November December 2003
Hollywood heavyweight
Bringing movie dealmakers and key players together makes the American Film Market a Hollywood hit. Now Jonathan Wolf plans his next take.
By Dawn J. Grubb
 When Jonathan Wolf hits the Loews Santa Monica Beach Hotel every February, his visit reads like a script from cable’s popular While You Were Out. Drastic transformation ensues for his hit trade show, the American Film Market (AFM).
Wolf and his team take over the eight-story hotel for 14 days, converting nearly every room into a “booth.” Furniture is removed, and plasma screens are added for movie-trailer viewing, creating “office suites” perfect for Hollywood deal making. Big shots like Miramax and smaller players like Troma Entertainment take up residency during the eight-day show to wheel and deal with international and domestic film distributors.
Because top decision makers from every major studio attend, tight security is a must — a $130,000 must. Everyone wears a photo ID, and security guards staff every floor, watching all elevators and stairwells. There are 23 security checkpoints requiring 60 full-time security personnel.
Sound unconventional? You bet. But Wolf’s successful role as AFM’s Managing Director has made the show an industry leader, netting $6 million in revenue. When he took the helm of the show in 1993 as Executive Vice President of AFM there was no marketing budget. Organizers simply relied on a once-a-year mailing to get the word out.
Over the years, Wolf has brought sophistication to the show’s marketing efforts with multiple, high-quality marketing pieces. Wolf’s vision has also altered the role attendees play in the revenue mix. Today, the show’s revenues are up $1 million and revenues from attendees have increased from $600,000 to $1 million. Now his sights are on making AFM bigger and better, competing with the industry’s two other film markets: the Cannes Market (part of the famous Cannes Film Festival) and MIFED in Milan, Italy. He relishes the challenge.
“The Cannes Market is the granddaddy of shows,” says Wolf. “We want to reach the Cannes level.” By level, Wolf refers to the Cannes show’s international brand. It’s the top film festival of the year, and Wolf dreams of making AFM the “Cannes” of North America.
Wolf knew the film industry when he started at AFM. He served as CFO of New World, a large independent film company, in the late ’80s. His entrepreneurial ambitions then took over, and he launched Studio Three Film Corp., a U.S. film distribution house. It was a wild scene: Wolf took Studio Three from startup to $8 million in revenue until its bankruptcy three years later. He has no regrets though. “There’s no shame in failure. Making mistakes is how you learn,” he says. “I’m a firm believer that every accomplishment builds on the previous.”
Born and raised in Los Angeles, Wolf began assembling his accomplishments at age 14 working at his uncle’s golf club factory. From there, he tried car sales and attended business school at the University of Southern California, graduating in 1978. But selling cars taught Wolf his most valuable lesson: “The sales message has to adapt to the customer,” he says. “A single approach won’t work for everyone.”
Wolf’s own life is a perfect example. Few would look at him and guess he’s a NASCAR fan, but he spends his free time tracking the sport and hasn’t missed a race in decades. “I dispel the stereotype of the redneck fan,” says Wolf. “You can wear an Armani suit, drive a Porsche and still go to the track.”
Wolf’s next big project will be co-locating AMF with the American Film Institute’s (AFI) annual film festival in November 2004, part of his strategy to raise the bar for AMF. This move pins AMF directly against MIFED, however, Wolf is optimistic. He expects the move will mean one show will have to go, and he’s betting it will be the Milan event.
“We’re moving out of a safe date and will be within three days of Milan. But we’re confident because we’re the only show run by exhibitors — trade association members. In fact, 65 percent of the Milan show’s exhibitors are our members,” he says.
The co-location with AFI is a strategic move that offers many benefits, including increased visibility for both parties. AFI is a young film festival trying to establish roots, says Wolf, so partnering with AFM offers clout. While AFM draws business-to-business media, AFI draws consumer media.
“But we’ll create a Hollywood juggernaut that week and draw both,” says Wolf. “Providing greater visibility will help us offer greater value to our sponsors.”
The American Film Market’s Jonathan Wolf knows how to attract the major movie players and keep them coming back. His $6 million revenue-generating show keeps growing and gaining stature. Here’s his advice for growing yours:
Find a home. AFM has called the Loews Santa Monica Beach Hotel home since 1991. In fact, AFM planned for its future while the hotel was under construction. Builders installed a separate phone network that bypasses the hotel’s, as well as cabling and a computer network specifically for AFM. This allows Wolf to offer better prices in the long term because the network doesn’t have to be built from the ground up every year.
“We’ve developed a long-term relationship with vendors and temporary staff alike, and exhibitors have developed relationships, too,” he says. “Plus, we can offer better prices and value if exhibitors really know the location.” Wolf is able to secure discounts for repeat business.
Offer sponsors exclusivity. Since there’s little prospecting during AFM (buyers and sellers already know each other and are there to finalize deals), exhibitors don’t need traditional frontage and aren’t allowed to be sponsors. Wolf hired IEG, a firm specializing in sponsorships (www.sponsorship.com), to develop a program for AFM that ensures outside sponsors exclusivity within their industry.
For example, Mercedes Benz and British Airways might co-sponsor an event but Lexus and JetBlue wouldn’t be allowed. Wolf says this approach — similar to a charity golf tournament — is very attractive to companies.
“We started doing this model about five years ago, and it’s been very successful,” he says. “Sponsorships now represent 5 percent of our revenue and 16 percent of our profit.” Wolf says the cost of servicing a sponsorship is only 10 to 15 percent of the revenue generated from the sponsorship, so 85 to 90 percent of revenue goes directly to the bottom line.
Diversify attendee revenue. Although most shows rely on exhibitor revenue, attendees can also bring in the dough. When Wolf took over AFM management, his first focus was diversifying attendance by changing registration price points: $775 buys anybody full access to the show floor and screenings for eight days; $495 gets pre-accredited buyers access to the show floor, the VIP lounge and screenings for eight days; and $295 provides anybody access to the show floor during the last four days.
This third option was added to accommodate those involved in the film manufacturing process: screenwriters, producers, special effects houses, etc. Most exhibitors’ schedules free up mid-week, so they often have time to meet with this segment of the market. Wolf’s diversification efforts have paid off. Attendance revenue has jumped from $600,000 to $1 million, a 60 percent increase over five years.
“Most shows have one group they buy, sell and market to," says Wolf. "We look at people who want to see our exhibitors and encourage them to attend. We make a lot of dough at the gate.”
Be a show expert, not a publisher. Instead of producing a show daily, Wolf has about eight trade publications cover AFM. Of course, there’s a hefty fee involved. Daily publications like The Hollywood Reporter and Daily Variety pay about $11,000 for the rights to distribute at the show, while weekly and monthly business and film publications pay $4,000. Sponsors jump at advertising with these publications.
“We’ve found this revenue stream more profitable than building up our own publication staff (sales, editorial, design, production),” says Wolf. “We leave it up to the independent papers to promote us, and it’s guaranteed we’ll be seen outside the show’s four walls.”
Dawn J. Grubb is owner and president of 24/7 Communications in Westwood, KS. She can be reached at dawn@24-7comms.com. |
