Setting the Bar: GKIDS Aims High with a Passion for Indie Animated Feature Distribution

With two independent animated features, My Life as a Zucchini and The Red Turtle, vying for Oscar gold this coming weekend, the Motion Picture Academy has once again demonstrated its fondness for small budget, auteur-driven 2D films right up alongside big CG animation studio offerings from folks like Disney, Pixar and Illumination.

Even independent juggernaut LAIKA -- nominated this year for both best animated feature and feature film visual effects -- produces films with significantly more resources than the typical co-produced indie animated film. With strong box-office hits like Finding Dory, Secret Life of Pets and Sing passed over this Oscar season, Academy members continue to recognize more obscure styles of animated storytelling and creative excellence with their votes. Independent features, usually from Europe or Asia, cobbled together with various international finance and production resources, are getting more and more exposure through art-house cinema distribution promoted more directly to animation fans through social media and positive word of mouth. The reasons are varied and open for debate. But for many in the business, independent animation offers more intimate and stimulating experiences than they often find with an increasingly committee-driven CG-powered sameness.

Enter Eric Beckman and Dave Jesteadt, CEO and president, respectively, of GKIDS, the New York-based independent animated feature film distributor that has brought films like The Secret of Kells, A Cat in Paris, Ernest & Celestine and the current Oscar hopeful, My Life as a Zucchini, to U.S. audiences. Since 2009, GKIDS films have been nominated for Best Animated Feature an astonishing nine times.

With a humble beginning starting the non-profit New York International Children’s Film Festival, Beckman eventually split off GKIDS as a for-profit distribution company and soon thereafter, joined by Jesteadt, started bringing an eclectic and well-regarded selection of top independent animated features, including many Studio Ghibli titles, to North America. AWN had a chance to talk with both Beckman and Jesteadt about the distribution business, their strategies and plans, how they choose films to license and the inherent challenges of getting films into theatres and people into seats.

AWN: How did you get into the distribution business? What brought you to the world of Indie animated feature distribution?

Eric Beckman: Generally speaking, the focus of what we do is find films we like and then try to share what we like about the films with people in North America. The origins were that many, many, many moons ago I started the New York International Children’s Film Festival. From very early on, the festival became a showcase for really exceptional animation -- Miyazaki films, Michel Ocelot -- a lot of really wonderful films. We had a pretty deep knowledge of and increasing relationships with people in the animation world.

Once the festival was pretty well established, we made the decision to split into two organizations: a non-profit film festival and a for-profit distribution company, which was actually launched initially as a digital platform in 2007. Theatrical was always a part of our game plan. We did Sita Sings the Blues (2008), but the first animated film that we really bought and owned all the rights to was The Secret of Kells (2009). That got an Oscar nomination.

After The Secret of Kells we decided to focus on animation solely instead of children’s films. We were cautious on our early pickups -- I was still deeply involved in running the film festival back then, so I had my hands full. Dave came onboard early. After Kells we did a couple of films. But, it really wasn’t until 2012 when we had the two nominations with A Cat in Paris and Chico and Rita that we really started to say, “Okay this is not just a part-time gig for two people.” So, we started to lay out a more thoughtful plan about expansion and increasing the number of films.

There’s a hole in the U.S. market that wasn’t really being filled anywhere. You have economies of scale in the U.S. that support 3,500 and 4,000-screen releases where films are really measured these days in billion-dollar worldwide box office. They drive big franchises, theme park business, and merchandise. That’s a great business and some wonderful product comes out of that. But where is the indie film world for animation? There really wasn’t one. It just felt like trying to help establish that…we knew from the earlier films we’d distributed that there was a pretty sizable market. We just needed to buy more films and thoughtfully feed them to that market. We had to figure out distribution paths where we could both take on films we loved and also be profitable enough to survive to the next film.

There are a lot of corpses along the roadside of feature animation distribution. We have seen some of those train wrecks and really wanted to avoid that. So, we have been really thoughtful -- I’d say cautious -- about what we do. Over time we’ve built an audience. Getting Oscar nominations really helps, not just with marketing in the U.S., which is great, but in transforming the lives of the directors and producers. It really enhances the value of the film and the director outside the U.S.

AWN: You talk about being cautious. What are some of the lessons you’ve learned?

EB: I don’t know if there’s a rule of thumb. If there’s anything we’ve learned, especially with films like Boy and the World, Only Yesterday and The Tale of the Princess Kaguya, it’s just to follow the films we love and believe in the films that we really believe in. The assumption is that maybe if I like this film then everyone will like this film…which may be solipsistic. It really works for us, rather than trying to figure out is this a more commercial film that we want to buy. First and foremost, we have to care a lot about the film so we convey that. Then there’s more strategic, intelligent things that we can talk about.

Dave Jesteadt: I second that. That’s really key. Especially in the family market. You get so many pitches that are based around “This premise and these characters are really appealing to families.” To view it as an experience or an artistic expression and not just a raw product is really important because at the end of the day, we do a lot of work on these films. It’s hard to be passionate if you’re just trying to view a year in the future, maybe having some kind of check to cash. It’s much more fun if you can think about that while you are also enjoying putting together often rather guerilla style marketing campaigns.

Some of our smaller films have been the most satisfying...pitching Boy and the World and watching people’s faces narrow as they heard that it’s non-dialogue with a political anti-capitalism message. Then you see them watch it and be like, “Oh, okay!” They become a convert.

EB: It was hugely gratifying because this was a film that wasn’t on people’s radar and we were sort of blown away by it. The deal was done in literally five minutes. Two emails going back and forth. I called up [Oscar-winning animation director, historian, author and professor] John Canemaker to see if he’d seen the film. [He told me] “Oh my god, I love this film.” So, there was a buzz already starting in certain circles. This is a film that we really love and probably other people really love and it’s that sort of sharing that works at all levels.

AWN: How early do you take on a film? Do you get involved before these films are finished? Do you get involved when these films are gestating? At what point do you normally cut the deals?

DJ: There’s a couple different ways. I remember when we first started -- the film played a festival, we would wait a couple weeks and then reach out because we weren’t traveling or attending those festivals.

EB: It was mostly you would call them and say is the film still available for North America? If three weeks after Toronto no one’s bought the film then it’s a buyer’s market.

DJ: Then we could afford it.

EB: But it’s been earlier and earlier.

DJ: I think more and more we’re looking to help introduce the film. Whether that’s on a film festival stage, like helping to bring it to Toronto or even to Annecy for a premiere, or acquiring it very shortly after so that we can help get it into theaters in a timeline that increasingly makes sense. We’d rather not wait a year or two until a film maybe feels a little old by the time it comes out in America.

Now we are taking tentative steps to get involved very early in projects. We recently did The Breadwinner with Cartoon Saloon [producers of The Secret of Kells and The Song of the Sea], which is our first entry on a film when it basically just started production. That will be done in 2017.

EB: We’re exec producers on that film.

AWN: So, you’re actually involved from a financing standpoint?

EB: As well as creative. We were involved in script comments and stuff like that. We’ve been doing that stuff informally. People will send us scripts and we’ll send them comments. Both for business reasons and creative fulfillment, we’re wanting to get more involved in the creative process.

AWN: I can see how it would be a natural thing for you guys to get involved in film financing as well.

EB: That’s what we’re doing. As in all things, we’re being cautious. It’s good because we’re not looking for quarterly return on investment. We have pretty strong opinions about film and are increasingly confident we can add to projects as co-production partners. We have a couple projects that we’re developing ourselves. We have a lot of friends that make movies. The timeline for producing is a little daunting. It’s very different than buying a film in March and releasing it in October.

DJ: There’s instant gratification there and that’s really nice.

EB: You don’t really know where the worlds going to be. We had a conversation today where delivery is 2019 and it’s like “We’re all going to be dead in 2019.” I’m mostly on the three-month timeline for planning my life and so the idea that we are going to be planning things multiple years down the line is a little hypothetical.

AWN: What’s your strategy for getting these films into theatres? How do you assess a film’s potential?

DJ: There’s definitely an evaluation that goes into every film. Each film is different based on the realities of what it is. The general strategy has been fairly consistent -- work with art-house cinemas. The early logic there was basically that once our festival audience goes home, where do they go [to see films]? They were likely to go to New York independent cinemas and various art-house venues. They would go there on date night and leaves the kids at home.

What if you had some sort of film that would bring out an entire family? A lot of these theaters were not at all used to playing animation or family films in any way. By and large they were kind of dealing with their core, older, art-house audience. I think those theaters have really embraced us over the last couple of years -- we are still really the only animation or family film playing those venues. It is starting to grow and there’s definitely a sizable audience every couple of months that, when they see another animated film, they sort of say, “Oh, I know what this is now.”

EB: It’s a little bit of a fine path that we travel to get there. Art-house cinemas have mostly adult audiences though we will get some families in there. I would say Song of the Sea was probably two-thirds adult audience and one-third family audience for a film that is largely a children’s film. That’s based on the fact that it played at art-house cinemas.

Ultimately, we want to get the film into as many theaters as possible. We also want to do that without hurting the overall profitability of the film. To take that film out on a thousand screens, there’s no good model for that. You could take it over to commercial screens but the profitability in your per screen average plummets pretty ferociously unless you have very significant cross over. The concept is in the platforming. The hope is that at some point you can cross something over in the same way Slumdog Millionaire started as a platform release and ended up on a wide release size number of screens through actual momentum.

There tends to be a general amount that the film will play without totally cratering profitability where you spend ten million dollars on marketing and then have to make it up on home video. There’s not a great correlation between box-office and home video sales. The film can play 200 markets and get reviewed and get all that buzz. But then you have to say, “Well, if we play another 200 markets is that going to help it that much more and how much do we have to spend to do that?” You need sort of a week by week economic analysis of how the release is going and how the film is playing to determine how much it makes sense to keep on pushing.

That’s just the standard platform release model. So far, that’s been successful for us and the net that we’ve invested in that process comes back to us, generally, on the home video. We’ve done pretty well on home video. Both physical DVDs and Blu-rays.

Our films also tend to do really well on streaming platforms. The fees have been pretty decent. If you’re a typical family that’s not an art-house oriented family and you’re going to go see a DreamWorks film, you’re not used to traveling. You’re used to going to your local theater. With our films, you tend to have to drive.

AWN: Moving forward, are there new, economically viable avenues you’re considering? If you’re looking more than three months ahead, where will you guys be making your money?

EB: There are a number of different trends. Some are positive and some are negative. On the one hand, there’s a growing awareness that there’s animation besides Pixar and DreamWorks in the world. The Oscar nominations have helped that…the awareness of the Ghibli films.

I don’t think we’ve anywhere near tapped the size of the audience for indie animation. In terms of humans in North America who want to purchase and view these films, that’s quite a large audience. When we say niches, the question is how big that niche is. That potential gives me a lot of hope for the economic viability of our business. Digital platforms, not just for distribution, but also for marketing, provide a lot of novel ways to reach people. We’ve got some plans to use digital strategies to reach audiences and have more direct relationships with customers.

We still like the films to be in theaters. We think, both from an artistic, sort of political belief system, that films should be shown in theaters to actually create value through the theatrical links.

DVD sales -- you’ve seen the graphs -- are reducing every year. That’s been more painful for the majors than it has been for us. We’re still seeing pretty good money, at least on our better selling films, from DVD releases. Even there the shelf space at the big Walmart and Target stores is narrowing. You have to take your shots where you’re going to push films. But if you’re going to sell a lot of DVDs than you gotta be in those places.

It’s a little treacherous in terms of home video revenue, which is what’s really driving profitability. More and more, we want to reach people directly through using internet mediated communication. Overall, I’d say it’s a happy market for animation. It’s great in so many ways. Its great artistically. There’s a lot of potential for film merchandising, follow-on products and ancillary avenues of revenue. Obviously, it’s easy to localize for different markets. Not cheap necessarily, but easy. It tends to be evergreen, especially the stuff that’s not going to look really dated in three or four years. We still get pretty sizable checks every quarter on The Secret of Kells. It’s like the gift that keeps giving. As we get more and more titles that are in their more mature stages of distribution, that’s a dividend that keeps on paying back. Every three or four years we figure out ways to re-market them. It’s a tasty little business.

AWN: It seems the emphasis at festivals like Annecy has shifted from shorts to features. The Motion Picture Academy and other entertainment craft-related organizations also seem to be recognizing more and more independent animated features in their award nominations. There certainly appears to be more interesting animation getting more mainstream attention than ever before.

EB: It’s interesting. There’s a little bit of a globalization and democratization of the animation, production and distribution processes. The fact that we’re in the distribution game competing with the Disneys of the world is crazy. That we’re able to do so is because there are paths to success that don’t require enormous budgets. At Cannes, we picked up A Girl Without Hands, which is a beautiful film. The filmmaker, Sébastian Laudenbach, made that film all by himself! It’s a gorgeous movie. The idea that more and more people in more and more markets can make the film that they want the make, with a smaller group than 300 people and hundred-million dollar budget, means that more films are going to get made by more auteurs and people who really have something important to say…more people who have real talent can create films.

Dan Sarto is Publisher and Editor-in-Chief of Animation World Network.