Online Distribution: Disintermediation or rebranding the gatekeepers? A variety of options along the spectrum.

The ongoing proliferation of digital film distribution channels brings up interesting questions of categorisation.

Miramax, along with Universal, Warners and BBC worldwide amongst others are experimenting with the facebook credit system. This new channel allows the distributors to capitalise on Facebook’s access to audiences (it is the 3rd largest video site by unique users comscore/adage). However the development does not represent a step towards the consumer in terms of revenue flow. Facebook is believed to take a standard 30% in a position like iTunes, who manage the payment relationship. The anticipation by studios is that being where consumers already hang out online and providing the film there, rather than marketing the film there and driving them to another website will be a significant improvement. It will also provide a lot of consumer data.

A strategic pursuit of disintermediation is often part of an independent’s idealised business model. The non-exclusivity of most 0nline VOD rights means that some companies are able to develop their business model to include digital self-distribution as well as with traditional partners. For example zentropa on demand. The home of Lars von Trier benefits from a certain brand value.

Sundance and TriBeCa film festivals have both sought to diversify their business models by moving into distribution – leveraging their brand value as curators. Both operate through existing digital vendors (cable, iTunes, Netflix) excepting when online festivals occur, when some films are offered directly.

Filmmaker Ed Burns is a good example of both using a (personal) brand to distribute films directly via a personal digital presence and the use digital incumbents on a non-exclusive basis. Kevin Smith was able to use an innovative distribution strategy to release Red State, essentially 4-walling and doing service deals on the back of free-marketing due to his personal brand. Yet still for digital on demand and download access to the film is via intermediaries.

Each of these models: Studio; Independent; Festival; Individual filmmaker is different. Care should be taken when speaking of digital distribution strategies in these contexts. The implications of digital distribution for a label, a window, an individual film are significant and varied. They are also mutable, for example Netflix previously licensed content from Starz a cable company, who in turn licensed it from the studios. Given the fear of cord-cutting, the OTT solution (Netflix) is seen as a direct competitor to the cable provider (Starz) and now has to buy the same rights for much higher price from cable co’s who want to pass on digital rights, or attempt to buy rights directly, but these rights have traditionally been bundled – including cable TV, which Netflix is not in a position to exploit and can’t afford.

Assessment of different distribution models for different parties will be forthcoming on these pages. The potential  take up by businesses like those mentioned above, of service tools such as that employed by Dogwoof on their streaming site is very interesting. The affiliation tool, which means – whoever shared the player (which is the trailer/marketing tool as well) gets a % of the sale.

It this function was employed across the web, with each branded portal taking an affiliate cut – Facebook 30%; if a film is selected by Tribeca and made available on their site then 30% to them, if a sale is made via the star lead actor’s twitter feed then 30% to him/her, then progress would certainly be made towards an anywhere anytime least friction offer to consumer. The de facto distributor – whichever company/filmmaker has the account with the technology provider would also be able to see which windows are working best to sell the film and adjust their deal terms accordingly.

The news of a digital distribution specialist division by The Weinstein Company gives a further angle to address as the company is proposed to produce itself, as well as acquire and distribute. This allows long lead engagement on projects that rewards talent engagement. If the same company (or companies with aligned motivations using the same tools) is/are able to track and manage information from script to screen they may increase available marketing resources and intuitively – see Vin Diesel’s engagement with over 27m fans on Facebook.

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