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VOD on Everyone’s Mind at American Film Market

5 Nov, 2012 By: Chris Tribbey

SANTA MONICA, Calif. — During a discussion about the state of video-on-demand, especially the challenges in marketing VOD to consumers, Dish Network’s Bruce Eisen lamented how much simpler it was when the only options were VHS and DVD.

“Put a picture of a girl in a bikini on the cover, with an explosion behind her, and it sold,” the VP of online content development and strategy for Dish said Nov. 5, before a packed audience at the annual American Film Market conference.

The comment earned a few laughs, but he was only half joking. VOD doesn’t work the same way as physical media, he stressed. Nobody’s ever made a killing on a VOD title by trying to fool the consumer with false advertising or a cheap knock-off to ride the coattails of a popular release, he and other panelists agreed.

“You have to work harder,” Eisen said. “We’ll take it, to distribute, but how do you get consumers to rent it?”

More than a dozen years since VOD became widely available to the public, content owners and VOD distributors are still trying to answer that question. Tom Adams, director and principal analyst for research firm Screen Digest, noted that electronic spending still accounts for only about 15% of all video content purchases, despite VOD having far less overhead than disc and no pesky First Sale Doctrine that’s attached to physical media. A VOD title is never owned by the renter, and only lasts for about 48 hours.

“It’s a balancing act,” Eisen said. “[VOD] costs more [to rent], so everyone in the food chain makes more. On the other hand, it all goes on the monthly bill. There might be sticker shock at the end of the month.”

Adams can back that up that assessment with real consumer feedback. His firm regularly surveys viewers who have no problem renting or buying dozens of discs a month, “but get really bummed when their cable bill is $4 [more than usual].”

Part of the challenge facing VOD is consumer habit. Adams said that a consumer seeing thousands of discs sitting right in front of him at a store is more likely to pull out the wallet. There’s far less impulse buying with VOD, panelists agreed.

“This is very precious shelf space,” said Jason Janego, co-president of Radius-TWC, said of VOD, especially pre-theatrical or day-and-date VOD. Janego and Radius-TWC co-president Tom Quinn were hired away from Magnolia Pictures by The Weinstein Co. in September 2011, with the express purpose of releasing films under the label on VOD before theatrical. The pair was key in helping launch Magnolia’s “Ultra VOD” strategy, which premieres films via VOD, and then lowers the price when titles hit theaters and home video.

Janego said content owners need to make sure their pre-theatrical VOD offerings are at a “worthy price point.” “Ultimately we all win if the consumer has a positive experience. It means they’ll be back,” he said.

Pre-theatrical and day-and-date VOD may be an “unforgiving” platform,” Janego said, but it can also be a rewarding one. The Los Angeles Times reported Nov. 1 that the Roadside Attractions and Lionsgate film Arbitrage pulled in more than $11 million in VOD sales, compared to $7.3 million in theaters. Radius-TWC released the Kirsten Dunst comedy Bachelorette on iTunes weeks before it hit theaters, and reportedly pulled in $7 million on VOD, compared with $448,000 in theaters.

A pre-theatrical, premium VOD offering of $30 is always going to be less than the $100-plus tickets, food and a babysitter will cost for a Friday night out at the theater, noted David Spiegelman, president of domestic and digital distribution for Relativity Media.

Image Entertainment will be one of the next companies to aim for a big pre-theatrical VOD payday, landing the domestic rights to the Antonio Banderas (The Mask of Zorro, Once Upon a Time in Mexico) film Day of the Falcon, a $40 million production helmed by Oscar-winning director Jean-Jacques Annaud.

Image’s chief acquisition officer, Bill Bromiley, said the film would see a VOD release before theatrical in early 2013.

“This is a terrific film for Image,” he said. “Day of the Falcon has an amazing cast, an award-winning director and terrific visuals. It is truly an epic film and we are proud to be releasing it here in the U.S.”

VOD is definitely an independents’ game, said Robert Beaumont, president of Lightning Entertainment. His company found VOD success with its Fangoria FrightFest line-up of films, pairing the movies with free video content with the filmmakers to draw people in. The featured films had fewer outlets for success outside of VOD, he said.

Adams pointed out at VOD in general has never been driven by major theatrical releases. He pointed all the way back to 2002 and 2003, when the No. 1 VOD titles for the year were, respectively, Shallow Hal and Just Married.

But problems persist for VOD in general, and Eisen can pinpoint one: information for the consumer. He said an online search for an upcoming calendar of disc releases will yield hundreds of results. The same search for upcoming VOD produces almost nothing.

“For me it shows how far we have to go as a VOD industry,” he said. “Why doesn’t that exist yet?”

Still recent gains by aggressively windowed VOD and the promise of more Internet-connected HDTVs in living rooms have those in the VOD realm optimistic.

Even though VOD has been around longer than a decade, “I really feel we’re at the beginning of video-on-demand,” said Amy Friedlander Hoffman, president of content consulting firm Priority Digital Media.

“The one rule we have [for VOD] is there are no rules,” Spiegelman added. “We’re always playing with windows. … The most important thing is to look at the film and decide what works best for that film. You want to make sure that film is going to the proper audience.”

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