Simon Istolainen on PeopleForCinema

Article  by  Matt DARTI  •  Published 03.12.2010  •  Updated 11.12.2010

An interview with Simon Istolainen, co-founder of MyMajorCompany and PeopleForCinema.

Simon is the co-founder of MyMajorCompany, “crowdfunding” website for music. The success of the singer Grégoire, who has sold 800,000 albums, attests to the success of this new way of financing the recording industry: participatory production. For a year now, Simon Istolainen has reproduced this system for movies with PeopleForCinema.

Simon Istolainen, you are now CEO-associated of PeopleForCinema (P4C), having founded MyMajorCompany (MMC). Why didn’t you call the company MyMajorCompany Movies, in the model of MyMajorCompany Books?

Simon Istolainen: There is no link between MyMajorCompany and PeopleForCinema, except human relationships. Indeed, I founded MyMajorCompany with Michael Goldman in 2007, and in 2009, I founded PeopleForCinema with Serge Hayat, but both companies are quite distinct. I proposed a project of participatory cinema for MyMajorCompany, but it did not hold much appeal. So I created a start-up with seven employees by myself.

How does the site work? What is the difference between PeopleForCinema and MyMajorCompany?

Simon Istolainen: Customers can register on the site and buy shares to help finance films. A share is 20 Euros and the maximum is 500 Euros. There are 14,700 users registered and about 3,000 of them rely on regular movies. Thus users are participating in financing a portion of the distribution of the film. But, at the launch of the site, we had to avoid two pitfalls related to the film industry that did not exist for the music industry: first, the fact that users could not watch the movie before buying the shares, while this was possible with an EP for music, so users judge from synopses, trailers, etc. Secondly, the cost of production is very high and sales revenue takes longer to reach the producer. This is why we focus on distribution. Indeed, it is more lucrative to take part in distribution than in production, since the distributor is the main earner in movie sales. It is a way for us to secure user investments. This is one of the major differences between P4C and MMC.

For Internet users, this is an unusual and exciting human experience. We seek to create an emotional connection between online users and the film.


Serge Hayat (left) and Simon Istolainen (right)

Do you have external financial support?

Simon Istolainen: Yes. We have business angels, Christian Gueugnier and Didier Le Menestrel, who are a part of the company's capital through an investment fund, Weber Investment. They are the largest shareholders of P4C.

Which audience do you reach: internet film fans or online players?

Simon Istolainen: We really want to reach everyone, be it moviegoers or online players eager to discover the world of cinema. In any case, 70% of our users who come from the provinces and 60% of them are men. They are mostly employees between the ages of 25 and 35. The average investment is €158 and the median is €40.

How do you select the movies?

Simon Istolainen: We look at the commercial potential of films to make good income for our users. We are attentive to financial matters and seek to reach a low break-even point, between 100,000 and 900,000 entries. Generally, they are films for the general public, often comedies. To ensure proper distribution, we work with several major distributors in the film industry: Studio Canal, Mars, Advitam, Europa Corp.

Do you also seek to educate investors on the workings of the film industry?

Simon Istolainen: Yes, this is one of our priorities. We really want to involve users who invest in movies: they are allowed to attend premieres, meet the cast, and receive backstage videos...For example, users who participated in funding for the film L’âge de raison, with Sophie Marceau, were allowed to meet the actors. For Internet users, this is an unusual and exciting human experience. We seek to create an emotional connection between online users and the film.  
Additionally, on the site, we intend to develop the educational part "En savoir plus" to provide Internet users with all necessary information on the organization and mechanisms of the film industry.

There is therefore a need to communicate on P4C itself. Are there no doubts from users concerning this new way of funding, especially in the wake of the Spidart case?

Simon Istolainen: Indeed, the problem of crowdfunding is that there has been no regulation until now. We try to be as transparent as possible to online investors. We have an external auditor and our accounting is in good health. I am totally in favor of the regulation of crowdfunding, because this system is primarily based on security investments. The case of the bankruptcy of Spidart, which has used its users’ updates to finance its overhead, gives a bad image of participatory funding sites, which only work if there is a guarantee of security and transparency.
In addition, on PeopleForCinema, 100% loss is not possible for Internet investors; we provide them the opportunity to recover at least 50% of the amount invested.

 What are the results after one year of existence?

Simon Istolainen: We have a lineup of 15 films, including Les émotifs anonymes, Nowhere Boy, Les yeux de sa mère,and L’avocat. For the film Les Petits Ruisseaux, earnings amounted to 200% of investments, for example. Generally, earnings have amounted to three or four times the starting amount. We also participated in the American film Brothers and we acquired the full rights to distribute the film Catfish in France. We plan on solid profits for 2011.

Has the crowdfunding that extends to diverse fields such as sports and fashion radically overhauled the way the cultural industries are financed today?

Simon Istolainen: I think that this is very true with regards to the recording industry, because it is a new way to discover emerging artists. In contrast, for the cinema, we play more of a complementary role or act as additional help in the distribution of films. Our role is more incremental, as we participate in five to ten percent of total funding. However, we have a major marketing role in terms of word of mouth and new media in general.

What are the prospects for PeopleForCinema?

Simon Istolainen: We are currently negotiating a contract with RTL to expand P4C in Germany, Belgium and the Netherlands. New partnerships will therefore be realized in the years to come...Stay tuned!

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