Napoleon Dynamite’s Secret Sauce

How did Napoleon Dynamite succeed in the box office, and DVD sales against all odds?

Join us as we analyze the outliers of film, and discover what made them work when everything tells us we shouldn't.

Brought to you by Topsheet Inc.
Editor: Kevin Bazzle 
Host: Caleb Pearson
Guest: Stanley Yang
Research / Guest: Erin Pearson
Guest: Kevin Yang

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Transcript

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Caleb Pearson 0:00:

So, about two or three weeks ago, I was surfing online and found myself lost in the depths of YouTube. I found a video that was talking about Netflix. Netflix, apparently, had a problem with its algorithm and they put up a million-dollar prize for anybody who could, basically, refine their algorithm by about 10%. Netflix’s algorithm focuses on pairing the right film with the right person. It looks at your habits and figures out, “hey what films does this person like based on how much of a film [they] watched? Did [they] give it a thumbs up or thumbs down? Did [they] ever return to it again?” But there's a couple of films that were giving them a bigger headache than the rest. One, in particular, stood out. It was Napoleon Dynamite. 

You see, Napoleon Dynamite was weird for them because it went to suggest it for people who thought it was a shoo-in, [people] that would love the film and they would hate it. And it would not suggest it to people who would constantly search for that film. They couldn't figure out who in the world would want to watch this film and who would like it. There are no distinguishing factors about them, at least from an algorithm’s point of view. This video got me thinking about how strange Napoleon Dynamite was. Not necessarily in the story sense, that's a given, but in the sense that this film had no star names and had a tiny budget and a first time director. How in the world did this film become as big as it was? And why are people still talking about it today? 

Caleb Pearson 1:46:

Hey and welcome to CineBiz! My name is Caleb Pearson and I'll be your host. This is the podcast where we dive into the outliers of film. We look at the films that just shouldn't have made it, whether [that’s] due to lack of budget, lack of studio support or no star names and we figure out what made these films successful. 

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Caleb Pearson 2:27:

Hey, can you hear me?

Kevin Yang:

Yep.

Erin Pearson:

Yeah.

Stanley Yang:

Yes.


Caleb Pearson 2:33:

Cool, so I just wanted to give you a call ‘cause I want to get your first memories of the film Napoleon Dynamite.

Erin Pearson 2:42:

My first memory... I did not like the movie and, I mean, it could have been because I went to the theater with my parents that kind of puts a damper on things, in general, as a 14-year-old. I wasn't sure what to think about it because it’s kind of one of those things where I was like, “What? What was that?” It was almost my first introduction to independent films because, you know, living in a small town you pretty much get, like, the big ones and then everything else is just whatever. So it was really weird and I wasn't sure what to think about it, but then we started quoting it and quoting it and quoting it and finding it absolutely hilarious outside of the film. And everybody at my school was quoting it and doing the dances and dressing up as Napoleon and, you know, just whatever. So then, later on, we rented it as a family and just died laughing. We thought it was the funniest movie there ever was. We were kind of perplexed as to why we didn't understand the first time.

Kevin Yang 3:46:

It was definitely different from any other normal movie or like movies that you watch. It’s very, like, dry but there's like no music involved, I guess. It's just very abnormal to see. And I guess they also relate because it's like part of the school, as well, so it was definitely just out of the ordinary from what you normally see in the movies.

Stanley Yang 4:13:

My first memory of Napoleon Dynamite was that I think I was in high school and I remember seeing the ad for it on TV. I was kind of like, “oh, that’s kind of a dumb movie, but then kind of funny at the same time.” Kind of almost a “Superbad” kind of movie, but then it was definitely something that was marketed very well and I wanted to go see it. It was definitely one of those memorable things that you remember existed. It was definitely counter-culture and very cool at the time.

Caleb Pearson 4:51:

My memory is very similar to the rest. I remember all my friends talking about it. I remember seeing a shirt or two and just kind of wanting to understand it and kind of wanted to understand the jokes and what was so funny about it. But when I watched it, it sort of went over my head. I didn’t quite think it was funny and most of my family didn't either, except my mom. My mom laughed hysterically through the film. She quoted it and it was weird, her enthusiasm made the film funnier. Her thing was that Napoleon reminded her of a kid she grew up with- kid she was friends with, but it’s funny how familiar that awkwardness and that rudeness was. And after a couple of weeks, we went back and watched again and, for some reason, the second time the film was hilarious like we just got let in on the inside joke.

Caleb Pearson 5:51:

Now for us to understand how this indie- awkward film became a pop-cultural and financial success, we have to go back to the beginning. We have to understand where it all came from. The year was 2003. Now, remember, in 2003 “Friends” was still on the air. The hottest cell phone was the Motorola flip phone, the one with the buttons- not the new one with the touch screen. Facebook has just launched, exclusively for a few colleges. But then a short film appears. It's called“Pelica” (I really hope I'm pronouncing that correctly). But it was a black and white film about an awkward young man who threw a toy outside of a window and was rude to the kids on the bus. Yes, that kid was Napoleon Dynamite. It was a student short film that was released at Slamdance, a small Film Festival, literally, right up the road from the Sundance Film Festival as it goes on. [It’s] something that’s a little bit more counter-cultural that digs deeper into the Indie roots and releases them in front of an audience and the audience loved it. They understood the joke. It actually did so well that it landed a private investor. Somebody who put $400,000 for them to make the feature film version of it. 

You filmmakers know that $400,000 is not a lot of money. As a comparison, his next film “Nacho Libre” was a 25 million dollar project versus this $400,000 film. That’s actually crazy. I didn’t actually realize that Nacho Libre was 25 million dollars until I just looked it up.

Erin Pearson 7:31:

Yeah, well they had some name actors and, you know, a whole lot more going on in “Nacho Libre”.

Caleb Pearson 7:37:

They go off and they film this film, literally, that summer, you know, in the heat. Was it in Idaho where they filmed this?

 Erin Pearson 7:44:

Yeah, Idaho. Preston, Idaho. His hometown.

Caleb Pearson 7:50:

So they film this in his hometown. Apparently, it was like 80-90 degrees and humid the entire time they were filming and they filmed with this rag-tag group of people. And think about this: we have a director who has never made a feature film before. The producers have never ever made a feature film before. There’s only one producer out of the three producers whoever produced a short- from anything I can find on IMDB. And you have actors who, most of which, had barely worked. Very few of them were actually working actors. And they come together, they make this film. Get it done in 23 days. Which, I have to say, I was, as you know, line producing in the past, budgeting films… $400,000 in 23 days does not go far. Especially when they're filming on actual color film. Kind of blows my mind that they were able to do that.

Erin Pearson 8:41:

Yeah, I'm assuming some student discounts were involved and a lot of favors were called in.

Caleb Pearson 8:45:

Yeah, they’re probably still using their student IDs and everything they could to bring that budget down.

Erin Pearson 8:54:

I know at least some of them were still in film school. So even if they had graduated, it’s very possible that they used some of their crew to get them the discounts too.

Caleb Pearson 9:06:

You know, what's funny, like, I do not suggest- I'm not necessarily suggesting this, but I've been that person who was not in film school and really needed something at a budget so I hired as many film students for producers that I could to get it down. I have a feeling that this was definitely a card played in this film.

Erin Pearson 9:27:

I am sure it was, I mean, most of them were film students anyway.

Caleb Pearson 9:31:

Right after they completed production they [went] straight in editing and Jeremy Coon was the head editor on this. He was working with Jared and they're working their butts off getting this done in time. They really wanted to make the deadline of Sundance, but sadly, the film wasn't coming together in a way where that made sense. They weren't complete with a deadline approaching- day, day out. And Jared said, “Hey, here’s what we’re going to do. We’re going to take another year, we're going to keep editing this. We’ll make it the best film we can and will submit it next year.” Jeremy, then, doesn't have that. Behind Jared's back, he goes and submits the film to Sundance. You know, as you can imagine, Jared was pretty pissed. He thought they just threw away their opportunity to make Sundance- and that was his dream. There was an audience at Sundance that had to see it and he thought he threw it away by submitting an incomplete film. Weeks go by, and the submission processes aren't fast, and they assume the worst, but then the unthinkable happens. They get accepted into Sundance. Head of programming, his name is Trevor Groth, he had watched the film and he related to it. It reminded him of his childhood. It reminded him of him and his friend when he was growing up. He actually said, in the 20 years of being a program director of Sundance that was the first film he ever went back and re-watched.

Now this is the beginning of the conversation. This is one of the most important parts of this case study: getting your film in front of the right people. If it wasn’t Trevor Groth, if it was somebody else who was the program director at Sundance. I often wonder would the film have ever made it in? And if it didn't, would we even be talking about the film today? Trevor fits into that niche group of people who related to the film. Even thinking back to my story; my whole family versus my mom. You see, my entire family did not get the inside joke, but my mom did.  What are the odds that that program director was the perfect person to watch that film when so many people did not get it on the first viewing?

Stanley Yang 11:46:

Yeah, it's like that thing, I think we talked about, about finding your “rat people”. Most people hate rats, but then there is a weird percentage of people who like rats. When you find your rat people, the people that go “oh, yeah! That’s the cutest rat!” And then like 80-90% of people want you to kill the rat. But then that one person resonates with what you're putting out there, and then, kind of exactly like your mom who’s laughing. That's all that matters. One percent of a large number is still a large number. So you don't have to resonate with everyone, but then you get that avid fan, the people who really love what you're doing, and that really scales up better than anything. When you find that little fringe group, they can scale things up. They are ride or die with you.

   Caleb Pearson 12:36:

Yeah, I think that is one of the best points, it is “find your “rat people''. I mean, it doesn’t sound fabulous or glamorous, but I think it's one of the things we need more of- especially in the world where we have Netflix, Hulu, Amazon, Apple TV- all these different streaming platforms. All these different digital mediums in essence. We actually speak to small groups of people and make champions out of them. It’ll be a lot easier to make champions out of people who already love your product versus trying to convince people to like it.  And, something very interesting about Napoleon Dynamite is, they did this before it was easy. 

You know, they just subconsciously knew who their “rat people'' were. Who the people were who would love this film. Think about when they first showed the short film at Slamdance, literally right up the road from Sundance, the audience erupted. They found the people who would ride or die with this product. They found the people who would champion this and tell their friends about it. So going back to Sundance was a bigger stage, it was a bigger population of that same audience, getting it in front of all the people who had the money. The cool thing is, these days, we can look at an audience and reverse-engineer them. Back then, they didn't have the tools. I mean, think about this: Facebook had just launched. These days I can go on to Facebook business and, if you've never done this, I implore you, please do this. Go on to Facebook business and, let's say, you have a film that’s very similar to “Moonrise Kingdom”. Meaning,  I know the audience from “Moonrise Kingdom” will like my film, so I can type that in and put that in the parameters. I can put that into “United States” and I can see, “okay, what cities do they live in? Is it mostly female or is it mostly a male audience? What other pages do they like?” And so, what I can do from this is; I can focus advertising on that market. I’m not going to waste my dollars in other places where I don't know if people like this film. I'm going to focus on the champions of “Moonrise Kingdom” since I know that they will, most likely, champion my product as well. 

I can give them free stuff, I can bring them to premiers, I can just advertise it to them- knowing that they're going to speak about my product. And there are so many other tools we can use to do this after we get that information from Facebook Business. We can go to Google Trends, we can go to Ubersuggest, we can go to all these different places and really find our market and speak to them directly. Since we know the cities that they live in, we can do a limited premiere in those cities, equipping those people to watch this film. Back then, they had none of this stuff. So Jeremy and Jared were purely working off of their gut instinct, knowing that, most likely, my core audience is there. Most likely this is where my “rat people” live. And their bet was right.

They premiered their film at Sundance. Jeremy and Jared made pins that said, “Vote for Pedro” and they passed them out and they tried to get people to show up to the screening and it worked. The audience erupted, they actually got in a bidding war for their film. It was between Fox Searchlight and another smaller distributor. They ended up going with Fox Searchlight, not only due to the money but due to the marketing plan Fox Searchlight had.

So get this, from what we can tell, Fox Searchlight offered them 4.76 million dollars. That’s already ten times the budget they put into the film. So from a $400,000 budget, they're already raking in four million dollars. That is good business. They found a way to make a product for a small amount of money, that spoke to the right group of people, and they already got it before it was even distributed in 10 x return. So Fox's idea for advertising and distribution really matched what Jared and Jeremy were going for. They went Grassroots. They went boots on the ground. They first launched a website that had a fan club on it where people can talk and ask questions, but really sold merch and promoted the film. And then they only released their film in 6 Theaters at first. It was under 100 theaters for the first month of release. That is completely backward from the typical model. Most films gage their film success in opening weekend numbers. This film said, “No, we’re going to take things slow, build our audience, and we're not going to burn ourselves out.” They would show up to these premieres and sometimes have cast [members], a lot of times with the merchandise- they would give them away, they would reward people who were coming back for the second time. 

You see, what they're doing is shrinking the audience instead of growing the audience. They're going to equip the most excited people about the film by saying, “Hey, not only who's going to show up to these theaters, but who's going to come back again? Who sees it that valuable, to come back again? And let me equip you with merchandise that says the phrase from the film.” So it’s going to open up a conversation like, “Who's Pedro?” and “What about Tina?” Literally, they’re equipping their champions with weaponized phrasing from the film, so it sticks in their minds and they never forget it. 

Erin Pearson 18:00

Honestly, I commend them because, you know, doing what I'm doing with, you know, the blogs for Topsheet and learning about search engine optimization and, you know, all this kind of stuff. To do that sort of thing without the technology that we have today, I mean, it seems impossible. So whatever they did to really figure it out and hone in and take the time to really process through who their audience would be, and then to do all the legwork to figure out how to get it in front of them... they knew that they just needed to get it in front of them. They had so many free viewings for people too. “Just as long as somebody sees it I know they're going to love it” and they just ran with that heart and that attitude. And I think that, you know, it's just those people being involved and being so involved and so ready to see the success of this film, I mean, it's just remarkable.

Stanley yang 18:56

I believe the secret recipe to what they were doing was that they figured out how to hack virality before... I mean, they kind of set down the blueprint on how to do it in a lot of ways. ‘Cause I'm even talking to a lot of movie producers and people now like it's really common that people start hiring marketing agencies to start making memes and start making things that are culturally relevant and then they will start sharing memes to the target audience that they would want to promote this movie. I think Napoleon Dynamite was able to find the “rat people”, the people that are most likely to resonate perfectly with what they're trying to do and then they, basically, targeted those people, gave them things that made them- like the t-shirts and stuff- made them super viral. I can still remember those t-shirts that people wore like “Vote for Pedro”, so you remember a lot of the little things.

Caleb Pearson 19:57

Right, I completely agree. They were so good at making people remember their film and talk about it. It's interesting, even in the release, talking about in June they released in 6 theaters and then slowly grew to a hundred and slowly grew from there. They didn't hit a thousand theaters until mid-September- which is brilliant! Think about it, that's like two or three weeks into the school year. So that entire time they're building and equipping people and sending them back to their schools, so that they talk to their friends about it. The larger demand for the product. They're really writing the book on how to find your audience and how to equip them in small numbers so that they speak to the masses for you. I'm more likely to go see a film that my friend tells me about than a film I see on TV.

Let's talk about that for a second. How many of us are watching commercials on television anyways? How many of us are even watching cable or network television? Even if we are, we're probably staring at our phones during commercials anyways. So, why are we wasting our money there? What these people did was find their audience before they even had the digital tools to do that. Equip them and empower them and then slowly track with them, not depending on opening weekend numbers to predict the success of the film, but allowing their fans to create demand and grow with them.

According to box office numbers, in 2004, Napoleon Dynamite was number 68 on the charts. Number 68! That’s pretty low. Number one was Shrek 2, which is interesting, ‘cause how many people are still, today, talking about Shrek 2? Right? Napoleon Dynamite created a legacy by creating a memorable product and equipping those “rat people” to talk about it. In DVD sales it exceeded expectations. From everything we can tell, it made about 139 million dollars in DVD sales over the next few years. So that means, this $400,000 budget [film] sold for 4.72 million dollars, and then the box office came back at 42 million dollars. This is a winning product. This is a film that did phenomenal things- and then on top of that, it goes on to make 139 million dollars more in DVD sales! Why don’t we have more films thinking like this? Thinking: how do I speak to smaller audiences in very targeted ways and ways, that will grow that market and make a return on investment? We’re doing these crapshoots by homogenizing films that speak to everyone and that can be played in any nation- which doesn't always work. We've seen huge flops like John Carter from Mars or the RIPD, right? These films lost tens- if not- hundreds of millions of dollars. We live in an age where we can speak to individuals wherever they're at. We know who the individuals we're speaking to are, so why don't we make films for them? Lower budgets, focus on a small group of people, and we might be able to see numbers like this if we do the marketing and the business right. We need to be thinking like startups. Who is my core audience and how do I grow them? We need to stop thinking in the way of painting with a broad stroke or, as I like to say, shotgun marketing- just shooting into the dark and hoping it's something.

Now, what I'm not saying is that we need to compromise the art side of this. I think we need to compliment it. Too many times as artists, the writers, the directors, all these people are being kind of pushed by executives. We've seen people like Joss Whedon leave Marvel because there's too much executive pushing. What I'm saying is, we need to free them to speak to their smaller groups of people. And yes, the compromise is a need to work within a budget that is comparable. But if we can balance the business and the art- where the business promotes the art and the art works within the business constraints, we can see more successes. We can see more independent films, in this day and age, succeed than ever before. There are so many ways to get your film to your market. There's literally a television in everyone's pocket that can stream 4K films straight to them. We don't have the barriers we used to have: the barrier to entry has been lowered, so let's speak directly to the people we want to speak to, let's make films for them, let's say those weird things we wanted to say, and let’s market it directly to them. Let's balance the budget with the vision and make it work together. A film that makes a profit is better for everyone on the set, so if everybody from the director, the writer, the producers, even down to the grips, work together to save money and make a film that makes money, everyone wins. People do a lot better having “The Avengers” on the resume rather than “John Carter from Mars”, correct? It’ll stand out to them and they’ll think of them as quality. So if you take these independent films and make something that makes it’s budget back, it’s going to do better for everyone. Everyone will work more, there will be more films that are able to be made because now there's a business plan that can back it up. Investors are scared to invest in the film industry because it’s uncertain, but it shouldn’t be. We have the tools to measure the market. If you're making your unique product, if you're making something that speaks to a small group of people, you can go online right now and you can estimate the size of the audience. You can look at how many thousand people like films that are similar. You can look at the box office revenue, and you can look at the star names that you have and how they compete in this space and you can roughly estimate. And if you go under that and aim at a more narrow market and become more unique, you’re more likely to be talked about. 

It's the soda company principle. The concept of: if I’m creating a soda company, if I create a company that competes with Pepsi and Coca-Cola then that's a problem. I shouldn't be making another Cola. I should be making something unique, something remarkable. It would be so hard to make a cola that's remarkable, right? Why would somebody go and talk about your Cola Company when Pepsi and Coke dominate the market? You'd be better off making a kiwi soda, right? You’ll hit a smaller group of people, but if you do a good job, they’ll speak so highly of you to their friends- who may not like kiwi as much as them, but they’ll speak about it in such a great way that it’ll get them curious. Expand your market slowly, keeping a cost low, and your market constantly growing.

Caleb Pearson 26:56:

So here are the takeaways from this Napoleon Dynamite case study. Find your “rat people”, focus on them, equip them with tools to market your product, and serve them better than you would serve anyone else, so that you can grow your market slowly. If you are an independent film, you don't have a huge budget, but you want to make a film that makes returns and you want to continue to make films after this, do those things. Utilize those tools we talked about, make sure you're on Facebook Business, make sure you're on Google Trends, make sure you’re looking into your audiences and understanding them. After you have a script, you can start predicting who this script is for and you can start understanding what the right budget for this film should be. And, maybe for you, you don't have to get your film into Sundance or any of the huge film festivals. If you're making a horror film, maybe you should focus on just hitting the horror film festivals. Speak to the people who want to be spoken to about your product and then make something remarkable for them, something different, right? Remarkable means “worth remarking about”. So make something remarkable for them- that they’ll go and tell their friends about it. Make it stand out from the other horror films and spend your money wisely. I think way too many independent films go in with a budget for production and then never think about distribution. The problem is; if you are an independent film you need to have at least some money set aside to get into film festivals. To, not only get into film festivals but to promote it to the right people at the film festivals, so they show up. So if you're making your budget for your independent film right now, please set aside money to market it. If it’s to make those pins, well fine. Or maybe what you can do is: figure out who's going to be there that fits your market and market directly to them. I mean, Sundance has an app where you can, pretty much, see everyone who's there. They actually check-in so you can direct-market to those people and you can actually learn what their interests are and you can give them something to talk about. Be clever and be unique. We have so many more tools than they did when they made Napoleon Dynamite. We believe that this should be the Golden Age of independent filmmaking because more unique stories can be told and more unique stories can reach their audiences.

Caleb Pearson 29:19:

I'd like to thank my co-founder Stanley Yang for jumping on the phone and answering my questions about a start-up business that correlates with filmmaking. I like to thank Kevin Bazzell for editing this podcast. As well as, Erin Pearson for jumping and doing research for us. As well as, Kevin Yang for giving us his memories of Napoleon Dynamite. 

As well, I would like to thank all of you.

Thank you guys for listening. Really, this podcast is for you. So, if you have any thoughts, ideas, or even questions, go to [topsheet.io](https://topsheet.io/). Jump on there, get into our chat, and send us a message. We would love to know more about you and would love to make a podcast that is better for you. Tell us what you want to hear. We'll do the research and we'll try to find the answer. 

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