Back from a quick stint @ SXSW. What an impressive festival / new technology conference. So many great panels and stats, some of which we will synthesize later this week in one new post. But today, as we come out of Beta, I wanted to guide people on how take in the plethora of information that comes about from panels and posts and articles about distribution.
Cable and Satellite VOD is on everyone’s mind and a common discussion topic on panels and in articles because it is still the lions share of revenue in digital distribution (it has been about 80% and now sliding down to upper 70’s and will soon be in the 60’s as Internet / Broadband and IPTV grow). The first thing I noticed is not everyone means the same thing when discussing Cable VOD revenues and terms and not every filmmaker knows to ask the right questions. So first off, when reading about or discussing revenues, remember there are three kinds of revenues and “Gross” may not mean Gross to *YOU* the filmmaker. One may want to clarify if the numbers are the Gross that the cable operators get? the Gross that the Distribution company or Aggregator gets? or to the FILMMAKER? There’s a big difference. And when analyzing VOD options one will want to know how many middle men are in between the revenue coming from the Cable operators, what sort of traction and pull the middle men have with the cable operators in terms of placement (because there’s a big difference between 12,000,000 homes and 50,000,000 homes and there are about 40 operators, Comcast and Time Warner being the leading two among them). And one will want to know the splits with the Cable operators — IFC and others get 50%. Studios can get more than that, i.e. better splits, and also better promotional leverage but will only take on more commercial films, generally speaking. Cable and Satellite VOD is an important revenue generator but it’s not the only one and it’s not going to happen for every film so we encourage filmmakers to do their homework before hyper-focusing on that. Non-Theatrical & Automated-House Party-Screenings can generate even more money than Cable VOD, depending on the film… so that brings us to the focus of this blog entry — in Distribution, it’s all about making informed decisions, and utilizing as many windows and the best timing possible. You can’t do online distribution before Cable VOD but you can do it afterward. If you are doing a theatrical then ideally coordinate that with Cable VOD, knowing that operators want to premiere films if possible or benefit from a successful theatrical. Both IFC and Magnolia do day and date and find that to be a mutual beneficial driver of revenues. Both the RENTAL and TRANSACTIONAL windows make money on Amazon and iTunes so no reason not to do both in their respective ideal times. Whether one uses the FREE model as a driver for transactional (e.g. B-Side and W.O.M screenings), or VOD & Theatrical Day & Date as mutual drivers (as Magnolia and IFC and others do).. or the $1 transactional price-point that works so well for iTunes and Red Box or a subscription model that works so well for Netflix and that Hulu is trying. As noted below, YouTube is trying a rental model so that filmmakers can set their own prices and viewers know that revenues are going to them.. we support this of course but until its a proven model, we encourage filmmakers to utilize as many options as possible and all in their right time.
At SXSW there was a panel called: “Nobody Wants to Watch Your Film: Realities of Online Film Distribution #watchyourfilm
The panelists were: Efe Cakarel (The Auteurs.com), Graham Leggat (San Francisco Film Society), Peter Becker (Criterion Collection), Sara Pollack (YouTube)
TFC’s comment: We love all the platforms and services at the panel and frankly there has always been a combination of Rental, Transactional and Subscription and Ad-Supported / Free as a transactional driver business and we believe there always will be and all are sustainable and valuable and should be utilized together. We love Efe at The Auteurs and will be working with them, and are very impressed with YouTube’s new model and look forward to working with them too and of course hope it works well over time. We are helping filmmakers build their own brands and platforms as we build ours and connect them to all key revenue generating ones as well. Therein lies a total solution so filmmakers should not have to choose between parts. Platforms are stores, not distributors and just like all good brands, one’s film should be ubiquitous and for as long as the bigger platforms are key revenue generators and audience aggregators, we will continue to treat them all like stores, with no exclusivity -for the best health and sustainability of the filmmakers. And we don’t take rights either!
Today The Film Collaborative (TFC) comes out of Beta whilst we continue to develop our Yelp for Distribution. Stay Tuned!
Orly Ravid March 15th, 2010