TFC Tidbit of the Day 8-Success with VOD

Cable VOD likes films with a theatrical profile. VOD is very marquee (name) driven and genre driven. Its marketing effort is limited, hence the need to have films with a recognizable name in the marketplace or with recognizable “stars”. Regarding Day and Date, cable operators like to note that the film is in theatres while it’s on VOD. In the past, Comcast had asked for a 90 – 120 day window ahead of all digital distribution, but is now sometimes doing Day and Date releases.  It depends on the film, the platform, the distributor, and the campaign.

MAKING SENSE OF DISTRIBUTION PANELS – POST LAFF’s SEIZE THE POWER SYMPOSIUM

The Film Collaborative was recently on a panel at the Los Angeles Film Festival as part of their SEIZE THE POWER SYMPOSIUM which focused on DIY & DIGITAL Distribution. This was the description of the panel we were on and that I moderated and will discuss below:

NEW DIGITAL DISTRIBUTION INITIATIVES
Leading digital distribution executives present new solutions for distribution
as they explain their business models and the opportunities they offer
filmmakers to reach audiences and bring in revenue for their films.

Erick Opeka, New Video
Nolan Gallagher, Gravitas Ventures
Orly Ravid, The Film Collaborative (TFC)
Scilla Andreen, IndieFlix

After the panel was over someone asked how he could decide which one of us to work with; he liked us all. It was clear to me that even though we had just finished an hour long panel at which we each presented our respective companies and then answered questions, it was not enough to make clear to everyone the way in which to relate to each company and how to make decisions about whom to work with in distribution.

Recently on Ted Hope’s blog

Jon Reiss and Ted Hope and many others including filmmakers discussed the relevance of panels and expert books and even more recently Jon Reiss wrote a blog titled “Coping with Symposium Workshop Brain Fry”. That is what I want to address here, specifically in relation to the panel I moderated and was on called “New Digital Initiatives”.

At the LAFF Panel all the companies discussed what they do and here’s some of that information below, and what we recommend a filmmaker do to make sense of information given at a panel.

Gravitas Ventures talked about its focus on Cable VOD and the fact that it works with Warner Brothers (WB) which (when WB takes a film) can lead to a film being available in up to as many as 50,000,000 homes via about 30 – 40 cable operators and up to 80,000,000 – 90,000,000 homes when one factors in digital. When WB does not take the film on Gravitas can at least get the film out to about up to 12,000,000 – 15,000,000 Cable VOD homes. Of course one in this circumstance has to realize that when WB is in the picture, there are two fees being taken as well as two companies being relied on to provide information and to pay. The other aspects to analyze are 1. the benefits of having a studio involved in VOD and Digital often leads to HIGHER revenues from Cable MSOs (Multi System Operators) and digital platforms and also MARKETING LEVERAGE. But, 2. the Studios are also glutted and not necessarily focusing on your film and you may get lost or inadvertently shafted (and I know it’s happened) so one has to have contractual commitments or protective clauses, and 3. They won’t let you keep digital rights usually, though maybe Netflix SVOD; and 4. accounting can be soft on the details. Gravitas does 2-year deals and about 350 -400 films per year and is the largest VOD aggregator at this time. Gravitas noted revenues per film ranging from as low as $5,000 – $250,000. A FILMMAKER must ADDRESS MARKETING and COSTS RECOUPMENT whether in dealing with Gravitas or any other Cable VOD & Digital Aggregator (e.g. TFC also works with Brainstorm Media & Fluent / Lions Gate), or any of the other studios who are or will be opening up to “independent product”.

The Film Collaborative’s entire purpose is to help sift through the information available at the time your film is ready or will be ready for release and help you resolve your COMPLETE DISTRIBUTION STRATEGY. Gravitas Ventures can get you the VOD and digital access you need but they don’t necessarily do much in the way of marketing so that will be more up to you to either have them commit to that effort or do it yourself (and perhaps in collaboration with us and our marketing partners). A marketing plus (+) though for Gravitas is that if WB gets behind your film, they can get iTunes and the Cable Operators to give your film a bigger marketing push. This can be very valuable.

New Video is a very well respected DVD distributor that is known for doing a great job, including on the marketing side, and for being very transparent, filmmaker friendly and very reasonable in its fees. It takes for example just 15% fee for digital distribution, and 20% for Cable VOD but again, like Gravitas, it works with Warner Brothers so that’s two fees there.. (but no different than many distributors who do their digital and VOD through Warner Brothers, such as Oscilloscope, Strand, Wolfe, I think Kino, etc.) Their encoding is all done in-house and all one has to do is supply an uncommpressed file) and it seems to be done cheaply (Gravitas who refers out to Fotokem I believe). New Video noted an “Online Management” service to help track your placement and revenues. New Video noted for digital revenue only that revenues range from a similar low as Gravitas did, $5,000 – $150,000 but I also know there have been times that New Video has generated over $250,000 in revenue for a film but that included DVD sales. It should also be noted that VOD is newer to New Video and also the company’s presented revenue range on the panel was regarding docs. It should also be noted that most films with Gravitas don’t get up to the high, and that high is more for the rare hits such as The Secret and Crips & Bloods. New Video notes the success of films that appeal to young men or tech culture (films such as Helvetica and Purple Violets were successful). And of course all the obvious factors help films success in distribution, names, the right genres, niche appeal, and theatrical release (especially if it goes well).

IndieFlix is a very filmmaker friendly and transparent option too and they don’t lock up your rights and as Scilla Andreen mentioned, they take a more HOLISTIC approach and do more grassroots outreach and public / community screening work for films. They give filmmakers a royalty of 70% (NET but modest and capped expenses if desired). They can do DVD releases and they can get you onto iTunes, Netflix and Hulu, all good platforms, Hulu being the least so but actually quite worthwhile for certain films and it can also simply help drive other transactions too. On the Cable VOD & Broadcast side Scilla noted that IndieFlix was providing content for Broadcast and Cable VOD. IndieFlix explained this to me after the panel about their handling of VOD: they do it “via Gravitas and New Video for now until we are able to deliver direct.  Gravitas refers content to us and New Video will place content on our site. We all play together very well in the sandbox.  I think the real strength is in the partners marketing powers.  We do tell filmmakers so that if they choose to go direct they can. All have chosen to go through us since we work so closely with the filmmakers to market.”  IndieFlix is also starting a “FILM FESTIVAL IN A BOX” initiative that seems cool.  This is what they say about it: “Film Festival in a Box is a social gaming platform that connects people through movies.  A game changer no pun intended and a completely out of the box form of distribution and audience building tool in a tiny little package.  Film Festival in a Box is a game bridging on and off line communities and connecting people through movies. It’s another delivery platform and revenue stream for the filmmaker. It’s non-exclusive.  It’s a game. It’s a social experience. It’s marketing. It incorporates brands in a meaningful way. It is audience building. It’s data collection. It directly connects the filmmaker with his/her audience. It’s more than a game.”

So all in all to answer the QUESTION asked at the PANEL about how do you CHOOSE between service providers and how to sift through the INFORMATION presented on PANELS. HERE’s HOW:

  • Recognize that VOD is still 78% of the revenue in the digital space and if your film has Cable VOD potential (names, major fest awards, solid theatrical release, strong niche appeal, genre appeal) then one ought to find the most financially efficient and productive way to have Cable VOD distribution that takes into account the marketing required to drive awareness and transactions.
  • Not only do the PERCENTAGE of FEES being taken and HOW MANY FEES are taken but knowing you are comparing right elements… some companies make take a smaller fee but also get less from the platforms or MSOs so do ALL THE MATH.
  • Not all companies are right for all films so assessing special talents and interests at companies and experience in handling films that relate yours is key and get REFERENCES.
  • Compare Financial terms of the deals on all fronts (including costs recoupment, Delivery / Encoding…)
  • Look into your ability to split rights when / if in your best interest.
  • Evaluate willingness to memorialize all verbal commitments and promises in writing.
  • and again – MARKETING — who is doing what (and if not you, get it in writing).

– ALL THESE DETAILS MATTER — and where we, The Film Collaborative come in is what we note below about helping you know all your options and analyze and implement them AND of course we also offer direct digital distribution for either 15% fee or nominal flat fees (e.g. $500 – $1,200 depending) and we can get your films onto Cable VOD through our various partners (and we don’t take extra commissions for that); and we can get your film onto iTunes in the same way Distribber does and we’re also working with Distribber too (w/out charging an extra fee) and we are direct with many platforms (all the usual suspects) as listed on our site and the list keeps growing… We’ve very excited some new digital platform deals with two big retailers that we have not officially announced yet, stay tuned! We will be direct with some Cable MSOs (VOD) but that will take some more time. And we do have a MARKETING SERVICES menu and complete menu of marketing service options that we can service in-house and in tandem with our top-notch marketing service partners. TFC is committed to end-to-end distribution education and distribution solutions.

Our first written testimonial (we’ve had many oral ones) really fits into the subject of this blog entry:

“The Film Collaborative fills a void. In Indie distribution you can go out and hire a pricey consultant that seems to withhold information and contacts to lure filmmakers along with the proverbial distribution pot of gold, or you can attempt to wade through all the landfill that exists on the internet yourself (it’s all there but good luck!). This is where the Film Collaborative, come in. They have sifted through it all and presented in a transparent way so filmmakers can determine for themselves where their film sits and take action where it best makes sense.”
- Mark Hug, filmmaker of LOVERS IN A DANGEROUS TIME

That’s truly what we’re about, being a trusted and transparent informational resource and strategic partner / connector to all your distribution and marketing options so you can find and customize the best possible distribution solution for your film.

Long Tail glut, the pending SVOD Wars and solutions we’ll find in 2010

Topics on my mind: The dilemma of the long tail and social networking glut and the trends of the giants. 2010 will oversee the SVOD wars as everyone competes with Netflix for a viable subscription VOD model… Hulu, Cinema Now, Blockbuster, Amazon et al, and including Apple will compete with Cable VOD too. And of course there’s Google which I’ll cover in the next edition.  According to Jon Reiss (filmmaker, blogger, and author of Think Outside the Boxoffice),  ’Studios are experimenting with releasing catalog titles via Amazon’s CreateSpace’ (which one can read about in The Digital Distribution Guide on our website: http://www.thefilmcollaborative.org/digitaldistribution.html ) – and he postures that may create an appetite in consumers and a comfort level in getting non-blockbuster content via the web. Studios are experimenting with release windows to work up consumer appetites.

Avatar is a game changer as far as the experience audiences will learn to expect.  3D film is a growing business. There’s an impact on indie cinema? Mergers continue as Comcast bought NBC Universal and rumors resurfaced of Amazon’s potential acquisition of Netflix (both covered below).  Gigantic was a smaller start-up platform that did not make sense to me because it was too small and too unspecific and offered nothing special and indeed Mark Lipsky has ankled it this week.  And now, in answer to Comcast, The Walt Disney Co. and CBS have expressed interest in cutting deals with Apple to offer programming as part of a monthly Internet TV subscription service. The media companies are in early discussions with Apple on the service, which is being positioned as a competitor to cable and satellite TV. (This is not new, Netflix has already had streaming video content deals with TV networks, such as Starz and MTV for example). Comcast (the leading cable company) and the bigger Cable VOD platforms are decreasing their appetite for Indie cinema, at least in the short-term, and going for the more sure things, such as studio library content, marquee driven content and TV.  The rise in supply of indie cinema has made it harder for individual films to compete in a crowded market place of blockbusters and media conglomerates who cover them. I cover this more below.

Old rumors never die. In our Digital Distribution Guide we have previously covered the rumor that “Amazon may be buying Netflix”.  BusinessInsider.com and Reuters reporter Anupreeta Das have all pointed to heavy trading activity on Netflix (Nasdaq: NFLX) call options as the speculative root of the born again rumor. Amazon.com (Nasdaq: AMZN) is the logical suitor, as always. Given Amazon’s ownership of IMDB and WithoutABox and its search technology maybe having the two merged will help the long tail films better find their audiences. Amazon, Apple (Nasdaq: AAPL), and Blockbuster (NYSE: BBI) have been struggling in selling digital celluloid. Cable giant Comcast (Nasdaq: CMCSA) is losing video subscribers. In that time, Netflix is a great trusted brand that knows its customer and its customers know how to find films. Amazon needs a digital distribution solution better than its current offerings.

Speaking of Netflix which recently initiated a partnership with retail giant Best Buy, CinemaNow is now directly competing. CinemaNow’s founder went to work for Lions Gate (the studio behind the release of Precious) but CinemaNow is still in the game. The partnership between Best Buy and CinemaNow includes both physical and digital media.  More particularly, the deal will allow consumers to buy DVDs from Best Buy, then watch the same movie through CinemaNow on their computers, smartphones or Blu-Ray players.  It’s almost like buying a DVD and getting a digital copy on the second disc, but now you require just an Internet connection rather than the digital file.  The exact details of the partnership have yet to be revealed, but it’s expected the service will launch in early 2010, just as soon as some studios jump on board. (Of course we presume some day soon Studios will be direct with customers off their own sites).

Best Buy’s plan will require a DVD to be bought, but there’s no guarantee that the DVD will stay with the buyer, or that the stream will.  If it does work, however, it will add yet another streaming service to our media boxes.  As it stands with Netflix, Amazon Video, Blockbuster OnDemand, Hulu among others, we already have quite a few.  I expect some attrition and survival of the fittest.

Back to the topic of Long Tail and the increased competition in the indie film space. I wanted to link to an interesting article in The Economist: http://www.economist.com/displaystory.cfm?story_id=14959982

I select and quote a few key paragraphs from the article below. In summation, it’s about how the growth of “Long Tail” (as Chris Anderson of Wired coined it) has lead to a glut, a competitive crowded space where only the strongest survive, and hence its own demise. Some niche content maintains its appeal but much of the middle never makes the radar and the biggest blockbuster films continue to rise because they are the most known and talked about.

From The Economist:

“Ever-increasing choice was supposed to mean the end of the blockbuster. It has had the opposite effect “NOVEMBER 20th saw the return of an old phenomenon: the sold-out cinema. “New Moon”, a tale of vampires, werewolves and the women who love them, earned more in a single day at the American box office than any film in history. The record may not stand for long: next month “Avatar”, a three-dimensional action movie thick with special effects, will be released…  There has never been so much choice in entertainment. Last year 610 films were released in America, up from 471 in 1999. Cable and satellite television are growing quickly, supplying more channels to more people across the world. More than half of all pay-television subscribers now live in the Asia-Pacific region. Online video is exploding: every minute about 20 hours’ worth of content is added to YouTube. The Internet has greatly expanded choice in music and books. Yet the ever-increasing supply of content tailored to every taste seems not to have dented the appeal of the blockbuster. Quite the opposite. This is not what was predicted by one of the most influential business books of the past few years. In “The Long Tail”, Chris Anderson, editor-in-chief of Wired, a technology magazine (and before that a journalist at The Economist), argued that demand for media was moving inexorably from the head of the distribution curve to the tail. That is, the few products that sell a lot were losing market share to the great many that sell modestly. By cutting storage and distribution costs, the Internet was overturning the tyranny of the shop shelf, which had limited consumers’ choices. And, by developing software that analysed and predicted consumers’ tastes, companies like Amazon were encouraging people to wallow in esoterica. Such companies did not just supply niche markets—they helped create them….” (Note: The article sites research and statistics from the music industry, television, film and books and concludes)… “In short, just because people have more choice does not mean they will opt for more obscure entertainments. That is especially clear in the book trade. But nobody knows quite what to do. The old-media world of limited choice, in which any product that was not too objectionable was guaranteed a decent audience, was a comfortable place. Pleasing a customer who can choose from several hundred films and television programmes even without getting up from the sofa, by contrast, is an unnerving prospect.”

I referenced at the beginning of this post that I wanted to cover the clutter in social network marketing as well. Huffington Post is going to offer sponsored Tweets.  Every other blog or article in this business waxes prolific about Facebook and Twitter… how will unique voices continue to be heard and find more listeners when corporate brands use this space as much as they do Second Life to hock their wares.  We’ll have more about this and more about digital distribution platforms (especially mobile) and opportunities for Indie Filmmakers in the next edition.  One thing we can be sure of, there will always be independent filmmakers and their audiences. We’re committed to connecting them as directly, dynamically,  efficiently and inexpensively as possible, always.

The Collaborative will keep the information and service support coming in 2010.

Have a happy and safe new year!