For the purpose of creating a sales portfolio for my Strategic Selling course at the University of Calgary, I decided to examine the local company — Calgary Underground Film Festival.

Industry Profile

The Calgary Underground Fim Festival (CUFF) falls under two sectors in the Film Industry: Festivals & Major Events and Motion Picture & Video Exhibition (aka Film Exhibition), which includes festivals with or without facilities, indoor theatres and drive-in screenings. Like other film festivals, CUFF does not involve in the production or the distribution of motion pictures, but their public screening for paying customers in a theatre.

On average, the annual revenue of Film exhibitors’ in Canada ranges from $30,000 to $5,000,000. In 2019, the Film Exhibition sector in Canada generated $1.87 billion in GDP. (Telefilm, 2019). Cineplex Inc., the dominant player of the exhibitor industry, which also drives industry performance, typically accounts for almost 60% of the domestic market (IBISWorld, 2020). The performance of this sector largely depends on the success or failure of major film releases. Although per capita disposable income directly influences households’ ability to spend on discretionary services, such as movies, the marketing efforts and popularity of films strongly determine revenue, since movie-going is a relatively low-cost entertainment option. (IBISWorld, 2020).

The most prestigious film festivals in the world, known as the Big Three, are Cannes, Venice, and Berlin. Respectively, over 70% of the world’s film festivals are hosted in North America (62.6% in the USA and 5.5% in Canada). In Alberta, from a total of 59 film exhibition establishments, 13 are film festivals. TIFF (Toronto International Film Festival), Canada’s largest Film Festival, runs annually in September. CIFF (Calgary International Film Festival), Alberta’s largest film festival, runs consecutively after TIFF in September and CUFF, Western Canada’s premiere genre festival, runs during the months of April and November, thus not directly competing with other local Film Festivals.

Market Value

In terms of the value chain that operates in the film sector, Film Festivals are an integral element of the film sector ecosystem and often play a key role in mediating the transactions between independent filmmakers and distributors and broadcasters. Because exhibitors to some extent control how films are programmed, promoted and presented to the public, they have considerable influence over the box-office success and, more importantly, the reception of films. (Film Reference, 2020).

Essentially, distributors and studio executives attend festivals looking for talent. They’re either looking for films to pick up and distribute or for directors to hire for future projects. For example, Colin Trevorrow made the independent film “Safety Not Guaranteed” for $750,000. When he brought the film to the Sundance Film Festival (USA’s largest indie Film Festival), he and his film caught the eye of Hollywood studio bigwigs that later asked him to direct Jurassic World, with a budget of $150 million.

Pandemic Crisis

The film industry has been highly impacted by the global pandemic COVID-19. Since the industry’s performance is dependent on consumers being able to congregate in enclosed areas, the decline in revenue is expected to persist until social distancing and quarantine measures are relaxed. Nonetheless, with many domestic consumes expected to have pent-up demand following the alleviation of quarantine measures, IBISWorld analysts expect demand for industry services to surge once conditions normalize.

Financial Streams

In recent years, many of the film festivals that traditionally acted as markets for the selling of independent productions to distributors, have evolved into a more sophisticated marketing and sales operations. In addition to acting as a hub for industry practitioners to engage with each other and filmmakers, now festivals are often a means of building word-of-mouth and interest by actively cultivating audiences ahead of a theatrical release, where a combination of ticket sales, membership fees, and corporate sponsorships constituting the majority of the revenue.

• Government and Public Fundings: Like other nonprofits art organizations (performing arts, museums, etc.), CUFF operates on a nonprofit model and receives donations from both the public and government funding such as Alberta Foundation for the Arts and Calgary Arts Development.
• Film Submission (Entry Fee): An essential part of running a film festival is being able to attract new films to screen each year. The more prestigious the festival is, the more filmmakers will submit their film. Today most festivals charge filmmakers a submission fee when they send their film in to be considered. These fees offset the cost of reviewing films, and for many festivals are an essential part of their economic survival. For filmmakers, the value of being accepted by a Film Festival lies in the potential of getting a distribution deal on their festival film or a deal on a new film, in addition to the chance of winning prize money. For example, the Cannes Prize ‘Un Certain Regard’ is designed for young filmmakers and comes with a 30,000-euro award. The winner in the Un Certain Regard category also gets a grant to assist with film distribution.
• Corporate Sponsorships: Sponsoring a film festival is the opportunity to promote a brand to the festival’s audiences in exchange for a cash contribution. Many marketers recognize that festival sponsorships provide major brand enhancement and visibility. The bigger the festival, the more competition there is for sponsorship rights. From presence on festival’s sponsorship page and social media to captivating ads on the big screen and branded gift bags distributed to attendees; brands have a variety of creative and impactful ways to activate film festival attendees. For example, the Cannes Festival reportedly charges brands up to $50,000 for being a gifting suite sponsor. Gavin Keilly, CEO of the event and marketing company GBK, which ran the 2013 Cannes luxury gift lounge, said that the sponsoring brand “received the equivalent of $2.3 million in advertising after spending $50,000 with GBK on gifting suites.”

Company Profile

Founded in 2003, The Calgary Underground Film Festival (CUFF) is Western Canada’s Premiere Genre Festival held annually mid of April at the classic movie house, Globe Cinema, in downtown Calgary. CUFF also runs CUFF.Docs, an International Documentary Festival in November, as well as Off the CUFF series, special event screenings throughout the year.

CUFF has had steady growth over the past five years. In 2019 attendance increased by 11% with 7,600 attendees over the 7 days of the festival, making CUFF 2019 the biggest in CUFF’s 17-year history. In 2020, due to the COVID-19 pandemic CUFF revamped its 7-day festival to a virtual event, showcasing a mix of live events and streaming a full lineup of new titles on the festival circuit, in addition to two nights of drive-in screenings at Big Rock Brewery.

Product Profile

CUFF’s value proposition is “Western Canada’s premiere genre festival and one of Calgary’s most anticipated events for film fans”.

Unlike major theatre chains, CUFF is a local indie film festival dedicated to defying convention by showcasing new boundary-breaking independent films. CUFF’s rich selection includes must-see international feature, documentary, animation and shorts in all genres — from horror, sci-fi and fantasy to comedies, thrillers and musicals.

In addition to the festival’s films, CUFF is known for its highly engaging panel discussions and Q&A sessions with local and international indie filmmakers. Lastly, CUFF is also on iTune where past festival films can be bought or rented.

Current Pricing:
Drive-in screening: $30
CUFF iTune rent: $0.99
CUFF iTune buy: ranges from $4.99–14.99
CUFF.Docs: $10/single admission ($8 for CUFF members)
CUFF.Docs: $45/5 bundle

Competitor Profile

CUFF has three main competitors:

1. Subscription video-on-demand (SVOD) and video-on-demand (TVOD) platforms. The increasing popularity of online subscription streaming services such as Netflix, Amazon Prime, in addition to media piracy has been the reason for the decline in theatre attendance, mainly within the younger demographic.
   Current Pricing:
   The average revenue per user is $150 annually
2. Cineplex and Landmark, world-leading exhibitors, offer Hollywood blockbuster movies. They have more advanced screen technology (IMAX 3D), full recliner seating, more food selection in concession, event facilities, arcade and amusement.
   Current Pricing:
   General Admission $14.95
   Rent: from $4.99
   Buy: from $26.99
3. Bigger and more popular festivals screening the same movies on the same festival circuit.
   CIFF’s Current Pricing:
   $11/single admission (compared to $15–17 in 2019)
   $45/5 bundle

Why CUFF?

• CUFF is Western Canada’s #1 Premiere Genre Festival
• CUFF has been dedicated to elevating Calgary’s cultural and artistic landscape for more than 17 years
• CUFF has Alberta’s most renowned film curators in the film industry and they are leaving no stone unturned to bring to Calgary most obscure gems in cinema
• CUFF has the most obscure selection of the best international independents features, documentaries, animations and shorts in all genres
• CUFF is affordable and inclusive — lowest price guaranteed for most quality of films in town
• CUFF’s films are thought-provoking and encourage healthy dialogue — confirm and challenge beliefs, promoting a sense of wonder and a healthy skepticism
• CUFF brings a unique opportunity to meet the people behind the lens through panel discussions and Q&A’s
• CUFF’s nostalgic, old cinema vibe is irreplicable
• CUFF is a community of Calgary’s most fun, eclectic and sophisticated circles
• CUFF has fun year-round community events and drive-ins across the city

Prospect Profile

After so many months of social distancing, people are itching for the human connection. Therefore, film exhibitors like CUFF need to focus their marketing and strategic selling on the benefits of leaving the house to watch films while reassuring the safey in doing so.

CUFF can also concentrate its effort on new sponsorships prospects that may be interested in hosting drive-in events such as local breweries. Since many local businesses are struggling with the reduced number of customers these days, selling concession food for outdoor drive-in screenings can help offset that while providing an added benefit to customers and maintaining the COVID-19 health guidelines.

CUFF can also propose doing a special combo offering with local food chains and restaurants offering Food Delivery+CUFF Movie on iTunes as it will help entice new customers on both ends.

Lastly, since the pandemic is an on-going situation, CUFF can look into employing some old-school tactics such as direct mail for ticket sales. The tactile and more personalized experience of flipping through a movie catalogue will not only stand out from today’s over digitization but will also provide a more tactile experience many are craving for.

References

CUFF. (2020). About CUFF. Retrieved from: https://www.calgaryundergroundfilm.org/about-cuff

DeVries, Henry. (2020). How To Find New Clients During Pandemic. Forbes. Retrieved from: https://www.forbes.com/sites/henrydevries/2020/07/28/how-to-find-new-clients-during-pandemic/?subId3=xid:fr1595999649017acc#16f11ef7545a

Advameg. (2020). Exhibition. Film Reference. Retrieved from:
http://www.filmreference.com/encyclopedia/Criticism-Ideology/Exhibition.html

Kohn, Eric. (2019). Here’s How Movie Theatres Will Survive the Next 10 Years: Exhibitors Speak Out. IndieWire. Retrieved from: https://www.indiewire.com/2019/06/movie-exhibition-distribution-future-1202152832/

Canada, Telefilm. (2020). Profile 2019 — Economic Report on the screen-based media production industry in Canada 2019. Telefilm Canada. Retrieved from: https://telefilm.ca/en/studies/profile-2019-economic-report-on-the-screen-based-media-production-industry-in-canada-2019

Ruthven, Eliza. (2018). Picture This: Cinemas Push Back Against Online Alternatives. IBISWorld. Retrieved from: https://www.ibisworld.com/industry-insider/analyst-insights/picture-this-cinemas-push-back-against-online-alternatives

Josephson, Amelia. (2018). The Economics of Film Festivals. Smartasset. Retrieved from: https://smartasset.com/investing/the-economics-of-film-festivals

Babych, Stephanie. (2020). Movie theatres reopen with limited seating, enhanced cleaning and lower ticket prices. Calgary Herald. Retrieved from: https://calgaryherald.com/news/local-news/movie-theatres-to-reopen-with-limited-seating-enhanced-cleaning-and-lower-ticket-prices

IBISWorld. (2020). Movie Theatres in Canada — Market Research Report. IBISWorld. Retrieved from: https://www.ibisworld.com/canada/market-research-reports/movie-theatres-industry/