Bringing VOD to the Dinner Table.

VOD won’t kill the theatrical release, but it may just help save independent filmmaking.

For the last decade, VOD has been the bastard cousin of theatrical and DVD distribution. Before the much-buzzed about HDNet day-and-date release of Soderbergh’s Bubble, the idea of on-demand television viewing was associated primarily with porn and boxing. Initially, the Bubble experiment put a bad aftertaste in the mouths of most theater owners and directors alike. Theater owners felt that a simultaneous release on pay-per-view and in theaters would be bad for their business, eroding revenues and further commoditizing the theatrical experience. Directors, blinded by the bright lights and spurious prestige of a theatrical release, saw VOD releases as dirty; a dumping ground for second-rate films from hack filmmakers.  No one took it seriously as a viable distribution outlet capable of wide viewership and a real rate of return.

Fast forward to 2011. VOD hasn’t completely lost its sleazy finish, but it getting close.  It’s picked up a number of supporters in the indie distribution world, and it may be their open armed embrace of the technology that has led to their survival.   The two most well known companies, Magnolia Pictures and IFC Entertainment, have partnerships with cable providers like Comcast allowing them to offer movies on branded V.O.D. channels on the same day they were released in theaters.  These companies believe that this strategy gives films a wider audience (and as a result, more opportunity for profit) than it would have with just a theatrical and DVD release. According to Geoff Gilmore, chief creative officer of Tribeca Enterprises: “Independent films are failing in the theatrical box office all over America right now — 80 per cent of them don’t make $100,000,” he said. “We have to find new ways of marketing this work that involves a range of different things that are not just the traditional theatrical system.”

This past year, Magnolia Pictures took things even further with its release of All Good Things.  Using what has been termed an Ultra VOD strategy; the film played on VOD first, and then rolled into theaters.  While the $20 million Ryan Gosling/Kristen Dunst thriller only made a paltry $644,535 theatrically worldwide, it performed spectacularly on V.O.D., selling over $5 million in rentals priced at about $10.99. Even some of the more mainstream “art house” distribs have taken note. Seven months ago, Focus Features launched its own VOD label, Focus World.  If a more conservative operation such as this is willing to take a chance it’s probably because they see some real potential to diversify their offerings with minimal risk.

Continuing this trend, Filmmaker magazine has started a VOD calendar that curates the top independent VOD releases each month.

So what does this mean?  Well, if you’re a progressive filmmaker not wedded to a traditional release strategy, it means you now have more opportunity to make money doing what you love to do.   The days of getting a wide theatrical release and a $20 million P&A commitment are over.  But imagine any Comcast or Verizon FIOs subscriber being just one click away (and perhaps $10.99) from your film. It’s much easier to sell a customer on an impulse purchase from the safety of their couch.  They don’t have to go anywhere.  And as more and more people get comfortable making purchases via their internet-enabled tv, potential profit margins will grow and grow.

Now I’m not suggesting that filmmaking should be all about the bottom line.  But it’s naïve to think that quality non-mainstream films will continue to get funded if they can’t offer any potential for profit. Art is a business just like any other and to be apathetic to that fact is just plain dumb. As technology continues to make the home viewing environment both more theatrical and more connected, the opportunity for a film to reach its audience at the quality in which it was intended is becoming a greater reality.

Content vs. Context - who's king?

The tagline “content is king” has been shouted from the rooftops by every internet entrepreneur from a prescient Bill Gates in ‘96 to desperate digital content houses in today’s saturated market trying to justify their product. For years, content was supposed to be the great white hype of the internet, providing a rich and fertile soil for publishers and media moguls to raise huge profits by way of hungry advertisers looking for new venues to reach customers. Corporations like Microsoft and AOL saw that it wasn’t enough to own the hose or the portal, they needed to own the content to send through it.  Some believed a certain level of quality was necessary (hence the birth of video portals like Hulu) while others believed the answer just came down to quantity (Google’s purchase of Youtube).

However, the best and most trying characteristic about the internet is its inherent democracy. Sure, you can own SOME content, but you can’t own it all.  Content went from being relatively scarce to being ubiquitous. Bloggers make content. Flickr photographers make content. Facebook posts are content. Tumblr publishers make content.  It turns out content isn’t king because it isn't scarce.   With over 234 million websites, over 133 million blogs, and over 64 million tweets per day, content is everywhere, it's overwhelming, and it's gone from quality to shitty white noise.

For most consumers like me, this “content din” has reached such a crescendo that I’ve lost my faith in Search. Yes, I said it. Search, which was once critical for helping me find content that was interesting and relevant, now pulls up results that just seem, well, too obtuse.  And I find navigating content dumping grounds like Youtube too exhausting (that’s not to say I don’t view embedded or shared youtube videos.  I just don’t search the site).

So what are people like me doing on the internet these days if we’re not actively searching for new media and content?  We know from networking giant Cisco Systems that the amount of Internet traffic will quadruple by 2015, so it’s not that people have unplugged.  It’s just that there has been a paradigm shift in the way internet users find and consume their media. Rather than go out and look for media, we’re waiting for the media to come to us.

In a nutshell: The period of exploration on the internet is over.  We’ve moved into a period of contextual discovery.  Put aptly by Ashkan Karbasfrooshan in TechCrunch: “The context—Facebook, Twitter, email—in which people are introduced to media and consume it is becoming more important than the content itself.  Content is no longer king, context is.”

Using myself as an example—I no longer find myself brazenly entering random search strings into Google, hoping relevant and interesting links pop up. I rarely even visit curated niche sites like Funny or Die. I find that I now wait and see what my various networks—from Facebook to Digg to LinkedIn to Flixster--bring me first. Each of these provides me with socially contextual content about things I care about.  It’s how I find the best videos to watch, articles to read, and products to purchase.

What that means for independent web content producers, I’m still not quite sure. This sentiment of search malaise will be pervasive and problematic for smaller content publishers who have seen a marked decline in ad revenue. Without the considerable resources of portals managed by IAC, NBC, or AOL it’s getting harder and harder for them to be found and attract advertisers. Saying “social media is the answer” is like saying the sky is blue.  So what?  I can’t remember the last time someone recommended that I watch a web series. Social media means nothing if people aren’t sharing and I don’t think anyone (not even Michael Eisner) has figured out how to push the contextual discovery of these products.  Maybe the key is creating incentives and reinforcements, or creating more links back to the content in the real world via live events or merchandising.   But continuing to assert that having content—regardless of whether its quality, fills a niche, or is in mass—is enough will lead to continued disappointment in viewership.