At the Berlin International FIlm Festival, which kicked off on Thursday night here in the German capital, bold-faced names including Penelope Cruz, Daniel Day-Lewis, Tilda Swinton, Goldie Hawn and The Rolling Stones have been in the spotlight in Potsdamer Platz, while over at the nearby Martin Gropius Bau, thousands of buyers and sellers from around the world are making deals for finished films and pre-bought projects during the concurrent European Film Market. But, just under the radar leading industry insiders have been gathering daily over the weekend to discuss and debate the future of digital cinema, online distribution, and new technology for the home at an intimate series of sessions.
While the main EFM convention floor inside Martin Gropius Bau features leading buyers and sellers such as Celluloid Dreams, Focus Features, and Fortissimo, the 2008 edition of EFM Industry Debates showcased the next generation of labels that are positioning themselves as the potential brand names for future film markets: among them LOVEFiLM.com, Netflix, Tiscali and Cinelan. Many of these newcomers in the spotlight this weekend are backed by, or in some way involved with, Arts Alliance Media, which programmed the seminars and is an EFM sponsor.
“Customers are demanding to get content faster,” noted Arts Alliance CEO Howard Kiedaisch yesterday (Saturday), underscoring a point that is clearly driving current moves to alter the ways films are delivered to viewers. “They are obviously consuming it.” But, as numerous panelists noted during the weekend conversations, a turf war between the major Hollywood studios and independents may be emerging as companies such as Netflix and Apple’s iTunes find success monetizing the digital delivery of movies.
Arts Alliance has positioned itself at the nexus of delivering movies both online and via digital theaters. Its long-term virtual print fee (VPF) deals with studios, including Paramount, Universal, Sony and Fox, are aimed at converting theaters with money from the studios themselves, while its Vizumi Network enables online streaming of movie and other content.
“Our model is all about distribution and delivery,” Kiedaisch said this weekend. Friday’s session examinded the impact these studio VPF deals may have on independent distribution in Europe, while Saturday and Sunday delved into the intricacies of online distribution, including rights issues, collapsing windows, the apparent dominance of Apple in the space, and a number of case studies being explored both in Europe and North America.
The three one-hour sessions, held upstairs at Berlin’s Marriott in Potsdamer Platz — each in front of an audience of at least 100 EFM attendees — revealed the wide range of optimism and skepticism surrounding digital cinema and online distribution. For every statement about technology revolutionizing the business there was a counterpoint about the current limited audiences and miniscule revenues.
Some challenged the inflated expectations created by those forecasting a “paradigm shift” coming from digital opportunities. “There has been the false hope that this would change everything,” noted British film producer Arvind David this evening, referring to the prognostications about online distribution. “For movies of any scale (such as projects with budgets of anywhere from $1 – $5 million on up) it’s not making a difference now.”
Liesl Copland of Netflix’s Red Envelope Entertainment countered the point, arguing that especially for specialty films and those aiming for a niche audiences, there are tangible opportunities driven by online outlets such as her company’s web-based DVD service and emerging streaming platform. “The ‘Long Tail’ is useful for aggregators or people who live to be 500 years old,” quipped producer Arvind David, referencing the title of Chris Anderson‘s book about the longterm value of niche content (as sold by outlets such as Netflix or Amazon). “For the individual filmmaker, unless they live to be 500 years old, it’s not,” David added. “Unless they sell the rights to us…” Netflix’s Copland quickly responded.
“They should be licensing their content to anyone and everyone, for low minimum guarantees,” Arts Alliance’s Howard separately, referring to the resistance over online deals, “They are moving but they are not moving as fast as I would like.”
The success of streaming sites like YouTube has instigated a range of activity with start-ups and established brands alike positioning themselves via a variety of websites and services. More people are spending more time viewing content online, but most of that time is spent on YouTube specifically, explained Robert Andrews of PaidContent: UK (citing recent studies of UK usage), but as Raoul Heinze from Hewlett Packard noted, the market is stil tiny. “More people are watching free television on TV networks’ sites than anything that Apple or anyone else is selling.”
“The ‘Long Tail’ exists, but the long tail doesn’t come for free,” added Hewitt Packard’s Heinze, reiterating that there are high costs attached to digitizing films and then getting them to audiences.
Panelists and attendees re-ignited the usual debate about the collapse of traditional distribution windows, even as examples and models of day-and-date distirbution were offered. “It’s ridiculous to say that online is going to replace television,” noted Tim Sparke from MercuryMedia International, during Saturday’s session. Igniting a pointed exchange, Sparke continued, “If you want to fill a cinema screen, put the movie online. You have to embrace piracy because you can’t fight it. The pirates are out there and it’s free advertising for your movie, make the most of it.” Arts Alliance’s Kiedaisch reacted, “I don’t think you should embrace piracy…”
“Just allow people to consume media in ways that are [convenient] for them,” summarized Tim Sparke, “The Internet is always on, it’s always available.”
indieWIRE’s coverage of the 2008 Berlinale is available in iW’s special Berlin section.