Tag: VoD

Distribution: Aggregators vs. Distributors

In the wake of the seeming demise of Distribber, which was one of the main ways in which filmmakers could get their work up onto major online platforms, it seems that it is still important to indicate the difference between aggregators and distributors – as well as between the two main types of aggregators:  aggregators for hire and aggregators by percentage.    Yesterday I was interviewed by Jeffrey Michael Bays and Forris Day for their Get Real: Indie Filmmakers  podcast about the Distribber situation and discuss some potential solutions.  You can find it here.   But first some background that most filmmakers still require:

Distributors are companies that will acquire a film and  take control of all the distribution and marketing for that film.  The hope/dream from  filmmakers is that this distributor will release it in the best possible way to audiences and in doing so achieve that filmmaker’s goals.   Most filmmakers are eager to move on to their next project.  The aspiration on the part of the filmmaker is that the distributor will understand the film and its audience and give it the release it deserves. Sometimes this happens, sometimes it doesn’t, often in between.

Distributors will argue that they invest time and money (including hopefully an advance for the film)and in exchange, the they want to take as many rights and territories for as many years as possible.  Many distribution offers are are for all-rights in either the US, North America or the world and can run from 15-30 years.   You need to have either gotten a nice advance, or have a lot of belief and trust in that distributor to take that plunge.

While there are many very good distributors now, there are many reasons why a filmmaker may not engage with an all-rights distributor.  (for future posts)

The alternative to an all-rights distributor is to pursue a split rights or hybrid strategy.  This is a vast subject and has taken me a book and much writing since to explain.  But for this post we just need to know that an essential component to a hybrid release are the digital rights.  Generally these rights are handled by one form of aggregator who just as the name implies aggregates content and then presents it to the major digital platforms:  iTunes, Netflix, Amazon, Hulu etc – as well as usually cable VOD outlets.

An aggregator for hire is one that you pay a flat fee and in exchange they will shepard your film through the encoding process on TVOD (transactional VOD) and AVOD (Ad supported VOD now sometimes called ADVOD)  as well as sometimes pitch your film to SVOD (subscription VOD).  Beyond putting your films on platforms, they don’t promote your film.  That is up to you. You keep 100% or nearly 100% of all revenue that the aggregator receives from those platforms from the sale/rental of your film.  The filmmaker pays a fee for each platform the aggregator delivers to (and sometimes pitches to).   Distribber was one such aggregator.   Others are Quiver, Bitmax and The Film Collaborative (who go through Quiver).

An aggregator for percentage will generally (although not always) front the encoding costs (but they generally always take these expenses off the back end).   They  will promote your film to all the platforms they have relationships with including not only broadband but also cable VOD.   However, they also take a percentage of the gross return from those platforms.   In general they argue that they will market your films – in many cases this is in the form of what is called merchandising.  Merchandising is when the aggregator promotes their films to the various platforms arguing for prominence on that platform.  One of the most common of these is the New and Notable section (or even the front page) of iTunes.   This placement can help with one of the most common problems in our sea of content – a film being found.

Many of these aggregators for percentage do not consider themselves aggregators.  They will pitch your film for  broadcast in additon to VOD (they may also handle other rights such as educational, airplane/hotel, etc) and hence actually consider themselves distributors (even though many don’t do theatrical or semi theatrical which used to be a cornerstone of distributon).

Common to all aggregators (and distributors) is that one of their key roles is to collect money and pay it out to the filmmakers (after deduction of hopefully specified expenses).    Finding out if your potential distribution partner pays on regularly and on-time is essential.  You normally do this by asking other filmmakers who have worked with them.  You should always vet any distribution partner by talking to at least two filmmakers who have worked with them recently.


And this was the rub with Distribber.  Until recently they were very well regarded and had a reputation of paying their filmmakers.   This unfortunately seems to have changed with many filmmakers indicating that not only have they not been paid, but cannot seem to get a response from the company.   Check out the podcast indicated above if you are one of these filmmakers who went with Distribber.  If you have not – stay tuned for future posts on how to handle your release – digitally and otherwise.

10 Ways in Which I Would Release Bomb It Today

Posted on by Emy

Chris Horton asked me to write this post for the new Artist Services website that Sundance has set up. However, many filmmakers don’t have access to that site, and so I am posting it here on my blog for anyone to be able to read. Here is the post:

In 2005 I started a documentary project that became Bomb It which premiered at the Tribeca Film Festival in 2007, was released on DVD, iTunes and Netflix via New Video and has had an extended life on VOD (Gravitas), Web series (Babelgum), various foreign sales (PAL DVD this month on Dogwoof) etc. As many of you know, my experience releasing Bomb It inspired me to write a manual for other filmmakers to release their films in this new distribution landscape: Think Outside the Box Office. Chris Horton approached me to write a post on how I would release Bomb It in today’s distribution landscape (and knowing what I know now). I’ve actually thought about this a lot (mostly kicking my self for what I could have done better!)
Continue reading →

Guest Post by Jon Fougner: Cinema Profitability Part 2

Posted on by Jon Reiss

This is Part 2 of Jon Fougner’s guest series on Cinema Profitablility – today he focuses on the products that cinemas offer:
Products

Cinemas’ suppliers have leveraged the proliferation of alternative retailers for their products: DVD, cable, VOD, Netflix, iTunes, Hulu, and more. Cinemas, meanwhile, have barely experimented with sourcing alternative product. The result is an oligopoly5 (the studios) selling to a captive market (the cinemas), a game theoretical nightmare for the buyers, even if they are an oligopoly of their own. That translates to a 55% revenue share back to the studios on tickets. (The other half of gross profit comes from food, sold at an 85% gross margin.) And the theaters know it could get worse, as more films go day-and-date or nearly so.

The good news is that the pending deployment of digital projection will reduce the fixed cost of showing a given product on a given screen to nearly zero. Without having to recoup the cost of manufacturing and shipping a physical print, it’s economically feasible to experiment with niche content that you might exhibit only a few times. Translation: the cinemas can throw scores of more tests against the wall, and arrive at an equilibrium with a greater diversity of content. Many industry watchers would not have predicted that the digital broadcasting of the Met would have done so well. Let’s try other marquee fine arts (Broadway plays and musicals, ballets, etc.), live sports (Olympics, pro sports, NCAA, etc.), prime-time network TV, other films (classics, independents, etc.), even university lectures. My personal favorite: content with built-in intermissions, so patrons go to concessions during the breaks. Since these productions’ cost structures are already supported by existing revenue streams, and the marginal cost of adding cinema distribution is low, their producers’ negotiating leverage should be low. Although channel-partnering with cinemas is an obvious win for the Met, since the geographical constraints of its audience means it doesn’t have to fear cannibalization, TV execs might hesitate longer. However, it becomes a no-brainer for even them if the cinemas are willing to show their ads — which makes more sense than relying on National Cinemedia, since the TV ad market enjoys so much more liquidity. Many of these alternative content trials will fail. For instance, competing with sports bars without selling alcohol may be a tough sell. That’s fine. Only keep the winners.

A skeptic might ask: isn’t there a big opportunity cost of borrowing a screen from first-run films to test these alternatives? The Big 3’s screens gross only $44 – $57 / hour (including concessions), or about $100 / hour if you count only noon to midnight. At $7.50 ticket revenue plus $3.50 food revenue per patron, that’s an average of just 20 butts in seats during operating hours (estimating that screenings average two hours apiece). At a wild guess of 200 seats / screen, about 90% of inventory is wasted. During daytime and weekdays, wastage is obviously highest, so these periods are ripest for experimentation. In order to maximize combined profits of the content producers and exhibitors, I suspect that it’s optimal to lower ticket prices for some of this alternative content, since the concessions gross margins are so lucrative. (To do that mental exercise, pretend you are CEO of a holdco that owns both the content developers and the exhibitors, so the content rev share is a wash to your bottom line.) The trouble is, to get to that Pareto-efficient outcome, I bet that the content owners would turn the conversation to revenue-sharing the concessions, which I imagine would make the exhibitors’ heads explode. Rev sharing the concessions is unnecessary to make this work, since there’s so much admissions gross profit being left on the table.

I hope but am led to doubt that each of the Big 3 has built a detailed, quantitative model projecting the total revenue stream of each picture it evaluates for rent. Back in 2006, Malcolm Gladwell was enamored of the team at Epagogix working on this problem. More recently, on the production side, Ryan Kavanaugh has become one of Hollywood’s fastest rising moguls, in large part through his number crunching acumen. (Now even amateur B.O. modelers can put their money where their mouth is, via the “Hollywood Stock Exchange“.) The models are often set up as complex regressions whose right-hand side variables include genre, format, release date, actors, directors, studio marketing budgets, and so on. One risk with such models is that they be over-fit, due to the large number of RHS variables and wealth of historical data. Their analytical approach is typically not experimental, since they don’t have the levers to run the experiments. Averaging 5,000 screens across 400 cinemas, each Big 3 chain has the luxury of being able to run controlled experiments. For instance, suppose Regal is evaluating two prospective titles, Picture A and Picture B, each of which it projects to gross $20k per screen over its run of April 1 to May 1. It could randomly assign each of its theaters to bid on either A or B, and then look for statistically significant differences in the total revenues of Picture A and Picture B theaters. Besides direct revenue from A and B ticket sales, such an approach would capture indirect effects, such as cannibalization, sell-out spillover, and concessions. (Once most transactions are tied to a specific customer (see below), it will be possible to directly measure such effects: e.g., hypothetically, each “Transformers 3” ticket might generate 1.5x the concessions sales of a “White Ribbon” ticket.) The same experimental design could also be applied to other proposed products, such as new concessions.

So there’s a science here, but there’s also an art — just ask Tim League. His Alamo Drafthouse chain in and around Austin, TX is one of the highest revenue-per-seat cinemas in the United States. Tim has built loyal communities around his theaters, which are the social anchors of their neighborhoods. Revelers pack the house for singalongs, “quote-alongs”, film festivals and more. And they gorge on good food and alcohol. Does it help to be in a college town that’s an anchor of the independent film movement? Of course. Is Tim’s the most profitable theater, per screen, in the country? Maybe not — his costs are high, too. But I’m told that Tim is getting offers to franchise around the country. And if I were one of the Big 3, I’d sweat that.

Assigned seats. Real food. Alcohol. Ticket stub ad inventory for local restaurants’ coupons. Video game tournaments. Subscription products (“Monday Night Comedies”, etc.). Demographic-targeted titles that follow the Netflix rental maps. Ancillary revenue streams akin to how Live Nation makes its gross margin: “VIP” access and film-specific merchandise and media (not necessarily fulfilled on-site). We’ve seen small pilots of some of these. AMC has even promised its lenders some innovations. Which of these products can be meaningfully accretive to margins at scale? We’ll never know, at least not until one of the Big 3 conducts a good ol’ fashioned experiment.

Notes:

5 I say “oligopoly” in the game theoretical, as opposed to legal, sense.

END OF PART Two  Tomorrow:  Channels

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

Posted on by Alexandra

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.

Continue Reading The Article Use the Following URL: http://www.thefilmcollaborative.org/blog/?p=76

Jon Reiss on Huffington Post A Christmas (and Hanukah) List to Help Save Independent Film

Here is my piece for the Huffington Post that ran on December 17, 2009 Click Here for the Original List with Links

A Christmas (and Hanukah) List to Help Save Independent Film

By Jon Reiss

Much has been written about the current crises in independent film. Studios run by corporations increasingly view their specialty divisions as a hobby, and have been eliminating them one by one. DVD sales are down. The internet is struggling to monetize.

However, it is an exciting time because it is more possible than ever now for audiences to connect directly with independent filmmakers and help support them with the films that they have made, and are making. This list is to introduce 10 gifts that you can give for Christmas (and the last two days of Hanukah) to help support independent film.

1. Buy a DVD directly from a filmmaker’s website. I know it is easier, and cheaper to buy a film from Amazon. But a filmmaker will get more than twice the amount of money from a direct sale, at least 80% of the sale as opposed to approximately as low as 30% of the sale if on Amazon. In addition the filmmaker will get your email address so they can tell you about future projects – the first step in creating a closer bond between filmmaker and audience (you can always opt out). Finally – you can buy additional gifts from savvy filmmakers as well as exclusive packages. Check out the film Ink who are a great example of this. For a catalogue of filmmaker websites go to Neoflix

2. Buy a DVD that is not widely available yet. Many filmmakers have begun to sell their DVDs while on the festival circuit. They are not waiting for a distributor, who may not come. These DVDs are usually only available from a filmmaker’s website or at screenings. Children of Invention will even explain why they are selling their film on the festival circuit.

3. Support a film that is still in production. Many films are now “crowdfunding” e.g. using the Internet to raise money via donations. The filmmakers will give you gifts (from advance copies of the DVD to a producer credit to an actual role in the film!) Check out Indiegogo’s site and Xmas list to see what is available. I feel that crowdfunding is one of the most incredible ways to connect directly with filmmakers and create a lasting relationship with them. Check out Can Bush Be Prosecuted I love the personal appeal for the comedy Love and Taxes.

4. Go See Movies Part 1: Alternative Venues
Of course seeing films supports independent film. But how do you gift it? An AMC card doesn’t help independent film. There is a new wave of alternative screening venues sweeping the country in its infant stages. They need your support. Buy some tickets for a friend at one of these venues and in your card tell them why you did it (heck print out this post and include it to save you time). Brave New Theaters is a guide to films (usually social action oriented) and alternative venues (some are people’s living rooms, many are not). Range Life is a group of 4 films touring the country. You can donate to the Rooftop Films project which needs support for their 2010 summer season.

5. Go See Movies Part 2: Traditional Art Houses
Most cities will have some kind of art house nearly all will have a Film Club or Support link. Go to the Art House Project for a list. You need to scroll down to the “Community Based, Mission Driven Art House Theaters.” Click on a theater in your city, click on the Film Club, or Support link, or Ticket Package link, purchase, print the receipt, put in envelope.

6. Go See Movies Part 3: Give a Hosting Package This is for the true film lover or activist. Many films such as Robert Bahar’s Made in LA will sell you screening packages for as low as $100. In this way you (or your friend who you are gifting) invites friends over to their house/home theater to view the film (preserving the social nature of film) and you can sell the extra DVDs to your guests or give them away. (The gift that keeps on giving.) If you or your friend really like this experience – you can list yourselves on Brave New Theaters and become your own screening venue for independent film.

7. Go See Movies Part 4: Support Indie Films on Video On Demand An emerging distribution outlet for many indies is day and date VOD, in which the film is available in a few theaters across the US and simultaneously available on VOD. Unfortunately many VOD menus favor studio films and make it difficult to find independents. However if you look, you can find them, check out IFC, Film Buff and other new independently oriented VOD channels. When you find a new film, invite your friends over and watch it together one night this holiday season. By initiating yourself and your friends into the VOD experience, hopefully you will continue to use it as a way to watch independent movies which will in turn support them.

8. Buy A Digital Download or DVD from a Site that Supports Independent Film At Indieflix you can not only buy DVDs from a huge catalogue, but you can stream them as well. iTunes has been great for independent film, providing access to broad markets, etc. But whereas your iTunes card might be used to download Transformers, if you gift Indieflix not only are you solely supporting independent films, but the filmmakers get a much larger share of the pie, 70%. B-Side is another new innovative company that focuses on community screenings and DVDs. For LGBT content go to Wolfevideo.

9. Buy a Roku Box While not directly supporting independent film (you are buying a product from a corporation to view products distributed by corporations), a Roku box will enable you to watch your Amazon VOD and Netflix choices on your television. Amazon is still the largest catalogue of media and lists many independent films. By giving a Roku box you make it easier for them, hence helping independent filmmakers.

10. Give Your Filmmaker Friends A Book If you know an independent filmmaker, (or if you know someone who is interested in the changing film distribution landscape) and they don’t know how to engage their audience or sell their films, give them one of two books (or both) that will tell them how. Scott Kirsner’s Fans Friends and Followers or my book Think Outside the Box Office which comes with bonus gifts from free tickets to screening venues to free chapter updates when you buy it from my website (currently the only place it is available).

11. Buy Other Merchandise from Filmmakers Perhaps you’ve already seen a film, or don’t want to collect a bunch of DVDs. You can still buy products that support independent filmmakers. For Bomb It we created a variety of t-shirts, posters, stickers, hats, hoodies. Check out the RoosterTeeth store as well. Would love to hear what other filmmakers are doing as well.

12. Pay for a Pirated Film The next wave of monetization for filmmakers is to monetize piracy. Ink had 5,000,000 views but it didn’t translate into paying back their film much. James King created VODO to address this issue in a systematic way. If you can’t beat them join em. Give a gift to Vodo to support their efforts. Or tip a film, print the receipt and give it to a friend – with the suggestion that they watch the film on torrent. I hope that this starts to shift the mindset that all content should be free. For if no one pays for content, how will we as creators have the resources to continue creating?

The Value: While one of these gifts will not buy a goat for a poor farmer in Chile (those kinds of gifts are great too), they will help preserve the independence of vision and independent voices that shine a light not only on important issues of the day, but entertain us in new and innovative ways. If independent film dies, so will these independent voices in our media landscape (god forbid we are left with FOX). In addition, by giving the gift of independent film you show others how they can support filmmakers as well.

Let me know what you think by commenting here or on Twitter.

Remember the neighborhood video store?

Posted on by Mark

Every technological change in film distribution calls for an evolutionary step in how we get films to audiences.  Broadcast television, VCR, Cable, DVD, VoD, DVR, and now internet streaming: what do these changes point to in relationship to our audience?  Simple: audiences want the power to choose how, when, and where they engage content.
From The Buffalo News:

Home movie future fuzzy
By Stephen T. Watson
Updated: October 28, 2009

On a recent episode of HBO’s “Real Time With Bill Maher,” the host offered a “New Rule” for home entertainment.

“Blockbuster cannot announce it’s closing 960 stores. Where will I go to rent a movie in 1988? And how do they still have 960 stores?” Maher quipped, to laughter from the audience.

It’s been a hard fall for Blockbuster — from world-beater to butt of late-night jokes — but this is a sign of the state of flux that the home-entertainment industry finds itself in today.

Competition from Netflix, the online rental powerhouse, and Redbox DVD-rental kiosks — not to mention the channels available on digital cable — has walloped Blockbuster.

“Blockbuster is like the Spanish Armada. It’s out there, and the wind isn’t blowing, and everybody is taking shots at them,” Continue reading →

Disney unlocks a new form of digital distribution with its “Keychest” technology

Posted on by Mark

Allowing you to buy the rights to a movie and watch it on any rights-controlled device (computer, VoD, cellphone), this upcoming piece of technology opens new doors to Digital Indie Distribution.  Keep a step ahead!

From YahooTech:

Disney’s “Keychest”: Your DVD library in the cloud?
Thu Oct 22, 2009 10:06AM EDT
Cloud computing may have gotten a bad rap in recent weeks thanks to the recent Sidekick fiasco, but Disney’s reportedly forging ahead with its plans for “Keychest,” a digital video locker in the sky that would let you watch your purchased movies and TV shows from your PC, mobile phone, or via on-demand cable.
The Wall Street Journal (registration required) has all the details, but here’s the gist: As its name implies, Disney’s “Keychest” service would let you buy a “key” to a piece of digital video content—say, a movie, or a TV episode. You’d then be able to log into your Keychest account on “participating” devices and services (such as an iPhone, PC, or cable provider) and your videos would be waiting for you.

We’re not just talking online video, either; according to the Journal, purchased DVDs and Blu-rays Continue reading →

How will the studios adapt to changing distribution markets?

Posted on by Mark

At ScreenDaily.com, Mike Goodridge suggests it’s decision time for studios’ distribution strategies.  How will they adapt to new digital markets?  Will they embrace transmedia?  Food for thought:

Mike Goodridge

Would you pay $250 to have Transformers: Revenge Of The Fallen delivered to your living room on the same day it is released in theatres?
D-Day for US studio model

8 October, 2009 | By Mike Goodridge

That is a new technology scenario being touted to the major studios as they struggle to cope with the fast-collapsing distribution windows that have been the bedrock of their business models for decades.

Then there’s a premium VoD option that could come in just four weeks after theatrical release in the $30-$50 price bracket.

“US films still dominate, but within a very short period, studios won’t be able to monetise their expensive product the way they are used to”

Exhibitors may not be thrilled to hear of these developments but with the contraction of the DVD market and the dramatic erosion of income from pay-TV deals, the studios are desperately trying to carve out new windows and revenue streams.

Ultimately, new windows might just be a stopgap before the studios’ movies are released day and date in all media and all markets. That sounds like an option with terrifying consequences if the film doesn’t work – ie, it is immediately dead in the water with no chance of compensation from ancillary platforms – yet some would argue that we are already at that place. If a film disappoints in its opening day in the US, the global industry has decreed whether it is a flop by weekend’s end. Continue reading →