Berlin Film Festival 2013

No one makes documentaries to get rich. The renaissance of feature docs over the past decade has been driven by passion, not profit. But as the appetite for nonfiction grows, and low-budget crowd-pleasers such as “Searching for Sugar Man” rack up big numbers, some companies are finding that telling true stories can be good business, as well as good karma.

London-based Passion Pictures, which co-produced “Sugar Man” with its close ally Red Box Films, is thriving with a documentary slate of two to four films a year, budgeted frugally in the $800,000 to $1.75 milion range.

Passion was originally founded by topper Andrew Ruhemann as an animation house, and is still a big brand in that genre, winning an Oscar for its 2010 short “The Lost Thing.” It became one of the world’s leading nonfiction players somewhat by chance, after Ruhemann invited his old school friend, producer John Battsek, to join the company in the late 1990s.

Battsek’s mission was to make live-action features, but he and Ruhemann were both inspired by boxing doc “When We Were Kings” to try their hand at something similar, even though neither had any experience in nonfiction.

The result was Kevin Macdonald’s Oscar winner “One Day in September.” It established Passion as the go-to company for filmmakers seeking to emulate that success.

Passion followed “One Day in September” with a string of critical and occasionally commercial hits, including “The Tillman Story,” “Restrepo” and this year’s award contenders “Sugar Man” and “The Imposter.” Passion recently premiered its latest two films at Sundance — Greg Barker’s “Manhunt” and Nick Ryan’s “The Summit,” which Sundance Selects picked up at the fest.

“We were lucky in catching a wave, and being part of making that wave,” says Ruhemann. “We became experts, if not overnight then certainly over one production, in the niche area of feature of feature documentary, which was even more niche back then.”

Passion didn’t see much profit from “One Day in September” — “we made our fees, nothing on the back-end,” Ruhemann says. But the experience revealed to Ruhemann and Battsek how the creative satisfactions of documentaries could be matched by their commercial rewards.

“We discovered it was quite worthwhile compared to making a (fiction) movie, which takes seven times as long, risks anything from five to 50 times as much money, but with no guarantee that it will be any more financially rewarding at the end of it.”

Passion is just finishing its first dramatic feature, Macdonald’s “How I Live Now,” which has taken eight years to get made. During that time, the company has produced about 25 docs. Ruhemann and Battsek are in no doubt which business they prefer.

“When you amortize ‘How I Live Now’ over eight years, it’s laughable from a business point of view,” Ruhemann says. “With our documentary model, where we are at the top end of the game and commanding budgets in the $1 million range, if you can turn over three or four of those a year, that’s not a bad business. We get to make true stories that we hope matter, without struggling with the egos that exist in the feature business.”

Simon Chinn of Red Box joined forces with Passion to make “Project Nim” after his own Oscar-winning success with “Man on Wire.” “Project Nim” paid its investor back in full thanks to a big U.S. TV sale to HBO.

Swedish director Malik Bendjelloul cold-called Chinn for help with his project about the mysterious troubadour Rodriguez. “He was some way there, but floundering and losing momentum,” recalls Battsek. Chinn raised more money and brought a fresh creative impetus to complete “Sugar Man.” The Oscar-nominated pic is just starting its global rollout, but has already grossed over $1 million in Scandinavia, a spectacular figure for a doc, along with $3.1 million in the U.S.

One happy backer Chinn brought into “Sugar Man” was the Documentary Co., a boutique U.K. fund specializing in feature docs, founded by L.A.-based Scottish financier Maggie Montieth and U.K.-based producer Sheryl Crown. “Sugar Man” was its second project after the cricket doc “From the Ashes.” It invested about $70,000 of the $1 million budget.

“The reason the Documentary Co. is involved in financing documentaries is that we believe the stories can be entertaining, educational, informative, inspiring and get large audiences,” Crown says. “A documentary doesn’t need to make $20 million, sometimes it doesn’t even need to make $1 million — for investors it’s just about doing the sums correctly. Not every documentary needs to be big business, but it can be commercial when the value of a film is against weighed its cost.”

With budgets typically much lower than fiction, and public funders and other non-commercial investors providing a relatively high proportion of doc coin, an equity fund can negotiate a decent recoupment position. “One might be the only commercial equity in a finance plan,” Crown explains. As a result, she says, “money flows back more quickly than fiction, and it’s easier to recoup from world sales.”

Another nonfiction business model has been pioneered by Exclusive Media’s doc arm Spitfire Pictures, which made its name with docs about rock icons such as Bob Dylan, the Who, George Harrison, Billy Joel and the Foo Fighters. It branched into sport with last year’s Oscar winner “Undefeated” and its upcoming “Formula One.” “We won an Emmy, a Grammy and an Oscar in the same year, for three different films,” says Exclusive CEO Nigel Sinclair.

“The drive to make these films came from my fascination with music and pop culture,” Sinclair says. “Without that personal interest, we probably wouldn’t have started making them just for commercial motives. But then the commercial pressure forced me to think about what makes business sense, who is the audience and how do we make it pay.”

“Branded iconic entertainment acts have a natural audience,” he says. “The capital invested in documentaries is much smaller (than fiction), though of course in dollar terms the numbers are smaller, but nearly all our documentaries have had a reasonable return on investment. We make a fee on all of them, and either break even or make a small profit.”

Such subjects readily attract powerful co-production partners, such as HBO, the BBC, Australia’s Village Roadshow and Japan’s Pony Canyon.

But according to Sinclair, making these docs also delivers an intangible but vital upside for Exclusive’s wider business, which can’t be quantified in dollars. It builds external relationships with big-name filmmakers and corporate bosses who love the subjects of the films; and it feeds the creative culture within the company by giving younger staff something to cut their teeth on.

“Creativity is a balance sheet asset you can’t buy,” Sinclair says.

The U.K.’s Dogwoof started life as a struggling arthouse distirb, but has focused exclusively on nonfiction since releasing coffee doc “Black Gold” in 2006. “We found a new model,” recalls co-founder Anna Godas. “It came with several partners wanting to sponsor it, it was quite an easy film to market because it was about coffee and fair trade, it did well in cinemas and on DVD, so we thought, oh, maybe we should be doing more of this.”

Docs earn particularly well online, with Dogwoof’s best returns coming from iTunes and Netflix. Digital cinema has also boosted docs, allowing much more flexibility for one-off nationwide launch events as a promotional window to drive ancillary sales. “The documentaries we have released in cinemas do way better than those we don’t,” Godas says.

All this success is attracting a wider base of distributors and investors, which in turn is providing filmmakers with a bigger platform to explore larger and more ambitious subjects, and to push the creative boundaries of the documentary form.

“I definitely feel like the business is on the up, and it’s going to keep going,” Battsek concludes.

BERLIN FILM FESTIVAL 2013
Streaming brings boost to Berlin | Berlin films deliver diversity, box office | Lanzmann’s films bear witness for the future | Kosslick opens doors to global talent | New blood keeps EFM healthy | Big-name auteurs pepper Berlin lineup | Nonfiction payoff is for real | Germany remains a fav for co-productions

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