermediates the Festival circuit. Creators get shafted in that matrix as only Film Schools and Festival Organizers make money alongside politically-inspired judging rather than Consumers at-large deciding merit.? YouTube in particular has taken a lead here, with a lot of Short Film now discoverable, consumable, and subscribeable on the platform.

Looking Ahead

Consensus estimates have the global value pool of video at well past $4.35T, and Short Film is today a rounding error in it.? I’m not as firm in my opinion about Short Film as I was for podcasting.? By way of analogy, Podcasts are to radio what VOD and SVOD were to broadcast linear channel video -??technology breaks-up linearity, creating a more consumer friendly, net consumer utility-building way of delivering the content that people actually want.???It also gives a self-standing business model to the long-tail without requiring mainstream consumer cross-subsidization.??And the net effect of that would be (and has been) more content production and more consumption.? There is no such analogy for Short Film – the opportunity is simply a reflection of real consumer love of stories told by video, a desire to see that in scripted high-quality format, and a persistent need for time savings leveled up against rapidly declining video production costs and a way for creators to make money.?

It is true that production costs remain more than a podcast for the same amount of consumer time, and are likely to stay that way even as AI tools and workflow tools can strip even more cost out of it.? As well, podcasts can be formed as an adjacent element of someone’s core economic endeavor whereas Short Film needs to make money by itself as a stand-alone proposition.? This means it is more critical for the content to generate money by itself which is of course harder in environments where content proliferates.?

But overall we can see the key ingredients of real opportunity rooted in lower production costs, use of data to de-risk decisions, and alignment to broader trends in customer behavior. I look for example at what SAMANSA* (https://samansa.com, short film platform in Japan) is doing and think “wow, that’s the right approach”:

1.???? gathering up all the best global short film licenses including Oscar winners and titles that simply have no exposure outside festivals and certainly not marketed,

2.???? building a global distribution platform (based on YT and their own apps),

3.???? localizing the content and CX end-to-end,

4.???? building out 3rd party offline and online partnerships that align a Short Film viewing experience with another product of experience for marketing purposes (eg “buy a Grande Latte and get a month subscription to Samansa”),

5.???? providing a scaling vehicle for auteurs to actually get paid,

6.???? creating adjacent experiences (live events, community) around titles and actors/directors,

7.???? driving a huge amount of data on what films (stories, scripts, characters, actors, directors) are liked by whom and for what reason, and

8.???? evolving their own production in partnership with the global auteur community (4 short films per quarter, including two I was invited to watch that are just awesome but have been forbidden to write about at this moment).

The early results of industry evolution are encouraging, and its worth keeping an eye on emerging ecosystem plays like SAMANSA who are actively solving the pain points, creating brand and destination, using their distribution platform to improve the investment case in Short Film content creation, and developing community-driven discovery focused CX around short film- to the delight of 200,000 MAUs in Japan alone who are demonstrating willingness to pay a small subscription for a curated and marketed CX.

This article was written without the assistance of ChatGBT or other AI technology.

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