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The Business Street 2013

Industry Report: Distribution and Exhibition

The consumer at the centre of the game for a successful VoD strategy


- Because of the increasingly higher expectations of the public, producers, distributors and operators have to find new strategies that benefits all players

The consumer at the centre of the game for a successful VoD strategy

The 2013 edition of The Business Street, the industry section of the Rome International Film Festival, has brought special attention to the new models of digital distribution, esspecially Video on Demand. The first part of the debate “The Digital Distribution Era: New patterns of film circulation and consumption,” held on November 14 at the Casa del Cinema, has tried to answer the question of whether these new models are capable of becoming a primary source of revenue for content owners, and if it represents an important additional opportunity for independent filmmakers to find their audience.

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The debate, which has been moderated by Alain Modot (Media Consulting Group), has been attended by Von W. Johnson (VJA Consulting), Erik Lambert (The Silverlining Project), John Von Thaden (Magnolia Pictures), Emmanuel Joly (Creative Europe - MEDIA European Commission), Ross Fitzsimons (Curzon) and Nicola Allieta (Under the Milky Way). Even though they come from different realities and industries, they all have agreed that today a successful distribution strategy, be it digital or traditional, has to put the consumers at the centre and has to meet their needs and tastes. To do so, high-quality content is essential.

The US industry is well ahead of the rest of the world in terms of VoD experimentation, while Europe seems to have a more cautious approach to these new models. The windows system, which prevents different kinds of releases to overlap, has long protected theatrical exhibition. Some experts argue that this system has made it difficult to create a legal offer for online audiovisual content, thus favouring the widespread development of piracy. As Von Thaden pointed out, if the consumer wants to watch your product, they'll manage to do it no matter how. Legally or not. According to Johnson's words, audiences today want things anytime, anywhere, anyhow.

Johnson also explained that part of the problem is the conflict between distributors and exhibitors. While the former want to find new ways of making business and distributing their products, the latter prefer things to remain as they are, not only because of the actual ticket sales but also due to the revenues generated by concessions on theatres, such as beverages and food. Therefore, Johnson has explained that it is essential for producers and distributors to find a way to make exhibitors feel less threatened. “Which is the business model that enables total release flexbility?”, he wonders.

Johnson and Von Thaden have focused mainly on the US system, whose window system is business-regulated (meaning that non-theatrical releases depend very much on negotiations with exhibitors). Thanks to this higher flexibility, Magnolia has been able to do regularly Ultra VoD releases, in which films are distributed online even before their theatrical release (normally 4 weeks). It has been proven that this approach doesn't damage the theatrical performance of the film, but on the other hand may create a stronger buzz that benefits all channels.

Europe has a definitely more defined structure, but it doesn't mean at all that there is no will to explore new modalities. Actually, Joly has talked extensively about the 2 M€ preparatory action undertaken by the MEDIA Programme to experiment with the digital circulation of European films. Three projects will be distributed widely and simultaneously and provide a base to analyze the possibilities of these modalities. Other goals of the initiative are promoting and inspiring new distribution methods, providing information on current practices and create new models at a national level.

Fitzsimons stressed the importance of connecting the best content with the customers as a key to success. As he has said several times, it's essential to know your audience and give them what they want. While on one hand he has explained that cinema is also a way for people to connect and to be part of a community (people like to spend time in and around the theatres), for a large part of the population it is not always possible to go to a cinema, due to time constraints.

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