Celebrating 17 Years of Film.Biz.Fans.
by Dana Harris
October 7, 2011 5:30 AM
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What the Hell is Digital Distribution? Here's 7 Core Ideas You Must Understand

You get it: Digital distribution is the future and the future is now. What you probably don't get is exactly what that means, because… well, no one understands it. Not entirely, not yet. Too many players, too many moving parts, too much in flux. However, there are a few ideas -- seven, to be exact -- that you can act on now.

1.  CARVE OUT DIY DIGITAL.
Distributors and Foreign sales companies often want all rights, including all digital distribution rights.

No matter what, you must carve out the ability to do DIY digital distribution (services include EggUp, Distrify, Dynamo Player and TopSpin) whether off your own site, off your Facebook page or directly to platforms. Platforms and services can almost always geofilter, which eliminates conflict with territories where the film has been sold to a traditional distributor. Often, distributors don't mind that a filmmaker also sells directly to fans, in any case.

2.   PLATFORMS ≠ AGGREGATORS ≠ DISTRIBUTORS.
Here's the most basic definitions: Platforms are places people go to watch or buy films; aggregators are conduits between filmmakers/distributors and platforms; distributors usually take more rights for longer terms. And some companies combine more than one of these functions.

Aggregators usually focus more on converting files for, and supplying metadata to, platforms. They usually don't need rights for a long term and only take limited rights they need to do the job. Marketing is rarely a strong suit or focus for an aggregator.

A distributor should be skilled at marketing -- otherwise, what's the point? Sometimes distributors are direct to platforms; sometimes they go through aggregators. Know the difference; fees are taken out every time there is a middleman.  

Filmmakers should want to know the fee the platform takes (it's not the same for all content providers) and know if a distributor is direct with platforms or goes through an aggregator.  Also, filmmakers should have an understanding what each middleman is doing to justify the fee. Ask for a description in writing of what activities will be performed.

3. THINK OF DIGITAL PLATFORMS AS STORES.
A film should try to be available everywhere. However, sometimes that's too costly or otherwise impossible. When that's the case, prioritize according to where the film’s audience consumes media.

Back in the DVD days, you'd want a DVD of an indie film in big chains such as Blockbuster and Hollywood Video -- but a cool, award-winning indie would do well in a 20/20 or Kim's Video because those outlets target a core audience.

Same with digital. While many filmmakers want to see their films on Cable VOD, some films just don’t work well there. Some films make most of their money via Netflix and won't do a lick on business on Comcast. Others do well on iTunes; some do business via Hulu or SnagFilms.

Know your film and its audience's habits. If money or access is an issue, be strategic in picking your “stores” and make your film available where it's most likely to perform. It may not be in Walmart's digital store or Best Buy's. Above all, if you have a community (followers, a brand), your site(s) and networks may be your best platform stores of all.  

4. KNOW YOUR CABLE VOD LISTINGS.
It's hard to get films marketed well on Cable VOD platforms. Often metadata isn’t entered, or entered incorrectly -- and it's nearly impossible to fix after it goes live. Oversee the metatags submitted for your film and check immediately upon release. Also, since genre/category folders and trailer promotion are not always an option, films with names starting in early letters of the alphabet (A-G) or numbers can perform better. That said, there's a glut of folks trying that now and cable operators are getting wise to the ploy. All the more reason to focus on marketing your title so audiences look for it.

5. HAVE GOOD ART THAT WORKS SMALL.
For God's sake, take good photos. And compose the images with an eye toward the fact that it won't be on a poster; it will be on a computer screen. Look at your key art as a thumbnail image and make sure it is still clearly identifiable.

6. TIMING IS EVERYTHING.
If accessing Cable VOD is part of your plan, digital distribution often has to be done in a certain order,. Sometimes Cable VOD is not an option for a film (films often need a strong theatrical run before they can access it); in this case, the order of digital is more flexible and you can be creative or experiment with timing and different types of digital. However, Cable VOD's percentage share of digital distribution revenues is still around 70% (it used to be nearer to 80%), so if it's an option for your film it's probably worth doing.  

If your film is in the digital distribution window before Cable VOD, that will eliminate or at least dramatically diminish the potential that cable, or even an intermediate aggregator, will accept it. There is more flexibility with transactional services and much less flexibility with YouTube, or subscription or ad-supported services. Films that opt to be part of the YouTube/Sundance rental channel initiative could not get onto Cable VOD afterward. Of course, there are exceptions to every rule, but better to plan ahead than be disappointed.

7. THE DEVIL IS IN THE DEFINITIONS.
There is no standard yet for definitions of digital rights. IFTA (formerly known as AFMA) has its rights definitions and for that organization’s signatories, there's a standard. But many distributors use their own contracts with a range of definitions that aren't uniform. When analyzing distribution options, be aware that terms such as VOD can mean different things to different people and include more or fewer distribution rights and govern more or fewer platforms.

Consider VOD. IFTA describes it as a PayPerView Right (Demand View Right) and limit it to: “transmission by means of encoded signal for television reception in homes and similar living spaces where a charge is made to the viewer for the rights to use a decoding device to view the Motion Picture at a time selected by the viewer for each viewing”.
 
However in some contracts, it’s defined as “Video-on-Demand Rights,” which is a lot more complicated and all encompassing. Here's one sample:

a function or service distributed and/or made available to a viewer by any and all means of transmission, telecommunication, and/or network system(s) whether now known or hereafter devised (including, without limitation, television, cable, satellite, wire, fiber, radio communication signal, internet, intranet, or other means of electronic delivery and whether employing analogue and/or digital technologies and whether encrypted or encoded) whereby the viewer is using information storage, retrieval and management techniques capable of accessing, selecting, downloading (whether temporarily or permanently) and viewing programming whether on a per program/movie basis or as a package of programs/movies) at a time selected by the viewer, in his/her discretion whether or not the transmission is scheduled by the operator(s)/provider(s), and whether or not a fee is paid by the viewer for such function/service to view on the screen of a television receiver, computer, handheld device or other receiving device (fixed or mobile) of any type whether now known or hereafter devised. Video-on-Demand includes without limitation Near VOD (“NVOD”,) Subscription Video-on-Demand (“SVOD”,) “Download to burn”, “Download to Own”, “Electronic Sell Through” and “Electronic Rental.”

Yeah. This is why lawyers have such nice summer houses.

Here's some simpler questions to start: Ask if a definition of VOD or another type of digital right includes “SVOD” (Subscription Video on Demand) and includes subscription services such as Netflix and Hulu Plus. If a contract notes a distributor has purchased “VOD Rights” but does not define them, or defines them broadly, then do they have mobile device distribution rights as well? “Video-on-Demand” sometimes only refers to Cable Video on Demand; other times, it's more general. In a “TV Everywhere” (and hence film everywhere) multi-platform all-device playable universe, the content creator needs to know.

Know what you want for and can do for your film in terms of distribution and carve it up and spell it out.

This is an edited excerpt from "Selling Your Film Without Selling Your Soul, which was written by The Film Collaborative co-executive directors Orly Ravid and Jeffrey Winter in association with filmmaker/author Jon Reiss (“Think Outside The Box Office”) and Sheri Candler. It's available via Apple iBooks, Amazon Kindle, Barnes & Noble Nook and ePub. It's supported by premiere sponsor Prescreen and official sponsor Dynamo Player. Prescreen and Area23a co-sponsored the book's printed edition.
 

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3 Comments

  • Richard Propper | October 19, 2011 7:12 AMReply

    Great article! Yes, indeed the future of distribution is heading this way. As a distributor of non-fiction content for more than 17 years, I can say that the balance between wanting and having both digital and standard broadcast sales is currently at odds. We license programming in the broadcast marketplace and digital rights have to be carefully navigated. The broadcasters want these rights for some window related to the airdate (before and/or after).

    We make sure that the producer can continue to retain the Pay VOD rights for themselves (similar to a DVD right), but the rest need to be withheld for the broadcast window. Generally speaking, most producers are happy to get a big push from broadcast to expose the title in the largest audience possible, then capitalize on Pay VOD sales for themselves after the airdate - and there is that license fee too! It's tough for everyone out there, and the more revenue streams the better.

    Again, good article.

    Richard Propper
    CEO and Director of Intl. Content Sales
    Solid Entertainment

  • Damon | October 7, 2011 11:29 AMReply

    Thanks for the article. Really good info in here and it gives us Indie Filmmakers a good start at what's coming for the future of distribution. NO MORE distributors getting FAT off our hard work and effort. THE DIGITAL REVOLUTION IS HERE!!!

    THIS IS THE MAKE IT HAPPEN FOR YOURSELF GENERATION OF ARTISTS AND ENTREPRENEURS.

    I love it!

  • Orly Ravid | October 7, 2011 7:26 AMReply

    I wanted to add to this. Since I initially drafted it TFC has used the Prescreen platform for one of our films, How to Start Your Own Country and we are soon to use it for others. It was a really great way to breathe some life and create awareness for a film at the start of its digital distribution cycle. One has to plan Prescreen ahead of time and work it in between windows and before iTunes and stuff like that but it's very interesting and so far has been very useful. And I am not just saying that because Prescreen was a sponsor of our book .