How to Succeed with Film Production in the Regions?

Work in the film industry is organized around projects and informal personal networks, and is often referred to as a network organization (Hirsch 1972, Jones 1996). Several studies show that reputation, successful performances, track record, and strength of ties are important to succeed (DeFillippi & Arthur 1998, Jones & DeFillippi 1996). Ekerhovd gained recognition when she produced the Palme d’Or winner Sniffer (directed by Bobbie Peers), Best Short Film in Cannes 2006. Her reputation as a skilled producer appears to be an important reason for Mer Film’s success and resulted in the co-production of the film Everything will be fine (2015), directed by the internationally acclaimed German director Wim Wenders. Ekerhovd had collaborated with scriptwriter Bjorn Olaf Johannessen on the movie Dirk Ohm, and they simply extended their work together when Wenders’s production company, Neue Road Movies, developed Johannessen’s new script.

The mission of Mer Film is “to develop and produce Norwegian and international art-house films by directors with a personal artistic vision”.

See http://www.merfilm.no/about-merfilm/. Accessed 28.10.15.

Like Mer Film, Filmbin focuses on artistic ambitious projects, and they want to make ‘films with meaning’. Producer Trine Aadalen Lo argues that to make an impact on children and youth is one way of defining success:

After producing the film The tough guys, we received letters from schools and kids, who thanked us for making a film that puts bullying on the agenda. That made me feel that we had succeeded.

For Filmbin, the choice of genre distinguished it from most other companies when it established itself in Lillehammer in 2004. At that time, few other companies in Norway specialised in films for children and young people. Films for children were a priority in the governmental film policy statement known as “Veiviseren” [Pathfinder] which came in 2007, but few such films followed its release. NFI director Nina Refseth stated in 2012 to the film magazine Rushprint that the institute typically received few applications for the production of films for children.

See http://rushprint.no/2012/05/for-fa-barnefilmsoknader/. Accessed 03.11.15.

The companies’ choices of genre can be seen as a strategy aimed at financial sustainability – Mer Film produces art house films, while Filmbin makes films for children and youth, and both specialties have good support structures. NFI has funds for the development and production of artistic films and a film with unique artistic potential can receive grants for up to 85 per cent of its development, production and promotion costs. Children’s movies can receive up to NOK nine million in ‘etterhåndsstøtte’ [ex post support], while other films can receive a maximum of seven million. All Norwegian feature films that sell more than 35.000 tickets at the cinema are eligible for ex post support. This type of support is designed to compensate for the fact that Norway is a small market, and that Norwegian films have a limited chance of success on the international market. Support is equal to 100 per cent of the producer’s net income, or 200 per cent for films for children.

See http://www.nfi.no/bransje/vare-tilskuddsordninger/kinofilm/etterhandstilskudd. Accessed 09.02.16

Both companies also keep few employees as permanent staff and hire more people during project periods, a normal practice in the movie business that keeps costs low (DeFillippi & Arthur 2002). The disadvantage of this, of course, is that the knowledge and resources that accompany a typical project team are not available between projects.

In addition to reputation, track record and choice of genre, both companies have some advantages based on their geographical location. Mer Film interviewees noted that it is part of their strategy to use the Bergen and Tromsø region as a starting point for choosing collaborators and the kind of stories they want to tell. This local, not-Oslo focus is also a means of distinguishing the company. The employees at Filmbin always introduce the company as Filmbin from Lillehammer. While place is evidently an important part of the branding process, it also represents a financial and creative resource. As regional film companies, Mer Film and Filmbin have access to sources of financial support that are unavailable to companies in Oslo, including regional film funds and film centers, but also private funding that is locally inclined. Knowledge of application procedures and guidelines for funding is important to these companies. Film projects rely on public funding, and both Mer Film and Filmbin survive largely with revenues gained during a given production period.

Place also provides some creative advantages. Both companies enjoy superior access to regional talents, compelling scenery and region-based stories, and both staffs expressed the sense of feeling relatively unfettered by whatever might be happening in Oslo. In an industry that prizes innovation and originality, this free thinking can be very helpful. They take advantage of local talents, locations and stories, but also think global when it comes to networking, co-production, and distribution.

Lastly, regional film companies can contribute to place promotion, which in turn promotes them as well – an example of this is the television series Lilyhammer (Kongsrud 2013), which brought attention to Lillehammer itself, and therefore, to an extent, to Filmbin.

Mer Film’s networking happens regionally, in that they consistently link up with local talents, but it also has a strong international aspect. Examples include the aforementioned co-productions with film director Wim Wenders, and the fact that Mexican NDM, the distribution company of acclaimed filmmaker Carlos Reygadas, distributed the Mer Film movie Out of Nature internationally. Networking, both regionally and internationally, allow the company to reach a wider audience, improve earnings and build its brand. Art house drama is the genre that achieves the widest circulation in Europe, as well, which is advantageous to Mer Film (Bondebjerg & Redvall 2011: 11).

Strategic networks can provide a company with access to information, resources, markets and technologies (Zaheer et al. 2000). Ekerhovd stated in the film magazine Cinema that Wenders opened doors for Mer Film (Johnsen 2013). Other productive collaborations have involved scriptwriters who connected Mer Film to other companies; Mer Film’s participation in international film festivals and active pursuit of international film company collaborators; and Ekerhovd’s participation in ‘Producers on the move’ at Cannes in 2011, a talent program that promotes producers and helps them to establish contacts and networks. Olsberg (2012) describes international cooperation as a key factor of success in film, because the film industry is a global industry and the domestic market is not often large enough to recoup the costs of making a film. As a result, international co-productions have increased in Norway in recent years (Ryssevik 2014: 30).

When Filmbin was established in Lillehammer in 2004, the film business was virtually nonexistent there, and politicians and local businesspeople were supportive. The filmmakers rented an office at an affordable price, and they received useful business consulting services. As the business grew up around Filmbin, it remained mutually supportive and regionally focused: “We look at each other as colleagues, not competitors”, says Christian Lo of the film community in Lillehammer (interview). Filmbanken, which opened in 2012, is a building in Lillehammer that now houses eleven companies related to the film- and television business, including a regional film center and regional film fund. Filmbanken acts as a meeting place and Filmbin’s Aadalen Lo underlines a commitment to stay local whenever possible (interview). For example, Filmbin hired Film-makeriet, a company based in Filmbanken, to create a ‘behind the movie’ documentary when it shot the film The tough guys. Shared objectives, reciprocity and trust are aspects of social capital, and especially of those networks where participants have the same goals, have something to give one another, and expect to use one another (Fukuyama 1995, Runyan et al. 2006: 461).

Social capital has provided competitive advantages for Filmbin, and they contribute to the development of social capital by exchange of services and information. When Filmbin produced its first feature film, Rafiki, in 2009, only 20 per cent of those involved, were from the region. Four years later, when they produced The tough guys, 80 per cent of the film workers were from the area. Producer Aadalen Lo further notes that it is profitable to use local film workers, as they save NOK 50,000 per person in the budget. To hire non-local film workers represents more travel expenses and hotel costs. In addition, Filmbin enhanced the competence of local film workers by having the courage to give them new tasks. In the big picture, company staff members think this competence will strengthen the region as a film centre, which will also be beneficial to Filmbin. On a short-term basis, the company received a financial windfall, and a long-term benefit is that it now has more local film workers with experience from feature film production. Filmbin’s commitment to the local film business could be described as innovative; it involves trust, risk taking, and using human resources in new ways (Wiklund 2006).

According to Olsberg, the ability to take a share of revenues generated by successful content is the single most important factor in determining a company’s potential for sustainability and growth (Olsberg 2012: 10). To this point, none of Mer Film or Filmbin’s movies have generated profits that can be invested in new projects, meaning that the companies must continue to secure funding from external sources. According to Bondebjerg and Redvall, the film industry will need to be proactive and develop new strategies, rather than falling back on what they call traditional, defensive strategies (2011: 11). The traditional market window system that has a film shown first in theaters, then via DVD, pay TV and free TV, is changing, because new digital viewing platforms have disrupted DVD sales in particular and led to loss of revenue for distribution companies. As a result, the distribution companies are less willing to take chances. It is now more difficult for the production companies to get the distribution companies interested in distributing their films. In Filmbin’s case, it decided to postpone the film project From mice to men in 2014. They were supposed to shoot over the summer but put the project on hold when the distributor pulled out.

Filmbin has chosen not to base their income solely on feature film production. Contract work gives them a steady supply of capital and is lower in risk than the development and production of films (Olsberg 2012: 11). Because of Filmbin’s risk diversification strategy, they can lean financially on other assignments.

Although the companies are artistically motivated, they need to survive financially. Chan-Olmsted (2008: 170–171) describes strategic entrepreneurship as the way in which companies use their resources to seize opportunities that give them competitive advantages. Although all staff members at Mer Film discuss strategies, Ekerhovd has the last word. An entrepreneurial strategy, after all, derives from “the central actor’s concept of his or her organization’s place in its world. This is coupled with an ability to impose that vision on the organization through his or her personal control of its actions” (Mintzberg & Waters 1985: 260). At Mer Film, for example, Ekerhovd has hired a financial manager, which allows her to concentrate on the creative work and thereby increases the efficiency of the company. This might not sound very innovative, but many production companies are run by people without specific economic or financial expertise (Olsberg 2012: 12). Mer Film also established three companies instead of one. With one company in Bergen and one in Tromsø, Mer Film can apply for funding from regional institutions in both areas. Mer Film is also no longer dependent on other distributors, because it started its own distribution company, Mer Filmdistribusjon, in 2015. This decision was based on both artistic and financial needs. By distributing its own films, Mer Film is able to represent a project that it has cultivated from the idea stage. An external distributor, on the other hand, usually arrives later in the process and has many films to handle.

The idea came from Mer Film’s experience with the film Out of nature, which included a project position funded by Introfondet in Tromsø and Innovation Norway. Mer Film decided to see whether it could make more money on a film if it distributed the film itself. According to statistics from Film og Kino, the film sold over twenty thousand tickets, which the company saw as satisfying compared to their calculations.

Although Mer Film is not the first company to both produce and distribute films, it is a proactive and innovative arrangement that involves risk taking, and it reflects the adaptability and flexibility of the company. It took advantage of subsidies that provided funding for a pilot project to test whether distribution was something it would pursue, which made starting up the actual distribution company a less risky proposition. According to De Paoli and Hansen (2010), business support for cultural entrepreneurs has not functioned well in Norway, because the cultural sector responds differently from other sectors. According to Bille (2013: 169), one might well wonder “whether it is right to stimulate the cultural sector actively for the purpose of business development, as the industries have low earnings, and only a few are able to make money”. Other researchers have pointed out that small companies are often quick to see and exploit new market opportunities, but they are often hard pressed to sustain this advantage over time (Chan-Olmsted 2008, Dean et al. 1998). Whether Mer Film will succeed with the distribution company over a long term remains to be seen.

According to Olsberg, it is important for film companies to have a strong and dynamic leader who has a vision of how the company should be developed (2012: 12). Mer Film’s Maria Ekerhovd is a clear leader figure who dictates its vision. Ekerhovd has managed to cultivate trust within the company staff, which shares her interest in creating artistically ambitious movies – what they describe as her competence makes them want to work for her and Mer Film. When asked why Mer Film has thrived, finance and administrative officer Siv Dyb Wangsmo says:

Maria is the main reason. She has a strong inner compass, or intuition, on what works, plus she is very hardworking. And she takes every bit of this company very seriously, and follows up the people who are involved. Because she gives so much she also expects a lot from people around her. It is easy to be engaged by her

According to Schein (2010: 219), the founder of a company has the greatest impact on its organisational culture, and her employees do indicate that Ekerhovd is good at delegating, and that they learn a lot from her. Each person on staff represents Mer Film at festivals, which is a way to demonstrate the company’s strength and foster a sense of ownership and attachment to the company.

Filmbin, interestingly, does not have a leader. Three of the four employees started the company, and all four are currently co-owners. The staff has cultivated an egalitarian mindset, with a flat organisational structure that allows each of them a voice. According to Tryggestad, this has both advantages and disadvantages: “Sometimes it is a bit inefficient, because everyone can express their meaning about everything, but it’s very useful also that everyone can speculate about everything” (interview). This degree of autonomy and validation can motivate good creative work. Olsberg (2012: 12), however, observes that many film companies are owned and driven by creative individuals “whose principal talents and experience lie in the business of bringing individual film projects to fruition. It is not always the case that these same individuals will have the knowledge and experience to push forward the company's growth because these are essentially different things”. As long as the staff is in agreement, a flat structure works. When there are differences, on the other hand, processes can take more time, because no single person has the authority to make a final decision.

The employees of both companies are relatively self-motivated and know what to do. Few employees mean that every person is important, and because the work can change quickly, these companies rely on flexibility as well. Mer Film’s Siv Dyb Wangsmo, for example, usually works in finance and administration, but occasionally in other areas: “Sometimes there is much more use for someone who can obtain fake snow, than there is for someone who can sit with the budget” (interview). She experiences this as a positive aspect of her position, and it shows that she shares the values of the company and has an understanding of how people work in the film business. This flexibility also enables Ekerhovd to include the finance person in the creative work of filmmaking. There is a culture of sharing and an emphasis on fast communication. Some researchers have pointed out that there is a lack of training in small business because these companies are not concerned with growth, or are simply too busy trying to survive (Fuller-Love 2006). I have found instead that the companies have a “learning by doing” approach, and the organisational culture consists of shared and largely unspoken understandings. If these understandings emerge from the company’s strategies and dovetail with the professional environment, the company will be more likely to succeed (Küng 2008: 173).