VoD cannot replace DVD, according to industry professionals at Cannes
by Birgit Heidsiek
- CANNES 2017: The impact of VoD was the key issue discussed at the European Audiovisual Observatory conference organised on the Croisette
At the European Audiovisual Observatory conference in Cannes, several industry members discussed the impact that video on demand (VoD) is having on the film value chain. The theatrical release is still the main source of income, but there is a high box-office concentration on a few titles, and transactional video on demand (TVoD) cannot replace DVD in terms of revenues. In addition, not every film is available on VoD: while 87% of US films can be found on TVoD, only 46% of European movies get a release on a similar platform. “The theatrical release does not guarantee a VoD release,” moderator Michael Gubbins pointed out in his opening speech.
Over-the-top (OTT) subscriptions are changing the model drastically. While TVoD is replacing DVD, subscription video on demand (SVoD) services such as Amazon or Netflix don’t pay for a single film. “SVoD is non-exclusive and allows for a lot of different revenues. Now we are selling Dutch films to China,” said Wendy L Bernfeld, managing director, Rights Stuff. “There is a huge array of little deals you can do,” emphasised Marc Smit, co-CEO of Cinéart. “We had a very linear value chain; now it is a mosaic of smaller deals.” But this also requires different strategies for different films. “We have to run faster on a lower budget,” stressed Tine Klint, managing director, LevelK.
All films have to be available – otherwise, they get put on pirate platforms. Netflix and Amazon are offering their online subscribers the “all you can eat” principle. Thanks to a new algorithm, there are 6,000 different movies available every week. “It would be better to release fewer films,” explained Jaume Ripoll, managing director of independent Spanish platform Filmin, which gets only a small fraction of the bigger VoD pie in Spain.
If a deal is non-exclusive, the money is only a tiny percentage of the revenues that have been generated in the past. “We need to find money to finance films or TV series. Otherwise, it is a system without a product that has to be financed by other markets,” stated Marco Chimenz, president, European Producers Club, who criticised the proposal of the European Commission: “Consumers are in the habit of watching things whenever they want on the internet. Broadcasters want to make sure that their audience can also find their product there. But if catch-up is expanded geographically, which the country-of-origin principle would allow, they can do cross-border dissemination of certain products, even if they have cleared the rights only in their home country. If they do so, they can extend catch-up to a point where it collides with other forms of exhibition,” sums up Chimenz. “The European Producers Club had a letter signed by about 400 entities; almost the whole industry is against this country-of-origin principle, except for some public broadcasters, which have a different kind of motivation.”
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