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Case Prepared by:
Zach Witte
Staff Accountant, KPMG Canada
Michelle Cherny
Staff Accountant, Deloitte Canada
Special Thanks to:Diana KhongMarketing and Education Coordinator, Inside Out LGBT Film Festival
Andrs TilcsikAssistant Professor of Strategic Management, Rotman School of ManagementUniversity of Toronto
Presents
Reel Growth Potential
Brought to You By:
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Inside Out: Reel Growth PotentialBy: Zach Witte and Michelle Cherny
As you walk down King Street in downtown Toronto, you come across a beautiful skyscraperseeming to touch the sky itself. You are standing in front of the Bell Tiff Lightbox, the greatmovie 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 twopeople 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 consultantto help ensure the growth and sustainability of the organization.
Being the enterprising intermediate consultant you are, you quickly jot down a few specifics ofthe conversation to report back to your manager at ZM Consulting. You rush over to the officeand inform your manager of the engagement opportunity. Your manager, Laila Jenkins,congratulates you on taking the initiative and expresses her excitement over this excellentopportunity.
Laila contacts Inside Out and offers ZMs services in developing a growth and sustainabilitystrategy for the organization. She speaks with Diana and discusses what the engagementwould entail. Diana mentions that Inside Out is looking to address two main strategicchallenges. Laila takes a few notes, hangs up the phone and calls you into her office. She letsyou know that she has arranged for a tender presentation on February 8thto Inside Outsmanagers. Laila has asked you to prove that ZM Consulting is the clear choice to help InsideOut achieve its goals. Laila notes that due to the large number of tender proposals, Inside Outhas requested that you prepare a ten-minute presentation with a five-minute question andanswer period.
Laila adds that Inside Out is known for its creativity and innovativeness, and that she expectsyour tender presentation to go beyond a simple slide deck. She has recently learned that arival consulting firm will be including multimedia in their presentation and expects that ZMstender presentation to be competitive. Laila explains that she will be providing you with thespecifics of her conversation with Diana, as well as the Inside Out deliverables. She asks thatin the meantime you develop an understanding of the entity and its environment. Youimmediately 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 challengeattitudes 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 itsannual film festivals, filmmaker initiative and year-round screenings. Inside Out is the host tointernational queer cultural events that engage, celebrate and nurture communities of diversesexual and gender identities through the exhibition, promotion and production of film and videoart.
1http://www.insideout.ca/about-us/overview
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Inside Out began as a transgressive arts organization at the tail end of the 1980s, a decademarked by the AIDS epidemic and institutional discrimination. In 2010, the Canadiangovernment withdrew funding from Torontos Pride celebration, sending shockwaves throughthe LGBT community. Despite the funding crunch in Toronto, Inside Out has developed from avolunteer 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 largestLGBT film festival in Canada and the third largest in the world, with multi-day festivalsoccurring in Toronto and Ottawa annually. Inside Out currently trails behind the TorontoInternational Film Festival (TIFF) and Hot Docs, an international documentary festival, asTorontos third largest film festival of any kind, whether queer or heteronormative.
With major sponsors such as the Royal Bank of Canada, Xtra!, Toronto Starand OUTtv, InsideOut has drawn 35,000 people to their screenings, artist talks, panel discussions, installationsand parties.
As a result of their position in the film festival industry on a local, national and internationallevel, Inside Out has leveraged important partnerships to launch new initiatives such as cross-
promotion with Hot Docs and the Feminist Porn Awards.
The organizations marketing initiatives to promote its film festivals and local initiatives includeits website, e-newsletter, social media efforts, print and online advertisements as well astelevision 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 thedetails of the strategic challenges facing Inside Out. She mentions that as per her discussionwith Diana, Inside Out is looking to establish themselves as Torontos second largest filmfestival 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 followingpage.
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Issue One: Targeted Growth
Inside Out presents itself as An international queercultural event that engages, celebratesand 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. Theysee the Festival as a showcase for the best Canadian and international LGBT film; acelebration of diverse sexual and gender identities; an exciting venue that brings theircommunity together, and as an educational forum. These audience members are mostengaged 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 beconscious of potentially offending or alienating this key group. There is a strong focuson converting this group into members.
Torontos Film Lovers (Growth Focus)
This segment includes anyone in Toronto who has ever attended any film festival. Forthe sake of simplicity and a sense of focus, crossover marketing efforts in 2012 willfocus on the TIFF and Hot Docs devotees. This group is engaged, knowledgeable andpassionate about film. The intent is to communicate that the quality of programming isnot lacking. These Film Lovers will see the same titles at TIFF or Hot Docs, but will notcommit to the same films at Inside Out.
Youth (17-25) (Growth Focus)
The Youth demographic represents a relatively small segment of the current audiencebase. The general consensus among Inside Out managers is that there is very littleawareness of the Festival. Fortunately, there is a strong demand among the Youth forqueer cinema. Since this segment is very receptive, marketing efforts toward youngeraudiences will focus on increased visibility in social media, student organizations andcampus 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 withwomen. It is imperative that all communications stress Inside Outs directive of bringingthe best films from around the world. If it were a particularly strong year for women infilms, marketing would then focus on the strength of films as a package and position itas a spotlight. Otherwise, the selling point would be on overall quality of programming.Excellence has universal appeal.
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The Inside Out Festivals organizers would like to see robust growth in attendance by out-of-town patrons. Inside Out sees particular opportunity with out-of-town patrons as they representa key value proposition of the festival when applying for government grants. The wider InsideOuts patronage, the more culturally significant the festival appears to the government and thusestablishes Inside Out as a strong candidate for funding.
The organizers would also like to see considerable growth in non-LGBT patrons as theyrepresent a fairly untapped market. Inside Out currently has limited patronage cross-overbetween TIFF and Hot Docs despite the cross-promotion currently employed. Inside Out isseeking new and creative methods to attract non-LGBT patrons, including those who do notregularly 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 beaccompanied with additional funding via corporate partners or the government. To aid in thedevelopment 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. Yourrecommendations can include new sponsor targets or possible changes to what the sponsorsreceive in order to increase Inside Outs value proposition.
Laila mentioned that in order to increase any dollar value of sponsorship, the additionalservices the sponsor receives would have to be highly innovative, helping the sponsor tosecure strong brand presence, access to future customers, or a positive feedback effect fromthe association with the organization and its initiatives.
Issue Two: Presence and Prestige
With strong corporate partnerships allowing the organization to divert its focus from sustainingoperations 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 themselvesas a year-round host of documentary films through their partnership with Bloor Hot DocsCinema, located in the heart of Toronto. The main point of competition is for the attention ofmovie-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 Outremains 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.
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Inside Out initiatives in the past had included a queer video mentorship project, launched in1998, and a scholarship for queer studies in film and video, inaugurated in 2002. Inside Outcurrently hosts a regular screening series whereby the organization screens a queer film in theTIFF Bell Lightbox. The marketing strategy for this bi-monthly initiative is primarily throughsocial media and grassroots marketing.
Inside Out is continuously working towards presenting itself as a premier film festival andreassuring patrons and potential patrons of the unmatched quality of the programmingpresented.
With all of the information you have gathered in-hand, you begin to develop yourrecommendations and proposed initiatives for the tender presentation.
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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 offilm and video art
Inside Out is a non-profit charity with year-round initiatives that engage and support theLGBT community with bi-monthly film screenings, workshops, awards, grants, andscholarships
Inside Out is committed to providing a high-profile forum for underrepresented groupswhich 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
standards2. Celebration of LGBT talent numerous events featuring film, video art, music and
dance3. 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 entry2. Reflects diversity of LGBT community3. Engages broad range of LGBT community4. Appeals to cinephiles
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Key considerations
Themed campaignConsistency 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 intopatrons. Ensure the content is clear, comprehensive and enticing.
Distribution Guide distribution will be restructured. Outposts in the city will be moreaccessible outside of the downtown core (west of Dufferin and east of Pape). Approachpopular neighbourhood outlets to join our network (Preferred Local Businesses). Establishmore meaningful, generative relationships with local businesses. Window display and guidepickup 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 todetermine 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 feedbackWhat did they like/dislike about this years festival? Other factors - Website hits and visits, # of contest entries, donations generated, etc
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Marketing and Communications Initiatives
1. Marketing and Communications Vehicles
Promotional MaterialsItem Details Cost
Program Guide 15-18K/distribution $20 000
Posters Quantity/distribution $1 000Postcards 3-5k; street team distribution $600
Print AdvertisingItem Details Cost
Metro
1/6 PageBanner1/6 Page1/8 Page
Run: Best-of basis $1 250$1 785ContraContra
Xtra!
70 CMYK Units70 Blk&Wte UnitsTicket Giveaway Contest
Ad sizeRun date details
Contra
NOW
Full Page1/3 Page1/4 PageContest
Run date details $5 000
Hot Docs Guide
Page Ad Swap
Excalibur (York)
Page Student discountFirst May issue
$300
Broadcast AdvertisingItem Details Cost
Global
2012 Trailer Run date details Sponsor
ProudFM
20-30 sec spots Throughout day Sponsor
OUTtv
2012 Trailer Run date details Sponsor
Outdoor Advertising
Item Details CostCBS Outdoor/ Pattinson
Mall Ad #1 Holt Renfrew Centre (Month of May) $750
Mall Ad #2 Gerrard Square (Month of May) $600
Street Ad Beer Store on Church (Month of May) $700
TTC Subway Ads Subway interior 75 units (Month of May) $3 000
CBS Outdoor/ Pattinson Holt Renfrew Centre (Month of May) $750
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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 trailersas well as a Picks section featuring recommendations by staff, volunteers and localcelebrities to build hype around select films
Personal Invites
Create printout (drink ticket). Ask committees, sponsors, town hall and members to sendout 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 Details Cost
Xtra
Banner ads
E-blasts
120 x 240 px; May
2x Twitter; 1x FB
Contra
ContraNow
Banner ads? Eblasts? Ad size; Run date Contra
OMGBLOG
Banner 160x200 px
May 10 - 24
Swap
Facebook May 10 -24 Max. $50/day
$0.62 CPC~ $1 000
blogTO
Top banner
Events ad
May 10 - 24
Month of May
Contra
Contra
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
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3. Media and Public Relations
Comprehensive media pitch list and story pitches Very granular and targeted, includingstory leaks
Packaged film picks: e.g. Executive Directors Top 10 picks, Programming DirectorsFestival 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 agrassroots 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 becreated to drive the membership campaign. A gift (tote bag) will be provided with everyminimum 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
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Appendix II: 2012 Inside Out Budget
REVENUE
Box Office $103,611
Memberships $71,000
Donations - Individual $70,000Corporate Sponsor $72,750
Award Sponsorship $12,000
Community Sponsors $6,400
Consulate/Embassy Sponsors $0
Total: Sponsorship $91,150
Donations - Corporate $15,000
Advertising $14,735
Special Events $21,500
Ottawa Box Office $18,000
Ottawa Sponsorship $17,500
Ottawa Donations $3,000
Ottawa Grants $5,000
Touring - Ottawa $43,500
Endowment Interest $8,100
Equipment Rental $4,000
Submission Fees $1,459
Miscellaneous $0
Other Revenue $13,559
x Toronto Arts Council $32,000
x Ontario Arts Council $48,400
x Canada Council for the Arts $41,800
x Heritage - Arts Presentation $20,000
x Canada Council - Travel $1,050City of Toronto Lightbox Fund $20,000
x Ontario Investment Fund $10,100
Celebrate Ontario $72,500
x New Government - OTEMPP $14,375
Total: Government Grants $260,225
x LGCA $5,000
x Trillium $55,000
Total: Foundations $60,000
TOTAL REVENUES $764,280
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EXPENSES
FESTIVAL
Director of Programming
Programming Assistant
Misc. Honourariums
Panelist/Artist Speaker Fees
Total: Programming Salaries $64,165
Print Traffic $5,000Guest Relations $4,950
Front of House $6,400
Volunteer Coordinator $1,500
Tech Fees/Staff $8,500
Total: Festival Salaries $26,350
Screening Fees (Intern'l) $23,250
Screening Fees (Canadian) $2,700
Total: Screening Fees $25,950
Awards $10,900
Shipping & Brokerage $12,500
Venue Rental $40,000
Tech & Equipment Rental $3,500Total: Venue & EquipmentRental $43,500
Box Office Expenses $9,250
Comm Rlns/Volunteer Expenses $1,750
Festival Operations $5,500
Total: Festival Operations $7,250
Outreach Programming $0
Tape Dubbing $1,300
Misc. Programming Expenses $3,200
Travel - Programming $10,500
Total: ProgrammingExpenses $15,000Guest Services / ArtistTravel $24,000
Design/Layout $5,000
Printing $16,557
Poster - Guide Dist. $1,116
Total: Program Guide $22,673
Publicist $8,000
Festival Parties $18,000
Festival Trailer $2,248
Graphic Design $9,600
Advertising Expenses $18,000Printing - Festival Promo $7,000
T-Shirts $2,520
Website $13,950Total: Advertising,Promotion & Entertainment $79,318
Youth Project $16,500
Ottawa Festival / Touring $17,000TOTAL FESTIVALEXPENSES $374,356
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ADMINISTRATION
Executive Director
Manager of Operations
Director of Corp Sales
Director of Development
Marketing Coordinator
Festival Assistant
Grant WriterStaff Benefits
Payroll DeductionsTotal: AdministrativeFees/Salaries $266,600
Bookkeeper $5,500
Audit $4,800
Total: Professional Fees $10,300
Telephone $2,750
Internet Access $1,250
Technical Support $750
Total: Telephone & Internet $4,750
Rent $19,000
Courier $2,250
Postage $1,000Total: Distribution (postage& Courier) Costs $3,250Capital Expenditures(Computers) $3,000
Photocopy/Printing - Admin $4,500
Office Supplies $6,500
Travel Office $1,500
Meeting Expenses $1,500
Prof. Dev / Networking $2,500
Fundraising Exp $8,000
Repairs & Maintenance $0
Total: Office & General $24,500
Office Insurance $4,500
Bank Charges/Interest $4,750
VISA Fees $6,500Total: Bank Charges &Interest $11,250
Special Event Expenses $6,000
Scholarship $5,000
Depreciation $1,250
Bad Debt Expense $0
TOTAL ADMINISTRATIONEXPENSES $359,400
TOTAL EXPENSES $733,756
SURPLUS/(DEFICIT) $30,524
Contingency -$7,000
FINAL SURPLUS / (DEFICIT) $23,524
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