vod

In 2008 Mark Gill, former president of Miramax and Warner Independent, gave a speech at L.A‘s Film Festival listing quite a few reasons why independent film was in serious trouble. From closing of Miramax and Warner Independent to the fact that only five films out of 5000 submitted to Sundance get US theatrical release. In short- the picture wasn’t very nice.

Fortunately, every coin has another side. DVDs stepped back to give way to the new king – online streaming. According to Nielsen, a leading global information and measurement company, over the last year 37% more people are watching video on the Internet and 25% more people are watching video on mobile devices. In fact, the amount of time spent streaming videos online is now greater than time spent watching DVD and Blu-ray discs.

To make matters even worse – in September 2010, Blockbuster filed for Chapter 11 bankruptcy. Which meant that DVD is following the steps of its predecessor – VHS. At least it felt like that back in the day.

As audiences shift to new channels like Netflix and Amazon, producers and studios don‘t want to be left behind.

More and more films are being released using a new strategy – simultaneous video-on-demand (VOD) and theatrical release.Even though DVD sales are still the most valuable after theatrical, the VOD has proven to do a greater job at encouraging further sales. Besides, it is a tempting model as the cost is minimal and it does not require the amount of marketing related to theatrical release.

So, how about independent film then? Here‘s a list of a few interesting and useful opportunities that VOD can offer indie filmmakers as well.

1.       Distribution

Releasing a film in a theatre has that sense of immediate success and glamour. However, trying to squeeze past such big budget giants like “Iron Man” to get a screening seems a bit difficult idea to grasp. Nevertheless, VOD provides access to online marketplaces like iTunes or Netflix where your movie can be listed together with those Hollywood spectacles.

You could easily do it without the middle-men which would grant you greater control and revenue, but it is advisable to trust VOD aggregators at least at the beginning. They will negotiate best deals for your film and make sure that it reaches as many platforms as possible. Besides, if you manage to gain substantial attention on VOD platforms, there’s a greater chance to get a traditional distribution deal.

However, as VOD is rapidly growing, it has already developed a certain window system that you should follow if you want to maximise your profits.

Some VOD platforms have New Releases and Catalogue Releases. If you want to get visibility on such established players like iTunes you need to assure them that they are the first ones to release your film. Otherwise they will list you in the Catalogue section where you have significantly reduced chances of audience attraction.

Furthermore, you need to think whether it’s beneficial for you to release the film using “day and date” strategy. That is – exploiting multiple rights on the same day. The most common approach is VOD and DVD release. But be wary of VOD platforms and their policy regarding that. As I mentioned before, you don’t want to end up in some forgotten catalogue.

If you’re really lucky you could get a VOD and a theatrical release. That is the ideal course of action. But, of course, you would have to go through the traditional lengths to get to the theatres.

2.       Opportunities to experiment

Most exhibition chains won’t risk putting on movies without certain marketable content. But with VOD you can set your creativity free as there are virtually no gate keepers. In fact, by choosing to release your film using VOD you might as well end up being the one saying: “Unfortunately we have to pass at this time.”

3.       Revenue

When you choose to get your film uploaded to the VOD servers, you need to negotiate a deal. Especially – regarding the license fee and royalties. Most of the companies will send you monthly checks with royalties from what people have paid to watch your movie.

The split between VOD companies and filmmakers is a lot more favourable than the one distributors receive from exhibitors. Theatre owners usually divide profits 50/50 or 60/40, but VOD platforms typically allow distributors and their partners to get about 70 percent of a film’s profits.

If you decide to work with aggregators to negotiate the deals for you, you will have to split that percentage as agreed in your contract. Usually, it‘s 50/50, but some aggregators have specific deals with VOD channels that offer them a set fee in advance, so you might end up with whole profit just for you.

However, keep in mind that even though it‘s a revenue stream you can count on, it‘s still not substantial enough to recoup your investment for your movie. The most important thing is to be patient. The profits add up over time. Besides, VOD companies license content on a nonexclusive basis, so you can plug your film to as many channels as you like and reap profits from all of them.

Finally, all the transmission costs would be carried by the operator, which would be incorporated in your contract. And under present arrangements, it would cost you a lot less than DVD manufacturing, warehousing, distribution and disposing of returns.

4.       Audience

The Internet in general provides an opportunity to reach even the tiniest niche audiences around the globe. If you do a little research about your specific target audience it will be easier for the aggregator or even yourself to put your movie on the right “shelf”. Consider the VOD platform as a digital store.

The way you present your film using the guide user interface (GUI) or the “menu”, will have a huge impact on your bottom line and overall success of the movie. By the way, VOD will let you share the shelf space with Hollywood blockbusters and in marketplaces like iTunes and Netflix you’ll get access to millions of people that you wouldn’t even consider as your type of audience.

You have no idea how many people watch something simply because they have nothing else to do and then get hooked on something completely unexpected.

5.       Speed

VOD services allow you to reach your audience faster than DVD distribution or theatrical release. With independent film it would often take years to be first of all noticed in the festival circuit, acquired by a distributor, positioned and screened at the cinemas. Nowadays, it takes less than a month to arrange your VOD release and people can watch the movie seconds after purchasing it (depends on how fast is your Internet connection).

6.       Marketing

With VOD, the money- hoovering marketing headache is alleviated.  Streaming channels constantly run trailers for the films they carry, eliminating the expenses for television advertisements. It also enables companies to trim their print campaigns, and focus on more cost-effective social media strategies.

Since VOD is an online service, you can spread the word even faster as people can just add links to your movie, “like” it, “pin” it, tweet about it and so on. But you can’t just rely on the train to keep riding on its own. The films that do well on VOD are usually the ones that have a certain following. However, it is important to know how to juggle your social media.

It’s best to start your campaign at the very beginning – the pre-production. Work on it and be creative – keep the people engaged until you secure their loyalty. They will be your soldiers who will buy, stream and spread your movie all over the world, without you having to spend a dime for it. Just be careful – the most devoted followers can easily become the greatest curse if you disappoint them. Bad news scatters faster than the good ones.

7.       It’s growing!

According to 2013 BFI Statistical Yearbook, the total VOD market for film in the UK was estimated to be worth £243 million in 2012, a 50% increase on the previous year.

Digital Entertainment Group, which monitors home entertainment spending in the US, stated that revenue from digital delivery of films and television in the United States was more than $3 billion for the first half of 2013, up 24% from about $2.5 billion in the same period of last year.

Moreover, the Motion Picture Association of America identified 95 services providing digital access to films and television shows in the US as opposed to fewer than 20 in 2006. These numbers show a certain trend that is predicted to continue as more and more consumers find it increasingly inconvenient to leave their home for entertainment.

Besides, supporters of the platform, like Tim Roth and Kevin Spacey, are changing the perception of films released on VOD and making people believe that film‘s quality and value is not/should not be measured by the way it was distributed.