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Sundance 2009 | You, Me and VOD

Sundance 2009 | You, Me and VOD

On Monday morning, The Independent Film Channel hosted a breakfast press conference here in Park City to announce their new plans for the company’s Festival Direct video-on-demand (VOD) service. Joined by filmmakers Steven Soderbergh and Joe Swanberg, SXSW Director Janet Pierson and moderator Eugene Hernandez from indieWIRE, IFC Films President Jonathan Sehring outlined the company’s new partnership with SXSW; five films at this year’s SXSW Film Festival will receive a simultaneous premiere at the festival and a national release on the Festival Direct VOD service, available immediately for purchase on televisions in 30,000,000 households across the country.

Near the end of the press conference, I asked Joe Swanberg (whom I consider a friend and whose work our festival has shown in the past) if he had any concerns about a film festival for his new film Alexander the Last, one of the films participating in the IFC/ SXSW program, considering that the moment it played one time in Austin, TX, it would be available in 30,000,000 homes. Did that choice kill the film’s subsequent festival run? Joe gave a very articulate answer about his hope that the film would still play festivals and outlined the ways in which festival screenings would now essentially represent the theatrical experience for his film in toto. He also reaffirmed his personal commitment to the film festival community and hoped the film would show at festivals in concert with its availability on VOD. The press conference moved on.

IFC Films’ Jonathan Sehring and Director Steven Soderbergh, Monday, January 19, 2009, Park City, UT

For me (and for a few of my colleagues), this announcement marked a seismic shift in the landscape of film festival programming. There are several factors at play in this announcement, the most startling of which is to collapse the “theatrical” window for certain films down to one screening at a film festival. While, as Swanberg discussed, this allows the company and the filmmaker to capitalize on the buzz, press, interest and energy surrounding a film’s premiere screening and for the film to begin making money instantaneously, the fact that 30,000,000 people will have access to the film immediately calls into question the value of subsequent festival screenings. To me, this makes tremendous sense for the filmmakers and IFC, but what does it mean for other festivals who may be eager to show Alexander The Last and, if this deal is an indication of things to come, what does the future hold for other films and other companies?

In thinking about the ramifications of this deal for my own festival, some concerns immediately leapt to mind. Let’s use Alexander The Last as an example of how these concerns might impact our festival; The film will launch during SXSW on VOD, some two weeks before my own festival in Sarasota begins. How does this new release strategy impact my film festival’s model?

First, Sarasota is firmly in the footprint of IFC’s VOD service; Comcast, the only cable TV provider in Sarasota County, carries the Festival Direct films on VOD. If, as IFC said in their public comments about the business of VOD, ticket sales for theatrical releases are outpaced roughly 2 to 1 by VOD, that means two out of every three interested audience members will potentially buy the film on television in the two weeks it is available to them before my film festival even starts. That means I am competing with the VOD screening in terms of drawing interest from an audience for the film.

That said, there are certain ways in which VOD cannot compete with the festival experience; talent in attendance, the festival’s events and the energy of a living, breathing community of film goers could still provide a significant draw for audiences eager for a traditional festival experience. Even though VOD is emerging as the profit leader for IFC’s business, attendance for Alexander The Last could be strong if Joe and his cast come to town, speak to audiences and participate in the festival experience.

SXSW’s Janet Pierson and Director Joe Swanberg, Monday, January 19, 2009, Park City, UT

So, on the surface of things, playing the film might make sense. But there are new, competing interests at play. The energy generated by a live event for an unknown film with little marketing that will be a relative “risk” for film-goers unfamiliar with the movie is complicated by the economics of a VOD purchase; the film is $7 on VOD and as many people as you can fit into your house are able to watch the movie for a single purchase. Weigh that against the $9 per individual ticket a festival needs to charge in order to pay for the costs of showing the film. From an economic standpoint, VOD provides an incentive to stay home and watch. Can the festival “event” outweigh the incentive of staying home? That answer is easy when the world comes to a place like SXSW to party and take in the live music along with the interactive and film events. But at a smaller, regional festival like mine, I really don’t know what my audience would do.

Let’s also argue that, since my festival makes an effort to not promote or even track the premiere status of films, in many cases we would be interested in showing films that have played in other places but have not yet played in our community. Even if a film has opened in a theater outside of our area, we might be interested in showing it if it has been unavailable to our audience. This decision has been crucial to the availability of films at a regional festival like ours; if we insisted on some premiere status or another, we’d probably never get the films we feel are best for our audiences, we’d alienate our colleagues at other festivals who are seeking to show the same films we are, and we’d be doing a disservice to the filmmaker, who we feel should retain the ultimate control of their own film, playing it where they want and when they want. It’s their movie, and it is the mission of our festival to try to help filmmakers execute their strategy for their movie, finding an audience among our attendees.

IFC’s deal with SXSW is both a validation of the filmmaker exercising their own best interest and the apotheosis of the glorification of the “premiere”; By launching the film into 30,000,000 homes after a single festival screening, the premiere of a film becomes even more important to the festival community. Now the festival premiere is, effectively, the film’s actual opening day, and by applying the day-and-date model to a festival premiere instead of to a theatrical release after a festival run, what was once a months-long process that spanned several markets across the country, fed the film festival community its content, and helped build word of mouth has, in the case of this program, collapsed into a single screening of the film.

From a regional festival’s point of view, this is the issue of the VOD release strategy as a whole; For many of these films (and every film, I think,—and correct me if I am wrong—in the Festival Direct program), the traditional theatrical release will not happen at all. And so, in a sense, the premiere/ VOD launch becomes the film’s entire release; unless IFC Films plans on charging festivals to play movies already on the VOD service (which I hope is not the case), there is no further revenue to be gained from playing festival screenings in theaters. Instead, post-premiere festival screenings become the word of mouth/ marketing tool to drive business to VOD sales for films already sitting on the cable box (instead of, say, driving VOD sales for a film soon to be released on the cable box). In some ways, this is a role festivals are comfortable playing (it echoes the traditional word of mouth function for upcoming theatrical releases), but it also represents an inherent tension for festivals who would now be showing a film in direct competition with an existing release in their own market. And what if that local cable company is a sponsor of the festival? Now you’re directly competing with a sponsor’s revenue stream. Talent attending aside, if the premiere/ VOD launch represents the film’s release, shouldn’t festivals treat it as they would the release of any other film in their market? In almost all cases, that means not playing the film and not competing against an existing release.

If this program were only to exist as it does now, a small sampling of films from SXSW past and present, I don’t think many festival programmers would mind. I also believe that any festival in their right mind would sign up to be the “premiere” event for IFC’s VOD titles; I’d be lying if I said that I wouldn’t be honored to have our festival participate in a program like this. But there is another worrying feature of this deal, and that is the vastness of IFC’s acquisitions program and the company’s competitive interest in making the television cable box the primary delivery system for their films.

Let’s be honest; without the good work that IFC has undertaken in acquiring and distributing foreign language and independent film in this country, our nation’s access to these movies would be reduced to almost nothing. I can’t praise them enough for their courage and commitment to finding an audience for great films, regardless of exhibition platform, and in a way that is economically sustainable for the company and the filmmakers. This is no small feat in today’s cultural climate and considering the ongoing upheaval in the economics of film distribution. To be blunt, we live in a nation where Paul Blart: Mall Cop can make $31,000,000 in three days of release, which probably eclipses the annual income of all of IFC’s films in all formats combined. We are the outsiders in our own country.

Obviously, if IFC could buy 100 foreign titles a year, give them all a theatrical run and make lots of money in the process, if we could change the culture of film in America, we wouldn’t be having this conversation. As much as it serves the interest of IFC to partner with their cable television clients to deliver revenue to the set top box and make sustainable deals on films, I also think it is true that the rise of the company’s VOD program was born out of necessity and the economic reality of distributing challenging, foreign work in today’s world. Who can begrudge the company for that?

And who can begrudge filmmakers like Joe Swanberg or Matthew Newton (whose terrific film Three Blind Mice is also a part of this program) for wanting to capitalize on the buzz of their SXSW premiere and make money for themselves, their investors and their collaborators? No festival in its right mind would seek to get in the way of that mission. As I said before, from the perspective of IFC’s business model, this program makes terrific sense.

But I am left wondering how my festival will need to change in order to bring value to IFC and the filmmakers who work with them or, say, Magnolia Pictures and its VOD platform model. Are we truly relevant to the process of audience building when films are instantaneously available? And what about films for which there is no “event”, foreign titles with directors and actors not available to attend the hundreds of regional festivals eager to show their films? These films make up the overwhelming majority of IFC’s VOD library. Will the films thrive by sitting on a list, buried under layers of click-through menus on cable boxes, waiting to be rented at home? What does that mean for American film culture, for building new audiences for movies? How can festivals add value to this process?

I ask these questions not because I have an immediate answer, but because I honestly don’t know. One thing is very obvious though, and that is that the long-awaited change is now front and center in the film festival industry, and festivals will either find creative ways to accommodate that change or they will become irrelevant. I am not so worried about this announcement in terms of our 2009 festival, but looking ahead, the writing is on the wall. The relative value of the film festival may be dimming, and we all should begin looking to find ways to reinvent ourselves in this new world.

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