I’ve had my eye on New York startup VHX (“sell video directly to your audience”) for a while now, and so have such internet-savvy people as Aziz Ansari, Kevin Spacey and Alamo Drafthouse. Founded in 2010 by early Boxee and Vimeo engineer Casey Pugh and developer Jamie Wilkinson, who worked together on “Star Wars Uncut,” a fan-sourced shot-for-shot remake of “Star Wars Episode IV: A New Hope,” VHX placed on Indiewire’s first Influencers list.
When they won an Emmy, Pugh and Wilkinson launched VHX, without knowing exactly what it would be. They self-funded at first (investors came later), tinkering with aggregating shared video and creating the “Know Your Meme” encyclopedia. They eventually figured out that Louis CK and Joss Whedon were onto new models for direct-to-fan distribution, and when Ansari turned to them for help, they realized that they had built the technology for an online distribution platform.
Eight months ago Wilkinson moved from San Francisco to join Pugh and the product team in New York, where they’re making VHX sharper and better all the time, as exploding demand in the last six months has expanded their staff from six to twenty.
And they’re going transparent, too. In response to constant questions about their numbers, they’re making VHX STATS public here. It updates daily with numbers of titles for sale (over 1000), total transactions, customers who’ve bought more than one title from VHX, sales by geographic region and VHX total gross revenue: north of $3 million. “We’re trying to show off that this is a healthy growing part of the market,” says Pugh. “We’re going to make a page where all our platform wide metrics rate all on one place.”
Wilkinson only wishes they “could show individual sales stats.” Later.
He and Pugh believe that every movie and tv show and creative person on the internet can and should have a website. Until now most websites were used as marketing destinations driving people to click into black boxes like iTunes –where you have to wait a month to get your sales results. “What gets me excited in the morning,” says Wilkinson, “is helping out people who couldn’t fit into those formats. It’s not just indie film and TV, it’s also weird YouTube series and martial arts instructors who still sell DVDs today, when no digital service provides them with a way to sell a digital copy.”
Among the major movie studios, only Warner Instant sells their film archives direct to consumers. VHX is enjoying treating enlightened indie companies like Tim League’s Alamo Drafthouse as both brand and destination, building individual websites for each of the 15 films they distribute, such as Oscar-nominated documentary “Act of Killing,” but also creating a small boutique store. “They know what they’re doing,” says Wilkinson. “We have built an open web platform that allows anyone to turn a website into an online store for film and tv and videos. You can set up any number of websites, turning a website into a storefront, with everything interlinked in back.”
Spacey self-distributed “Now: Behind the Scenes on the World Stage” via VHX, theatrical distributor Abramorama, and marketer Marc Schiller‘s Bond Strategy and Influence. “That is the power of self-distribution,” says Wilkinson. “You can do what you want. Spacey is a total believer. He likes doing what he wants in the format he wants. We’re just a technology platform, we provide a service and consultation.”
The model going forward looks more like YouTube, or how a band or video game publisher operates, and less like the broken let’s-reinvent-the-wheel each month studio paradigm based on ‘let’s make art and find an audience.’ “This is more like let’s bring the audience into the process of making the art,” says Wilkinson.
Needless to say, VHX can take up where Kickstarter leaves off, which is not lost on the likes of Spike Lee and Kevin Smith, who have already built sizable fan bases with whom they interact. VHX is in conversations with many people, from small distributors to larger media companies, all interested in building and keeping their audiences. What’s alienating about the movie business, says Wilkinson, is that “each film is reinventing its audience, you’re starting from scratch. The YouTube era is about making series that are infinite episodes long.”
Pugh takes pride in “making a product that is easy to use and works on its own.” On the easy-access VHX platform, you sign up, upload your video, set a price, pick from various themes which you can customize and then you publish from your own domain name, say, kevinspacey.com, from your site powered by VHX on the back end.
More features are coming, to make it easier for a filmmaker to open their own version of a Netflix store, complete with community components, editorial control and commenting. Wilkinson doesn’t understand why Netflix opted out of the do-it-yourself model, instead demanding that filmmakers create a costly MP4 which is mailed on a hard drive. Louis CK’s site sells videos from other comedians, acting as curator, driving traffic to affiliates. “Why doesn’t each film festival have its own Netflix?” asks Wilkinson, “for those who can’t make it there in person? People don’t want to wait.” VHX helped to live stream Roger Ebert’s “Life Itself” at Sundance for Indiegogo backers.
An updates tool launched a few weeks ago enables filmmakers to use the platform well before they are done with a project: they can blog on site, similar to Kickstarter updates, send members-only newsletters. You can charge for access to updates, using updates to release behind-the-scenes photos and videos. And you can always join and get these extras by preordering the movie.
VHX isn’t just selling video content, but merchandize and bonus material. It acts as a hub where you can buy the DVD or get a digital copy. Anzari supplied a diary with all the food he’d eaten on tour. “You can be creative with it, package and sell,” says Wilkinson. “Offer a $50 megadollar deluxe edition with 13 hours of extra footage that wouldn’t fit on a Blu-ray. That’s trivial with the internet.”
I’d love to see established filmmakers such as Wes Anderson, Werner Herzog, Martin Scorsese, and Wim Wenders collecting all their films in one place, even if they don’t own all the rights–VHX can click through to multiple partners and regions of sales attached to one VHX site where a fan community shares gossip around their next projects, and the filmmakers can distribute free content, giving updates. “This is like running a studio and production house, more like record label,” says Wilkinson. “A straight line needs to happen between consumer behavior and what it should be in 5 years. It’s always global, one internet, we can reach the entire world from a website.”
If they build it they will come.