Earlier in this blog I talked about the big devil of piracy and its effects to the film industry including indie films and documentaries. The estimations of lost revenues vary significantly and there is no single way of calculating the effect of piracy. In the statistics I presented in the earlier post, lost revenues were predicated on the assumption that 5 % of the people who illegally downloaded the film would have bought the film at a price of 3 US dollars.
Without further analysing this estimation, let’s for the sake of argument accept it. I think it’s fair to say that yes, some people would have bought the film for 3 dollars. After all, it’s less than a price for a good soy latte at the local Starbucks. Not bad.
The issue therefore is, why didn’t these people purchase the film for 3 dollars? Whenever I discuss piracy and downloading with my friends, the most common reason for downloading films is that the films are not available anywhere else.
Small indie films and docs don’t often make their ways to the screens of small English cities with. With the current window system in place, films are not available for people living in rural areas at the time of their highest press coverage. Expensive marketing campaigns heat up around the theatrical release; filmmakers give interviews and trailers travel the internet and potential audiences get excited. We hear about the films, but we can’t see them anywhere as they are not available in smaller cities. Except by illegal downloading. This scenario will spark piracy and costs loss in revenues.
Traditionally the window system is based on an idea to exploit rights in a certain market before making the film available on other markets. The system is in place to maximise the revenues for one rights category before moving onto the next.
But does this make any sense anymore with international online audiences desperately waiting to see the film?
Like Kevin Spacey said in his famous speech at the Edinburgh Film Festival already in 2013, we as an industry need to give the viewer what they want, when they want it in whatever shape or form they want it to be able to cut piracy. Piracy is online, the people are online, the films need to be online as soon as possible, easily accessible to be able to compete with illegal downloading.
For distribution that means cutting back the leeway between theatrical window and on demand window and putting one’s film online as soon as possible. Possibly simultaneously or even before the theatrical release. The so called day and date release model (in which the film is release on the same day and date on multiple platforms, traditionally on DVD) has become increasingly popular in the VOD world. The aim is to use the momentum of the theatrical release’s publicity campaigns for ancillary rights too. US distributor Magnolia has even pioneered in releasing their films on VOD prior to their theatrical release to be able to cumulate word of mouth around the film to boost the theatrical release.
Magnolia's High-Rise is made available on VOD before its theatrical release in May 13th
Sounds like a good plan. Especially good for all rights deals and DIY distribution (practically the same as an all rights deal, but the rights remain with the filmmaker). If all rights remain at one party, surely they can allow the overlap of windows as all the revenues are pooring to the same basket.
But how can the loosening of the window system work in the much praised hybrid model, where different parties control different rights?
I was able to get a hold of Brian Newman from from Subgenre consulting company to clarify the role of windows for the different deals.
Yes, with a complete self distribution deal it's up to you, for the most part. All rights deals usually have shorter windows but keep some window, mainly because in either case, and with Hybrid, many theatre owners won't allow you to show a film online less than 60 days after your theatrical and for some theatres 90 days.
Brian stressed that it is the theatre owners that are the main ones forcing the issue of windows because they believe that they will lose money with shorter windows.
That's why windows have historically existed, but I believe that today, a small percentage of consumers like to go to the theatre but would skip it to watch it at home if they could. I think many more like to watch films at the theatre and wouldn't skip it, and a larger portion don't like going to the theatre and won't go anyway.
For me, a lot of that second group will just forget to ever watch the movie, so it's a greater revenue loss. But the theatre owners are forcing the issue, and until digital and VOD revenues grow bigger, they win.
To my question on how to tackle the issue in the hybrid model, Brian contents to finding a happy middle ground.
For a hybrid distribution, you just try to negotiate the shortest windows possible and live in some, hopefully happy, middle ground. The goal becomes a mix of maximising revenue, opening up new revenue streams (windows) as fast as possible, and keeping your hybrid partners happy.