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SXSW Film Festival Attendees Say the Disc Still Spins Profit

18 Mar, 2009 By: Stephanie Prange

AUSTIN, Texas — Filmmakers at the South by Southwest Film Festival in Austin, Texas, this month may have been looking to the Internet as a way to bypass traditional distribution, but panelists were quick to dispel any notion of its profitability.

“We make a tremendous amount more money on DVD sales,” said filmmaker Morgan Spurlock (Super Size Me) on the Future of the DVD and Digital Distribution panel.

He said filmmakers need a “reality check” about Internet distribution, which he said may not take off for five more years.

He noted Web profit is illusory.

“The reason numbers aren’t released is because the numbers are pathetic,” he said.

New Video president Steve Savage echoed the sentiment, saying the disc is still important to his company’s business.

Originally, New Video came up with a vision of “DVD plus digital” but then inverted it, recognizing that “digital will drive it, and we’re going to make money on the DVD.”

Savage said filmmakers shouldn’t abandon looking for a DVD deal.

“It’s been said that there are no DVD deals out there, and that’s not true,” he said.

Other panelists said the combination of streaming and DVD sales could spur profit.

Rick Allen, CEO of Snag Films, said the disc “buy now” option with streaming worked well, and that DVD conversion rates are higher on lesser-known films.

Director Gary Hustwit (Objectified) noted that Blu-ray licensing was not much more expensive than DVD, and all the panelists seemed to agree that digital copies on discs would increase in the future.

On another distribution panel, The State of Distribution: What You Need to Know, studios and other distributors noted that one size doesn’t fit all films.

Keith Leopard of Blockbuster Entertainment, which has struck deals with various cable companies, noted that the No. 1 rental dealer used to discard titles that had played on TV or video-on-demand, but that now Blockbuster looks at other distribution avenues as marketing.

“VOD helps with the presence of a film,” he said. “We are really trying to work together [with VOD companies].”

Michael Barker, president of Sony Pictures Classics, said filmmakers must pay attention to the bottom line and pay attention to the question of whether a film will make money for a distributor.

“It has to do with price points,” he said. “The costs are still enormous. If we are going to have an ongoing film business, we must pay attention to price points.

“Piracy is a disaster. [The movie business] is trying to stave off what happened to the music business.”

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