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Video On Demand

Overview of online opportunities and what is on the table

In 2013 there were over 3000 VOD platforms identified as being established in Europe and operating in at least one European country. On top of this there is vast number of international VOD service providers operating in Europe, including the biggest US based operators like Netflix, Google Play Movies and iTunes.

In other words, the VOD market is crowded and opportunities are endless.

Still 73 % of the video market remains in physical rather than digital format, but the market share for digital is growing every year. According to BVA Yearbook 2015, the spend in digital ownership grew 25 % in 2014.

All in all the video market is doing great in business and it is exceeding theatrical revenues big time.

According to Roderick Smith’s analyses of the UK film market, video market is now generating more than double the £1.058 billion revenues generated by the theatrical market in 2015 (BFI, 2015). In 2014 the video market generated £2,24 billion in revenues.

As the theatrical revenues for indie films have grown smaller, and the rise of digital ownership has grown, perhaps VOD can be the answer to fill the gap of dropping revenues in other formats.

For filmmakers considering VOD, the variety of different online platforms means more variety in the digital rights that need to be considered when drafting ones distribution strategy.

The main categories of rights include:

TVOD - Transactional Video on Demand are rights which are monetized by transaction, either in the form of a purchase or one time rental. Providers such as iTunes, BSkyB’s Skystore, Amazon Prime and Blinkbox are just a few service providers. According to Jon Reiss TVOD deals are usually done on revenue share (e.g. 50-50 or 60-40) without an upfront advances and are non-exlusive. Windows are usually 2-4 months for new releases and 6-12 months for library items. Buyers of TVOD rights usually prefer recognized titles, such as festival winners, as customers tend to be lured to purchase films from familiar directors, actors and so on. Therefore, for small scale indie films, the following models may be more attractive than TVOD.

SVOD - Subscription Video on Demand services are platforms which stream content through an ‘all you can eat’ viewing model. At the moment SVOD happens to be one of the most lucrative commercial models. SVOD platforms offer exclusive deals (HBO, Viasat, Canal+ etc.) and non-exclusive deals (Netflix, Amazon Prime,, Filmon). Most commonly SVOD rights are sold as flat-fee.

AVOD - Ad-supported Video on Demand services are free for viewers, but incorporate ads either pre/during/post the film or operate as add or sponsor-supported platforms in other ways. Service providers include, Youtube, Hulu and various smaller nonfiction specified sites for documentaries.

As platforms are endless Jon Reiss stresses that multiple non-exlusive smaller VOD deals, especially for niche films, will often generate more revenue than one exclusive deal. Pertti Veijalainen, the CEO of Illume Films, a documentary production company, agrees. He stresses that the traditional exclusive path with one main distributors is only taken in case it would tremendously save the production company time and effort. If that is not the case, then often the production company will handle VOD rights to smaller platforms themselves.

When it comes to securing VOD deals for niche films, social media marketing can really be a game changer. The online is filled with small or mid-size online viewing platforms that just like the filmmakers are looking for to expand and connect with new audiences. If the filmmaker can use their own audience base to direct them to the secured VOD platforms, their films starts to seem more lucrative to the platforms in question to sign the deal.

Take for example the Australian/Dutch documentary Surfing and Sharks (2011) by a first time filmmaker Julian Watson. The film put great effort into making a social media and Twitter campaign around the film’s themes to successfully gather an audience of 50 K even before the film came out. Once taken on by an VOD distributor that audience base will drive clicks and views to the channel to which it was licensed, making it a much more appealing option than a niche festival winner with nothing but a title.

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