Market Devices between audiences, distributors and exhibitors

It is the time of the film industry calendar (LFF, P2P, MipCom) that attention turns to independent film business issues and addresses recent innovations and initiatives concerned with the challenges generated by digital disruption. The most interesting deal with the distribution/exhibition elements of the value chain, but one press item on crowd-funding struck seemed to uncover more contributing evidence for the importance of early stage marketing and audience engagement without commenting on it. David Fincher’s use of kickstarter was reported in optimistic terms in relation to the lending of legitimacy to the service. However, it raises the question of whether independent filmmakers now require a  development marketing budget? New entrants with established fanbases and publicity interest, as with any market, make it far more difficult for the lower level participants to gain traction. This would seem to highlight the increasing importance of an audience engagement strategy.

Harvey Weinstein’s LFF keynote comments on piracy have been reduced to an approval of France’s HADOPI law and spoiling for a post-election fight to achieve the same regulation with SOPA and PIPA.It is questionable whether HADOPI is actually effective and there are myriad connected arguments regarding internet freedom not just connected to content piracy that the speech did not address, however its common sense to agree that the public should not steal content and those people involved in content creation and distribution should get a fair return for their efforts. Whilst there have been some high profile crack downs on piracy e.g. megaupload its pretty safe to say piracy is a problem that will remain no matter how draconian the legislation established to tackle it. A legal solution is unlikely to solve a technological and increasingly social problem. It is argued however, that if content is made available legally, easily, at a reasonable price in the way consumers want to access it, people will chose not to pirate. The major media players are refusing to follow this line of reasoning and adapt, majors are protecting their traditional film exploitation windows in a head-in-the-sand strategy, of course the longer they continue, the longer people will pirate films and the more entrenched that behaviour becomes.

The independent film business in the US is reported as having some success by adopting non-traditional windowing models. Bachelorrette is used as the poster child, reported to have grossed $5.5 million from video-on-demand and $418,000 earned in theaters. The Ultra VOD model of digital release (iTunes and Cable VOD) etc, then cinema release  4 weeks later, is in the industry  potentially  “proof for a model we all want to work… and the pre-theatrical VOD window may start to catch on as “marketing that pays”as analysed by CRI at NYU.The benefits of extremely low P&A relative tio theatrical and low fixed costs make the model viable for indie films. But there are nuances to draw out. A traditional wide release P&A is avoided but some theatrical release costs are necessary in order to get on the “recently in cinemas, now in cinemas” section of iTunes etc. It is day-and-date releases that are increasing the most  (for Hollywood films)doubling from 2009 to 2011 and projected to jump about 30% this year. Attitudes amongst filmmakers may be changing in the states to be happy with day-and-date, but at some level of performance the distributor is surely apt to pull the plug and not go theatrical if a sufficient sum is not generated in the initial release? It would be, as always, very interesting to gain more insight into those decision making processes and the contractual ramifications. If the risk of straight to VOD stigma is not avoided legally in deal terms, is the advantage of a distribution deal with traditional rights exploiters far greater than the opportunities afforded by new digital technologies?

Recent innovations have included Tugg or Gathr: social, cinema-on-demand facilitators in the mould of moviemobz and somewhat similar to currently in Beta test, these initiatives rely on social engagement and have been embedded in market devices by social networks themselves for example Paranormal Activity 4’s Want it button on Facebook for theatrical demand. These models can circumvent the exhibitors’ curatorial and decision making process, however some support is available from within the exhibition sector via the AMCi independent programming commitment too. Territory specific limitations in the UK have delayed development in this VOD/theatrical area. Firstly there is far less cable on demand uptake. Secondly as Screen note “even a smaller indie film isn’t likely to get a run at any of the cinema chains if the film is released without the traditional window” – “exhibitors need to have a more open mind is with independent and local films.” The fear of cannibalisation is not one that vexes Curzon “Curzon Artificial Eye CEO Philip Knatchbull does not think a VoD launch will cannibalise the cinema numbers, and if anything will boost cinema-going” (Screen Daily) and is being researched by the Glasgow Film Theatre and Edinburgh Filmhouse.

Pricing remains an issue. The ultra VOD release in the US is around $10, which is before its available in the cinemas. In the UK, a day and date release can be £10, so potentially more expensive than a cinema ticket when the film is also in cinemas e.g. Holy Motors.  The inherent shareable nature of this film window e.g. on Facebook with the newly launched Screenburn app is a characteristic believed to replicate and improve upon word-of-mouth (WOM) through its inbuilt point of sale. Current research by Wiertz and Hennig-Thurau indicates Twitter WOM can facilitate consumer recommendations at  such a pace to nullify traditional marketing campaigns.

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