Presents

Reel Growth Potential

Brought to You By:

Case Prepared by: Zach Witte Staff Accountant, KPMG Canada Michelle Cherny Staff Accountant, Deloitte Canada Special Thanks to: Diana Khong Marketing and Education Coordinator, Inside Out LGBT Film Festival Andrs Tilcsik Assistant Professor of Strategic Management, Rotman School of Management University of Toronto

Inside Out: Reel Growth Potential

By: Zach Witte and Michelle Cherny As you walk down King Street in downtown Toronto, you come across a beautiful skyscraper seeming to touch the sky itself. You are standing in front of the Bell Tiff Lightbox, the great movie shrine of Toronto. You venture inside to grab a coffee and check out the XMen Master: Gordon Smith exhibit in the lobby. While in the lobby you overhear an argument between two people over the Inside Out festival. Curious, you pull out your iPhone and Google it (www.insideout.ca). You listen to the heated conversation and learn that the two individuals, both of whom board members of Inside Out, are discussing the need for a strategic consultant to help ensure the growth and sustainability of the organization. Being the enterprising intermediate consultant you are, you quickly jot down a few specifics of the conversation to report back to your manager at ZM Consulting. You rush over to the office and inform your manager of the engagement opportunity. Your manager, Laila Jenkins, congratulates you on taking the initiative and expresses her excitement over this excellent opportunity. Laila contacts Inside Out and offers ZMs services in developing a growth and sustainability strategy for the organization. She speaks with Diana and discusses what the engagement would entail. Diana mentions that Inside Out is looking to address two main strategic challenges. Laila takes a few notes, hangs up the phone and calls you into her office. She lets you know that she has arranged for a tender presentation on February 8th to Inside Outs managers. Laila has asked you to prove that ZM Consulting is the clear choice to help Inside Out achieve its goals. Laila notes that due to the large number of tender proposals, Inside Out has requested that you prepare a ten-minute presentation with a five-minute question and answer period. Laila adds that Inside Out is known for its creativity and innovativeness, and that she expects your tender presentation to go beyond a simple slide deck. She has recently learned that a rival consulting firm will be including multimedia in their presentation and expects that ZMs tender presentation to be competitive. Laila explains that she will be providing you with the specifics of her conversation with Diana, as well as the Inside Out deliverables. She asks that in the meantime you develop an understanding of the entity and its environment. You immediately assemble your team to prepare your presentation for Inside Out. One of your team members provides you with the following background information: Inside Out is a non-profit registered charity dedicated to showcasing film and video created by and about lesbian, gay, bisexual and trans (LGBT) people. Inside Out exists to challenge attitudes and change lives through the promotion, production and exhibition of film and video 1. Bringing the LGBT community together for over two decades, Inside Out is best known for its annual film festivals, filmmaker initiative and year-round screenings. Inside Out is the host to international queer cultural events that engage, celebrate and nurture communities of diverse sexual and gender identities through the exhibition, promotion and production of film and video art.
1

http://www.insideout.ca/about-us/overview

Inside Out began as a transgressive arts organization at the tail end of the 1980s, a decade marked by the AIDS epidemic and institutional discrimination. In 2010, the Canadian government withdrew funding from Torontos Pride celebration, sending shockwaves through the LGBT community. Despite the funding crunch in Toronto, Inside Out has developed from a volunteer collective into a fully staffed not-for-profit organization with corporate sponsorship. Since its inception in 1991, the Inside Out Film and Video Festival has become the largest LGBT film festival in Canada and the third largest in the world, with multi-day festivals occurring in Toronto and Ottawa annually. Inside Out currently trails behind the Toronto International Film Festival (TIFF) and Hot Docs, an international documentary festival, as Torontos third largest film festival of any kind, whether queer or heteronormative. With major sponsors such as the Royal Bank of Canada, Xtra!, Toronto Star and OUTtv, Inside Out has drawn 35,000 people to their screenings, artist talks, panel discussions, installations and parties. As a result of their position in the film festival industry on a local, national and international level, Inside Out has leveraged important partnerships to launch new initiatives such as crosspromotion with Hot Docs and the Feminist Porn Awards. The organizations marketing initiatives to promote its film festivals and local initiatives include its website, e-newsletter, social media efforts, print and online advertisements as well as television broadcast and outdoor advertising in places such as the TTC subway cars. See Appendix I for an excerpt of the 2012 Inside Out Marketing Plan. After you read your team members initial report, Laila sends you an email confirming the details of the strategic challenges facing Inside Out. She mentions that as per her discussion with Diana, Inside Out is looking to establish themselves as Torontos second largest film festival within the next 5 to 10 years. Inside Out is looking to accomplish this growth via targeted audience segments and increased presence and prestige on a local, provincial, national and international scale. The details of their objectives are presented on the following page.

Issue One: Targeted Growth Inside Out presents itself as An international queer cultural event that engages, celebrates and nurtures communities of diverse sexual and gender identities through the exhibition, promotion and production of film and video art. Audience Information: Captive Base This segment comprises primarily of members of the LGBT community in Ontario. They see the Festival as a showcase for the best Canadian and international LGBT film; a celebration of diverse sexual and gender identities; an exciting venue that brings their community together, and as an educational forum. These audience members are most engaged and will attend the Festival as long as queer content is represented on film. Marketing efforts do not have to focus on the Captive Base but must always be conscious of potentially offending or alienating this key group. There is a strong focus on converting this group into members. Torontos Film Lovers (Growth Focus) This segment includes anyone in Toronto who has ever attended any film festival. For the sake of simplicity and a sense of focus, crossover marketing efforts in 2012 will focus on the TIFF and Hot Docs devotees. This group is engaged, knowledgeable and passionate about film. The intent is to communicate that the quality of programming is not lacking. These Film Lovers will see the same titles at TIFF or Hot Docs, but will not commit to the same films at Inside Out. Youth (17-25) (Growth Focus) The Youth demographic represents a relatively small segment of the current audience base. The general consensus among Inside Out managers is that there is very little awareness of the Festival. Fortunately, there is a strong demand among the Youth for queer cinema. Since this segment is very receptive, marketing efforts toward younger audiences will focus on increased visibility in social media, student organizations and campus newspapers. Women and Trans People (Growth Focus) Festival patrons have historically comprised of many more men than women. The perception from the female community is that there are too few films that resonate with women. It is imperative that all communications stress Inside Outs directive of bringing the best films from around the world. If it were a particularly strong year for women in films, marketing would then focus on the strength of films as a package and position it as a spotlight. Otherwise, the selling point would be on overall quality of programming. Excellence has universal appeal.

The Inside Out Festivals organizers would like to see robust growth in attendance by out-oftown patrons. Inside Out sees particular opportunity with out-of-town patrons as they represent a key value proposition of the festival when applying for government grants. The wider Inside Outs patronage, the more culturally significant the festival appears to the government and thus establishes Inside Out as a strong candidate for funding. The organizers would also like to see considerable growth in non-LGBT patrons as they represent a fairly untapped market. Inside Out currently has limited patronage cross-over between TIFF and Hot Docs despite the cross-promotion currently employed. Inside Out is seeking new and creative methods to attract non-LGBT patrons, including those who do not regularly partake in TIFF and Hot Docs. To attract new patrons, Inside Out must weigh the growth potential against associated costs. ZM was provided with a sample budget (Appendix II) for the current year, which illustrates a $23,000 surplus at the moment, giving you very little budget flexibility to enact new initiatives. Thus each growth opportunity you identify must result in a nearly 100% return or be accompanied with additional funding via corporate partners or the government. To aid in the development of funding sources, the budget outlines the government grants from which Inside Out currently benefits. Laila also provided you with the Inside Out Sponsorship package. Your recommendations can include new sponsor targets or possible changes to what the sponsors receive in order to increase Inside Outs value proposition. Laila mentioned that in order to increase any dollar value of sponsorship, the additional services the sponsor receives would have to be highly innovative, helping the sponsor to secure strong brand presence, access to future customers, or a positive feedback effect from the association with the organization and its initiatives.

Issue Two: Presence and Prestige With strong corporate partnerships allowing the organization to divert its focus from sustaining operations and concurrently reducing their reliance on the Canadian government for funding, Inside Out is looking to enhance its presence in Toronto and the world. Inside Outs presence peaks during its ten-day long film festivals in both Toronto and Ottawa. After the festival, members of both the LGBT and heterosexual communities are less engaged. Inside Out competes with film festivals such as Hot Docs, which has established themselves as a year-round host of documentary films through their partnership with Bloor Hot Docs Cinema, located in the heart of Toronto. The main point of competition is for the attention of movie-goers. Despite having a clear focus on the LGBT community, Inside Out is lacking an awareness of its festivals and bi-monthly screenings with such key demographics as youth, women, trans people, and out-of-town patrons. Inside Out directors and volunteers have continuously worked toward ensuring that Inside Out remains at the top of mind for Toronto residents as well as a tourist attraction for visitors. Despite the popularity achieved during the hype of film festival season from May through June, Inside Out struggles to maintain the queer cinema buzz year-round.

Inside Out initiatives in the past had included a queer video mentorship project, launched in 1998, and a scholarship for queer studies in film and video, inaugurated in 2002. Inside Out currently hosts a regular screening series whereby the organization screens a queer film in the TIFF Bell Lightbox. The marketing strategy for this bi-monthly initiative is primarily through social media and grassroots marketing. Inside Out is continuously working towards presenting itself as a premier film festival and reassuring patrons and potential patrons of the unmatched quality of the programming presented. With all of the information you have gathered in-hand, you begin to develop your recommendations and proposed initiatives for the tender presentation.

Appendix I: 2012 Inside Out Marketing Plan Excerpt Marketing Objectives Highlight mainstream appeal Preserving the appeal of existing core audience Increase womens attendance by 25% Increase youth attendance by 10% Increase out-of-town Festival patrons by 10% Maintain Inside Outs general awareness beyond Festival

Key Messages Largest LGBT film festival in Canada and the third largest in the world Third largest film festival in Toronto world-class cinema, queer or otherwise 22nd year as a showcase of the best in queer cinema films that celebrate our shared stories, challenge attitudes, change lives, and champion the voice and vision of LGBT filmmakers An international queer cultural event that engages, celebrates and nurtures communities of diverse sexual and gender identities through the exhibition, promotion and production of film and video art Inside Out is a non-profit charity with year-round initiatives that engage and support the LGBT community with bi-monthly film screenings, workshops, awards, grants, and scholarships Inside Out is committed to providing a high-profile forum for underrepresented groups which includes inaugural initiatives targeted toward women and youth Presenting Sponsor RBC

Value Propositions Open, inviting space to celebrate queer films and talent Unique environment to unite all film lovers with bold, daring and groundbreaking cinema Second-largest concentration of LGBT focused events in the city Premier venue for world-class cinema that is often underrepresented and overlooked

Key Differentiators VS. Other film festivals: 1. Exclusively queer hidden gems that are often overlooked by heteronormative standards 2. Celebration of LGBT talent numerous events featuring film, video art, music and dance 3. Unique environment that is inclusive to all something for everyone VS. Other LGBT and cultural activities in the city: 1. Use of film as a unifying element universal; minimal barriers to entry 2. Reflects diversity of LGBT community 3. Engages broad range of LGBT community 4. Appeals to cinephiles

Key considerations Themed campaign Consistency in the Festivals image is essential to delivering strong, focused cues to attend screenings/events. Pique the interest of the curious film lover. Program Guide The most important marketing tool. Most likely to convert the curious into patrons. Ensure the content is clear, comprehensive and enticing. Distribution Guide distribution will be restructured. Outposts in the city will be more accessible outside of the downtown core (west of Dufferin and east of Pape). Approach popular neighbourhood outlets to join our network (Preferred Local Businesses). Establish more meaningful, generative relationships with local businesses. Window display and guide pickup in exchange for Fest site listing and guide acknowledgment.

Metrics of Success Festival post-mortem to evaluate the effectiveness of our strategy. Factors under review to determine this will include: Attendance/Box Office figures Compared to other years? Festival survey Who came out this year? How did they hear about us? Audience feedback What did they like/dislike about this years festival? Other factors - Website hits and visits, # of contest entries, donations generated, etc

Marketing and Communications Initiatives 1. Marketing and Communications Vehicles Promotional Materials
Item Program Guide Posters Postcards Details 15-18K/distribution Quantity/distribution 3-5k; street team distribution Cost $20 000 $1 000 $600

Print Advertising
Item Metro 1/6 Page Banner 1/6 Page 1/8 Page Xtra! 70 CMYK Units 70 Blk&Wte Units Ticket Giveaway Contest NOW Full Page 1/3 Page 1/4 Page Contest Hot Docs Guide Page Excalibur (York) Page Details Run: Best-of basis Cost $1 250 $1 785 Contra Contra Contra

Ad size Run date details

Run date details

$5 000

Ad Swap Student discount First May issue $300

Broadcast Advertising
Item Global 2012 Trailer ProudFM 20-30 sec spots OUTtv 2012 Trailer Details Run date details Throughout day Run date details Cost Sponsor Sponsor Sponsor

Outdoor Advertising
Item CBS Outdoor/ Pattinson Mall Ad #1 Mall Ad #2 Street Ad TTC Subway Ads CBS Outdoor/ Pattinson Details Holt Renfrew Centre (Month of May) Gerrard Square (Month of May) Beer Store on Church (Month of May) Subway interior 75 units (Month of May) Holt Renfrew Centre (Month of May) Cost $750 $600 $700 $3 000 $750

2. Online and Interactive Inside Out Website YouTube player: Movie trailers, packaged commercials, Picks by staff/celebrities Add Share function on all movie pages, so users can share on Facebook, Twitter, etc. Programmer and Filmmaker blogs/Twitter eNewsletter When tickets go on sale, feature a YouTube player in the e-newsletter that will play trailers as well as a Picks section featuring recommendations by staff, volunteers and local celebrities to build hype around select films Personal Invites Create printout (drink ticket). Ask committees, sponsors, town hall and members to send out invites with printout attached. Personal appeal, no copy to accompany printout. Two invites: a) Launch Party and b) Opening Night Online Advertising- Xtra, Now, OMGBLOG, FB, blogTO
Item Xtra Banner ads E-blasts Now Banner ads? Eblasts? OMGBLOG Banner Facebook Details 120 x 240 px; May 2x Twitter; 1x FB Ad size; Run date 160x200 px May 10 - 24 May 10 -24 Cost Contra Contra Contra Swap Max. $50/day $0.62 CPC ~ $1 000 Contra Contra

blogTO Top banner Events ad

May 10 - 24 Month of May

Social Media Daily Facebook and Twitter updates after tickets go on sale to end of festival Youth Reporters: create and upload video content to YouTube

3. Media and Public Relations Comprehensive media pitch list and story pitches Very granular and targeted, including story leaks Packaged film picks: e.g. Executive Directors Top 10 picks, Programming Directors Festival Gems, Films for romantics, Films for aspiring dads/moms, etc. Designate spokesperson: Inside Out staff, filmmakers, 20th anniversary figures Focus on more meaningful features; less fluff articles; quality Is key Develop press kit

4. Partnerships Ambassador Program Mobilize Inside Out staff, volunteers, board members, friends and community partners as a grassroots team to help spread the word via in-person and online distribution Preferred Network Window displays and collateral distribution Inside Out signature drink or menu item at all bars and restaurants Recognition in program guide and/or Fest site; spotlight on FB and Twitter Cross-promotion with other festivals and cultural initiatives: Hot Docs Feminist Porn Awards 5. Community Outreach Target specific LGBT community groups including university student groups - and ask them to help distribute our promotion materials 6. Merchandising The Festival is Inside Outs most visible time of the year. We will leverage this increased exposure and connection with the public with merchandise. Buttons and tote bags will be created to drive the membership campaign. A gift (tote bag) will be provided with every minimum donation of $15. Buttons will be given out for any size donation. 7. Internal Communications Regular board, committee, donor and membership updates 8. Budget Program Guide (design, printing and distribution) - $23 750 Trailer - $2 000 Graphic Design - $7 500 Advertising Expenses - $18 000 Festival Collateral (printing) - $7 000 Volunteer Shirts - $3 500

Appendix II: 2012 Inside Out Budget

REVENUE Box Office Memberships Donations - Individual Corporate Sponsor Award Sponsorship Community Sponsors Consulate/Embassy Sponsors Total: Sponsorship Donations - Corporate Advertising Special Events Ottawa Box Office Ottawa Sponsorship Ottawa Donations Ottawa Grants Touring - Ottawa Endowment Interest Equipment Rental Submission Fees Miscellaneous Other Revenue x x x x x x x Total: Government Grants x x Total: Foundations TOTAL REVENUES $13,559 Toronto Arts Council Ontario Arts Council Canada Council for the Arts Heritage - Arts Presentation Canada Council - Travel City of Toronto Lightbox Fund Ontario Investment Fund Celebrate Ontario New Government - OTEMPP $260,225 LGCA Trillium $60,000 $764,280 $5,000 $55,000 $32,000 $48,400 $41,800 $20,000 $1,050 $20,000 $10,100 $72,500 $14,375 $43,500 $8,100 $4,000 $1,459 $0 $91,150 $15,000 $14,735 $21,500 $18,000 $17,500 $3,000 $5,000 $103,611 $71,000 $70,000 $72,750 $12,000 $6,400 $0

EXPENSES FESTIVAL Director of Programming Programming Assistant Misc. Honourariums Panelist/Artist Speaker Fees Total: Programming Salaries Print Traffic Guest Relations Front of House Volunteer Coordinator Tech Fees/Staff Total: Festival Salaries Screening Fees (Intern'l) Screening Fees (Canadian) Total: Screening Fees Awards Shipping & Brokerage Venue Rental Tech & Equipment Rental Total: Venue & Equipment Rental Box Office Expenses Comm Rlns/Volunteer Expenses Festival Operations Total: Festival Operations Outreach Programming Tape Dubbing Misc. Programming Expenses Travel - Programming Total: Programming Expenses Guest Services / Artist Travel Design/Layout Printing Poster - Guide Dist. Total: Program Guide Publicist Festival Parties Festival Trailer Graphic Design Advertising Expenses Printing - Festival Promo T-Shirts Website Total: Advertising, Promotion & Entertainment Youth Project Ottawa Festival / Touring TOTAL FESTIVAL EXPENSES $79,318 $16,500 $17,000 $374,356 $22,673 $8,000 $18,000 $2,248 $9,600 $18,000 $7,000 $2,520 $13,950 $15,000 $24,000 $5,000 $16,557 $1,116 $7,250 $0 $1,300 $3,200 $10,500 $43,500 $9,250 $1,750 $5,500 $25,950 $10,900 $12,500 $40,000 $3,500 $26,350 $23,250 $2,700 $64,165 $5,000 $4,950 $6,400 $1,500 $8,500

ADMINISTRATION Executive Director Manager of Operations Director of Corp Sales Director of Development Marketing Coordinator Festival Assistant Grant Writer Staff Benefits Payroll Deductions Total: Administrative Fees/Salaries Bookkeeper Audit Total: Professional Fees Telephone Internet Access Technical Support Total: Telephone & Internet Rent Courier Postage Total: Distribution (postage & Courier) Costs Capital Expenditures (Computers) Photocopy/Printing - Admin Office Supplies Travel Office Meeting Expenses Prof. Dev / Networking Fundraising Exp Repairs & Maintenance Total: Office & General Office Insurance Bank Charges/Interest VISA Fees Total: Bank Charges & Interest Special Event Expenses Scholarship Depreciation Bad Debt Expense TOTAL ADMINISTRATION EXPENSES TOTAL EXPENSES SURPLUS/(DEFICIT) Contingency FINAL SURPLUS / (DEFICIT) $11,250 $6,000 $5,000 $1,250 $0 $24,500 $4,500 $4,750 $6,500 $3,250 $3,000 $4,500 $6,500 $1,500 $1,500 $2,500 $8,000 $0 $4,750 $19,000 $2,250 $1,000 $10,300 $2,750 $1,250 $750 $266,600 $5,500 $4,800

$359,400 $733,756 $30,524 -$7,000 $23,524