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Is VOD the Future of Independent Film? Yes -- and No.

Photo of Paula Bernstein By Paula Bernstein | Indiewire November 11, 2013 at 10:27AM

Is VOD the future for independent film? Well, yes and no.
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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"
"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.

This article is related to: Filmmaker Toolkit: Distribution, Tech, VOD, Gravitas Ventures, Phase 4 Films, Good Ol’ Freda, Ryan White





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