Demand Film looks to tap equity crowdfunding for expansion
Cinema on-demand operator Demand Film aims to raise a seven-figure sum via an equity crowdfunding platform to accelerate its global roll-out and ramp up the volume of releases.
Co-founder and MD David Doepel is confident its 110,000 customers, of whom 40,000 are in Australia, will respond to the opportunity to buy shares in the company which launched in 2014.
Today it invited expressions of interest via Birchal.com but the precise sum it is seeking won’t be revealed until the formal launch of the equity crowdfunding campaign in about three weeks.
Doepel tells IF the goal is to raise somewhere between $1 million and $2 million by June 30, which would dilute the stakes held by himself and co-founders Andrew Hazelton and Barbara Connell.
“We will have a smaller slice of a bigger pie as we add more territories and put more money into releasing and marketing films,” he says.
The firm currently operates in seven territories: Australia, New Zealand, the US, Canada, the UK and Ireland and Germany. The plan is to double that by the end of 2020, initially in Italy, Spain and Scandinavia, followed by other Euro markets and Latin America.
It has deals with 2,500 cinemas including all the major and larger independent circuits in Oz, AMC and Regal Cinemas in the US, the UK’s Odeon and Canada’s Cineplex. About 25 per cent of the business is generated in Australasia, the balance in the rest of the world, with Canada as the biggest growth market. Entry to Scandinavia will come via the AMC-owned Nordic Cinema Group.
The platform also has a simplified Chinese-language capability which it plans to use to book screenings for the Chinese diaspora.
It offers independent films the opportunity to screen in cinemas by crowd-sourcing an audience through its web platform, filling empty seats on the quietest nights of the week with movies that appeal to specific audiences.
In return, the firm keeps the percentage of the box office receipts after paying the cinemas and filmmakers and covering the costs of digital delivery, and it gets a percentage of the ticket fee.
Hazelton, who is spearheading the North American expansion, says: “Any member of the public can host a screening of one of our films at any one of the 2,500 cinemas in our global network. They then work with our team and use our online tools to crowd-source an audience. If there is enough demand, the screening happens.
“For the filmmaker this de-risks the whole process of putting films in theatres. In other words, every screening is profitable or it doesn’t go ahead.”
Doepel adds: “The event screening business generated a reported gross box office of almost $500 million in 2018 with a 6 per cent annual growth rate. It’s a small fraction of the overall global box office but it is growing faster than traditional cinema and shows no sign of slowing down.”
‘The Dawn Wall.’
Its most popular title is MAMIL (Middle Aged Men in Lycra!), Nickolas Bird and Eleanor Sharpe’s cycling documentary, with a global gross of $400,000.
Bird says: “David and Andrew are part of an exciting platform which adds diversity to the landscape and films are now produced and seen that otherwise would not have been.”
The next biggest is The Dawn Wall, a feature doc which follows US climbers Tommy Caldwell and Kevin Jorgeson as they take on the challenge of free-climbing Yosemite’s most formidable rock formation, which made $383,000.
The Bikes of Wrath, Cameron Ford and Charlie Turnbull’s film which follows five Australian friends as they attempt to cycle from Oklahoma to California in honour of the road trip undertaken by the Joad family of John Steinbeck’s novel The Grapes of Wrath, has grossed $192,000 and is still going.
Richard Todd’s Frackman, the saga of farmer Dayne Pratsky’s fight to have coal seam gas removed from his land, generated $147,000 via crowd-sourcing plus $21,000 from traditional cinemas and $192,000 from sponsored screenings and a Good Pitch-supported tour.
Doepel had high hopes for Todd’s Dying to Live, which spotlights people who are awaiting life-saving organs, but the subject proved challenging and it earned less than $45,000.
In an unusual ploy, the firm is facilitating previews from June 12 of Defend, Conserve, Protect, Stephen Amis’ feature doc which examines the long-running campaign led by the Sea Shepherd organisation to stop Japanese fishermen killing whales in the Southern Ocean.
That’s in advance of the theatrical release via executive producer Tait Brady’s Label of the film narrated by Canadian actor Dan Aykroyd which looks at events from the whales’ point of view.
As Demand Film grows Doepel hopes to reward shareholders financially via dividends and/or what he terms a liquidity event: the company going public or being taken over.