Celebrating 17 Years of Film.Biz.Fans.
by Paula Bernstein
November 11, 2013 10:27 AM
20 Comments
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Is VOD the Future of Independent Film? Yes -- and No.

Whatever Sarandos may want, it's clear that viewing habits are changing. The younger generation wants the convenience and flexibility of watching films whenever and wherever they want-- whether it's on their mobile device, tablet or streaming directly to their TV.

"Concussion"

VOD provides a potential audience of 100 million in North America alone, estimates Nolan Gallagher, CEO and founder of Gravitas Ventures.

"Not every great movie is going to necessarily get to Cleveland," said Gallagher, and "there are quite a few consumers who like to be the first ones to see movies fresh off their festival debut.

"Concussion," the Sundance hit from first-time feature director Stacey Passon, is only playing at select theaters, but it's available on iTunes and other VOD platforms.

"Some movies will find an audience on demand and some movies will find an audience in theaters."

The list of high-profile indies to be released day and date in the past few months alone is long and includes "Escape From Tomorrow," "Lovelace," "The Canyons," "A Teacher," "Adore," Drinking Buddies," "Don't Stop Believin'," "Touchy Feely," "Ain't Them Bodies Saints," "Blue Caprice," "Muscle Shoals," "Good Ol' Freda" and many other films that made the festival circuit.

Then there are films like James Franco's "As I Lay Dying," a prestige pic that (aside from a single Manhattan screening) bypassed its theatrical release and went straight to VOD, iTunes and DVD. With a recognizable title, Cannes credentials, built-in publicity and Franco's star power, the film should fare decently on digital platforms, whereas it would have been a tough title theatrically.

Radius-TWC distributed the low-budget, R-rated comedy and Sundance hit "The Bachelorette" via the "ultra" model a month before its theatrical release in September as a way to market the film and create buzz. The film, which starred Isla Fisher and Kristen Dunst, immediately climbed atop the iTunes "top movies" chart.

Recently, Magnet Releasing, a division of Magnolia Pictures, did the same for "The Last Days on Mars," the sci-fi thriller starring Liev Schrieber. The movie was available on VOD five weeks before its theatrical release in December and hit the top 10 in the list of iTunes Indies. Magnolia Pictures used the same strategy recently with "Mr. Nobody."

The specialty industry is clearly torn when it comes to the VOD future. Fear of cannibalization is strong, not only in terms of theatrical attendance but because VOD releases currently don't generate the same kind of PR and marketing push. The advent of digital projection hasn't made theatrical releasing any less expensive and it's harder to make back the money in ancillary rights.

Since the introduction of television, people have been declaring the death of cinema, but so far, nobody has been able to replicate the immersive, communal theater going experience at home.

"Whether you see day and date as half empty or half full -- as cannibalization or cross-promotion -- It's going to take a lot more than protectionism against ancillary overlap to keep folks going to the movies," said Richard Lorber, chairman and CEO of Kino Lorber.

"Not every great movie is going to necessarily get to Cleveland."

The fact is that despite fears that day-and-date will kill movie going, there's no data to prove that day-and-date is eating into theater grosses (although theater owners say they can see the evidence in box office receipts over the past eight years or so).

"There are separate audiences for theatrical and VOD and the cross over is slim as the experience of seeing a movie in theaters is so different than watching at home," said Matt Grady, founder of specialty distributor Factory 25. "There are people who go to movies and others who watch films on VOD and hopefully both audiences can grow with press generated from each."

There's also a sense that, to some degree, since viewing habits are changing, you have to give the people what they want. 

"I think VOD represents part of the future for indie film," said Oscilloscope Laboratories' David Laub. "Is it the entire future? I don't feel we have enough data yet to know that."

There is, however, enough data to know that more audiences are watching on VOD. 

Set-top boxes with on-demand viewing capabilities are now in about 60% of U.S. households, up from 37% in 2008, according to a recent report from Nielsen. Overall, about 102.7 million homes had pay-TV service from a cable, satellite or telephone company in the second quarter of 2013, according to Nielsen's Viewing on Demand report. 

The report also found that younger viewers are more likely to use VOD; about 31% of those ages 18-34 told Nielsen they used it, compared with 23% of those 35 and older.

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20 Comments

  • Michael | March 20, 2014 9:20 PMReply

    Roseanne Liang released a film in 2005 entitled "Banana in a Nutshell". Even after seven years of getting limited recognition for her documentary, Roseanne was still able to make two more films after her debut. The determination turned her to Kinonation, a start-up that specializes in cloud VOD distribution, in Santa Monica that allowed her to distribute "Banana in a Nutshell" to Hulu, Amazon, and SnagFilms. After years of minimal recognition, Roseanne was able to accumulate tens of thousands of views without any marketing or advertising firms to back her up. Her film currently holds a 7.4 rating on IMDb. Roseanne was able to make a feature film based on her documentary called “My Wedding and Other Secrets”. Roseanne used Kinonation as a stepping stone to boost her creative confidence, and was able to reach an audience that she never thought would set eyes on her film.
    Amazon review: “What an awesome and refreshing movie. Strikingly honest and beautifully done. I'm glad I got to see the epilogue to see how things turned out "happily ever after." They make such a wonderful couple and deserve all the happiness in the world! Please make more wonderful movies, Roseanne!”

  • Marv | December 2, 2013 5:36 AMReply

    Hate to sound commercial but I think it would be interesting if netflix redbox etc teamed up with small theaters or bought them out and with a subscription you could also go to the theater. Maybe even collectively vote tugg style on what gets played

  • Barry Norman | November 13, 2013 7:30 AMReply

    As an independent theater owner who is seeing many fellow indie theater owners closed due to the cost of digital conversion, having day & date VOD and theatrical release coincide will be the final nail in our coffin. If younger viewers don't go to the small, local theaters as our older customers become less able to do so, we won't survive.

  • Schmüdde | November 12, 2013 8:32 PMReply

    National Association of Theatre Owners president John Fithian addressed Sarandos directly:

    "If Hollywood did what Sarandos suggests, there wouldn’t be many movies left for Netflix’s customers or for anyone else. It makes absolutely no business sense to accelerate the release of the lowest value in the chain."

    Translated: “It makes absolutely no business sense to give the consumer the option to choose how they want to consume their media. It’s better if we create artificial constraints.”

    Mainstream record labels didn’t do well in their war against the consumer, and I doubt that mainstream exhibitors will either. Some independent films have released on multiple platforms on the same day. If this becomes a widely-adopted practice, we could see a real shift in what the consumer expects.

    ~ü
    (More on this topic at http://beyondthefra.me)

  • JohnL | November 12, 2013 3:56 PMReply

    I'm a semi-professional film critic/cinephile and I vote yearly in some year end award bodies. I live about 45 minutes from my local arthouse and a little less than an hour from my other arthouse. VOD allows me the opportunity to see many of the independent and foreign films that I normally would have to drive to see. (It is very costly to drive to see each important film). For example this year I've been able to see Beyond the Hills, The Angel's Share, Bastards, and many other major IFC releases on VOD. Other indie distributors have not been as kind, such as Strand, and this weekend I will make the hour trek to go see A Touch of Sin. While I'm willing to go the distance to see some indie and foreign films, most people will not. When distributors like Strand, Kino, Magnolia, and the such don't give wider releases to their movies I think it is better for them to release then on Demand. Maybe they don't have to do so on the first few weeks of release, but maybe a month later.

    Video on Demand should allow us to have more movies picked up to. It seems a lot easier for a company to pick up a movie like Jimmy P. (IFC) now than in the past. A few years ago, I think I counted 7 Cannes Competition entries withou US distribution. Last year we only had 1 and this year 2 have not been picked up yet. I believe VOD has led to more movies being picked up, such as Jimmy P, which didn't have stellar reviews out of Cannes but will have viewership which may still watch it. It doesn't seem to be as big as a financial liability for the indies.

  • Amanda Aldridge | November 12, 2013 10:29 AMReply

    Going to theatre will always be my preference because I feel the power but if a film does not make it & goes directly to DVD - if it has gotten decent reviews from viewers then YES - I will want to have it VOD.

  • Daniel Delago | November 12, 2013 5:58 AMReply

    Like the article says, theater owners are not worried about VOD for indie films. They are concerned about it eating away at their revenues for blockbuster releases. VOD is a good thing for independent film. Many good quality indies never get into movie theaters. 'Blue is the Warmest Color' comes to mind and a new indie called, 'The Motel Life' starring Emile Hirsch, Stephen Dorff and Dakota Fanning went straight to iTunes and VOD for example.

  • Russ Collins | November 11, 2013 10:08 PMReply

    VOD vs. Theatrical is a headline grabbing topic. However, it seems to me that we are obsessing over a topic that the market, in my opinion, has essentially decided. VOD already exists and can be implemented in many ways -- from merely posting a film on YouTube or Vimeo, or cleverly crafting a well-managed and carefully executed day and date theatrical and VOD release, or finally, executing a "traditional" platform release that begins with festival screenings, progresses to a theatrical release and ends with a video release in many different formats. There are hundreds of variations on these three basic release formats. For filmmakers and distributors deciding on what to do it is a complicated calculus. For theaters it is another dynamic to adapt to, but honestly, as a theater operator, it is not earth-shattering -- a little annoying, maybe a bit confusing, but the annoyance and confusion will soon pass as VOD day-and-date is assimilated into the release strategies of uncountable films desperately seeking to establish a place for themselves in a highly oversaturated market.

    Seeing a work of cinema day and date, via VOD, is just another way to be entertained at home with moving images. In the second decade of this 21st century it should in no way be discussed as a revolutionary concept or a dynamic that will significantly shift markets. 75 years ago seeing moving images at home was a revolutionary concept. 75 years ago the ability to see video at home shook the foundations of cinema markets profoundly and for the next decade and a half it reshaped the market for cinema (and TV). The shock of seeing video on a small screen still reverberates today. However, theatrical exhibition survived the initial cataclysm and has been essential stable since 1964, for nearly 60 years. Day and date VOD is the merest of aftershocks from that long ago, but cataclysmic cinema earthquake caused by small screen video technology.

    People go to see films at a theater, not because they cannot see films at home, but because it is a profoundly affecting way to experience a story; because it is the way many filmmakers intended their films to be seen; because human being are social animals who like to get out of the house and spend time together with other life travelers experiencing the flickering fire of the cinema in darkened rooms full of interested strangers.

    Cinema can be seen in lots of ways. We all know that it is mostly seen on small screens as a private or semi-private experience. But this is artistically inauthentic for many films. Inauthentic does not necessarily mean inconsequential or inappropriate. For example, we understand it is just fine to see a video capture of a play performed in a theater -- but it is not the same as seeing a play at a theater. It can be good to hear a great symphony played from a CD, but it’s not the same thing as hearing a live orchestra. You can watch and listen to a Justin Timberlake video performance, but it’s not like being in an area or theater full of Justin Timberlake fans.

    Movies need theaters -- for three good reasons I can think of:

    1) Aesthetic mandate – for many films to have full impact or be fully appreciated, they must be perfectly presented on a BIG screen in a beautiful darkened room full of strangers -- strangers full of artistic anticipation and cultural curiosity.

    2) Marketing godsend – reasonable success in theatrical exhibition is the most reliable (but not absolutely necessary) way for a movie to achieve success in all other release platforms. Theatrical exhibition can benefit filmmakers and the business of filmmaking.

    3) Fulfilling the primordial Campfire Desires – fulfilling the human urge to experience a story in community, in the dark; stories masterfully told by flickering light. Carl Jung and Joseph Campbell would have loved this reason!

    Today, it is the in-home video market where the seismic shifts are occurring. Will Netflix rule? Will television networks survive? Will cable television be relevant twenty years from now? Who knows?? However, what I know for sure is that twenty years from now – one hundred years from now – there will be passionate, community-based independent theatrical exhibitors out there in cities large and small, showing movies by classic, great, and up-and-coming filmmakers to cinephiles in uncountable places throughout the world. See you at the movies!
    --------------------------------------------
    Russ Collins was chosen for the inaugural class of IndieWire Influencers. He is the Director of the Art House Convergence, the CEO of the Michigan Theater, an Art House in Ann Arbor, and the Founder of Cinetopia Festival, an up and coming festival in Detroit.

  • Paul | November 11, 2013 7:21 PMReply

    I'm sure I'm in the minority here, but I think a different frame/still shot could've worked better.

  • Frank Casanova | November 11, 2013 3:23 PMReply

    "VOD is either the salvation -- or the death -- of independent film"... VOD can be the salvation for low budget Indy Films... and indeed, may hurt higher budget Indy Films... Those bigger budget films that are simply not made within the studio system, but are every bit a studio-like film. For the low-budget Indy Movie, we aren't getting into theaters anyway, so VOD becomes the way to go.

  • CHRIS HORTON | November 11, 2013 2:17 PMReply

    Good article - the only thing I'd take issue with is the statement that "it's unlikely studios/theaters will ever allow simultaneous streaming on Netflix/VOD". I think the opposite: it's inevitable that they will. Maybe not this year, or next, but within five years? Absolutely.

  • NoWay | November 11, 2013 5:09 PM

    Producers and directors who make blockbuster tentpoles are too smart to do this...you won't see Avatar 2 on Netflix when it hits theaters...or Hobbit, Star Wars, etc....not happening

  • Ricky | November 11, 2013 1:02 PMReply

    VOD is the savior/future of indie film for a few reasons.

    It is hard for me to care when theaters say "Well, I'm not going to show it at my theater, if its also on VOD" when the movies that are going to VOD are the movies that aren't really making it to theaters anyway. Which isn't always their fault, I'm sure. Part of it lands on the distributors. And I love small, artsy theaters. I would throw money at them if I had it to throw, but the closest ones to me are in Boston about 40 minutes away with the possibility of traffic and the inevitably of no free parking, all of the costs together continue to make VOD that much more attractive.

    Plus if it wasn't for VOD "theatrical" release, a lot of those movies wouldn't be seen until VOD "home video" release, so your basically just cutting out the middle man, the problem being the middle man is the cinema-going experience and I would like that to persevere.

  • SK | November 11, 2013 12:55 PMReply

    How many times has indiewire used the headline "Is VOD the Future of Independent Film?"?

  • Chuck | November 14, 2013 1:27 PM

    By my count, several thousand.

  • And | November 11, 2013 5:11 PM

    How many times have you trolled?

  • rOBERT | November 11, 2013 12:48 PMReply

    Paulina Garcia is AMAZING in GLORIA, OSCAR FOR HER!!!

  • JACKIE | November 11, 2013 12:48 PMReply

    PAULINA GARCIA HAS TO BE NOMINATED AT ACADEMY AWARD FOR HER WONDERFUL PERFORMANCE IN GLORIA

  • Robert Maier | November 11, 2013 12:33 PMReply

    I run a small art cinema. It hurts when a potential patron says of a new film, "I just saw that last week on i-tunes, so I'm skipping it." Don't know if it will kill my little cinema or not. Definitely has an impact. How many people will say, "I saw that on netflix for free, and it was so good, I'll pay $9 to see it in a theater." It's nice that there are still people around who will pay to see films in a theater situation. The unknown is are there enough to keep things going? One problem is the $ being charged by distribs for guarantees or non-theatrical showings. They'll take pennies per head from Netflix, but want $5 per head for an theater screening. What's that about?

  • Frank Casanova | November 11, 2013 3:28 PM

    You are definitely in a tough business. Squeezed by the Distributors who beat you up (because they can) and the economics of the small Indy producer who must turn to VOD to make their money back since there are simply not enough Art House cinemas to place their product in.