Last week, Fox Home Entertainment gave a big vote of confidence to the digital future of foreign-language movies with the announcement of Fox World Cinema. The studio promises that the label will make available new films from around the world on DVD, video on demand and via digital download.
But then there's a movie like Lucrecia Martel's widely heralded "A Headless Woman." The Spanish-language film premiered in Cannes competition and ranked as one of the best films of 2008 in many critics' polls. And it did almost "zero business" last year on cable VOD, according to distributor Strand Releasing.
"It didn't get the carriage," says Strand's Jon Gerrans. "We got maybe 10 million homes as opposed to 70 million homes. The transactions were less than a thousand."
As buyers head for the Cannes Film Festival, hopes are high that digital distribution can do something that DVDs couldn't. Without the costs of production and shelf space, international art cinema could mean greater access and larger audiences.
Although the VOD universe is still new enough to be a work in progress, there's already a sense that it's creating subdivisions and limitations. A recent report published by The Film Collaborative's Orly Ravid showed that distributors and aggregators agree that Time Warner VOD (12.6 million users) is far more open to foreign language cinema than Comcast (23 million users).
Then there's the distributors who have ties to cable operators and television channels, like IFC Films (owned by Cablevision) and Magnolia Pictures (sister company to HDNet), and larger specialized companies with corporate ties, like Sony Pictures Classics or Fox Searchlight
But if you're a full-fledged independent like Strand, Kino Lorber and New Yorker Films, among others, digital can look like just another way to struggle.
Part of the problem, as Gerrans points out, is the volume of titles on VOD. If a little-known foreign film is going to make a dent, it will need a lot of market penetration. Presumably, that's something Fox can offer through its new VOD label along with the convenience of direct-to-digital distribution. It's the kind of one-stop shopping that foreign sales agents often find appealing.
However, FWC's initial slate appears to favor genre films. The titles include Korea's Cannes-bound crime thriller "The Yellow Sea," Chinese actioner "The Butcher, the Chef and the Swordsmen," Bollywood cop film "Dum Maaro Dum" and the Italian crime thriller "Vallanzasca: Angel of Evil."
Fox's approach also squares with Ravid's report, which showed that, much like other VOD titles, foreign-language genre films work better than dramas or comedies.
So what about Netflix and other subscription VOD (SVOD) companies? "Principally, SVOD is the new pay TV," says Music Box Films' Ed Arentz.
In fact, Arentz says Netflix and its rivals actually provide a far better option for foreign-language films. "The SVOD situation is better than the pay TV situation ever was," he says. "They're manna for foreign language film distributors."
Licensing fees on SVOD platforms are usually based on how well the films did theatrically -- a measure that can prevent plenty of critically acclaimed films from being sold to operators. But as Amazon, Google, Hulu and other media companies try to compete with Netflix, they will need more content, which could benefit smaller art-house foreign films.
"Because other platforms and MSOs are competitive with Netflix, that may include an interest in some longer-tail content, and even some foreign language films that they normally would not have wanted," says Ravid.
Strand's Gerrans agrees. "[SVOD] doesn't make up for the loss [of broadcast deals and DVD sales]," he says. "But it helps offset the loss. We're trying to find every possible partner in the broadband arena that can help make up for that loss. But there are some where it doesn't even make sense, because the cost to deliver new masters to them exceeds what potential you can make for foreign language titles."
For now, however, Netflix has a near monopoly. Kino Lorber president Richard Lorber says that makes it difficult for his company to recoup. "Until there's an Avis to Netflix's Hertz, there won't be a meaningful revenue stream," he says.
Claiming a digital homestead has taken on additional urgency with the retreat of once-active outlets like the Sundance Channel. "The indication is that [foreign films] are not what they're looking for going forward," says Gerrans, who believes his company's Sundance deal for "Taqwacore: The Birth of Punk Islam" will be their last with the cable station. Gerrans estimates the absence of the Sundance Channel may represent a 30% loss in revenue for every new title they acquire.
A Sundance Channel representative confirms that the company's "acquisition strategy is to acquire foreign films from our sibling companies Sundance Selects and IFC Films," thereby leaving other content providers without a broadcast home at the network.
Lorber says that leaves few other available outlets. He calls Link TV "negligible" and says the Doc Channel provides only "modest licensing fees." And the problem with PBS outlets is they focus exclusively on "specific kinds of documentaries, and they're probably not doing more than a couple of acquisitions a year."
"There really are no channels of any consequence," he says. "There's something wrong when some of the best films made around the world are nominated for Oscars and are unavailable for viewers to watch on television. It's not an injustice, but it's a bizarre reality."
Lorber suggests there's an opportunity for an entrepreneur to launch a new 'world cinema' channel, citing CineMoi, a pay-TV service screening French films in the UK. "They're building a subscriber base," he says. "Whether they can make it work in the U.S, I'm not sure."
EPIX, the fledgling joint venture between Viacom's Paramount Pictures, MGM and Lionsgate, is a key new cable player that could become a potential home for international cinema.
Samuel Goldwyn Films, for example, has an output deal with EPIX, "and they've been good," says the company's VP of acquisitions Peter Goldwyn. "The concept of some sort of output deal, which was thought to be disappearing, is coming more to the forefront. A lot of companies are looking for consistent flows of product."