A few days ago, Sheila Nevins (the head of HBO’s documentary production and programming unit) commented that:

“We do great box office with our docus. It’s just that our box office is in your home where you don’t have to drive, pay money for gas, find a place to park or buy popcorn. For years, I’ve had people come into my office, desperate to sit in an empty theater and watch their documentary play on the big screen. I think what we have to offer is better.” (LA Times, June 10)

The question I would like to raise is — what does “better” mean?

In the interview quoted above, Ms. Nevins was talking about “Wanted and Desired” (in re Roman Polanski) and it’s premier on HBO. HBO, according to the article, has 35 million subscribers, and a premier program on HBO can reach between 1 to 3 percent of that audience — or about 500 thousand to 1.5 million people (Nielsen estimates). That is far more people than a theatrical release can claim for sure, so that’s better. Just for illustration, let’s say the number of viewers for the premier is 1 million people.

Highly regarded documentaries that HBO might buy from a documentary filmmaker can achieve license fees in the $100 thousand range — plus or minus, but in that range. Certainly, the Spike Lee documentary on Katrina was far more than that, but that was an HBO production. Other titles may only receive half or less than that, but there are undoubtedly reasons for that. But the few well regarded films that are “wanted and desired” by HBO could average in the $100 thousand range, so let’s use that number.

So the independent filmmaker, whose film cost between $250 and $500 thousand to make, the presentation of which may reach 1 million people at the time of its premier on HBO, gets 10 cents per viewer — $100 thousand in fees divided by 1 million viewers at the premier equals ten cents per viewer.

Ten cents per viewer. And that number goes down as the title plays multiple times over a couple of years, becomes available on-demand from many (or most) cable systems, and grows to a cumulative viewership in the 3 to 5 million persons range.

At that point, we would be talking 2 or 3 cents per viewer.

[In the HBO agreement, HBO reserves great flexibility in programming the title. Just because they acquire the license doesn't mean the title will premier on HBO. It may not even play on HBO! The HBO organization includes, for example, the Cinemax channel, which has a much smaller audience, is part of HBO and plays documentaries, too. If the audience on Cinemax is 100,000 viewers (instead of 1 million), then the license fee is $1 per viewer. Paying that much per viewer is an HBO business decision, of course, but the impact of paying so much more per viewer can be cushioned by cutting back on the promotional/visibility spending for the title.]

So let’s do a recap:

HBO is better because if you premier on the HBO channel, your documentary can reach 1 to 5 million people

HBO is better because if HBO loves your movie, they may pay you a license fee in the $100 thousand range which is an appreciable part of the filmmaker’s budget

I’m OK with that. But I am personally not OK with ten cents per viewer declining to an effective 2 to 3 cents per viewer over time. Especially when receiving such a small reward blocks many of the other ways a filmmaker has to earn back his production costs. And I’m especially not OK with the willingness of so many sales agents to settle for such a one sided agreement.

But that’s just my personal view. Sometimes you just have to hold your breath and do what you have to do. But you don’t have to like it.