The Forest Through the Trees: The current (Q1 2013) landscape of digital film & video distribution
I’ve seen horrors… horrors that you’ve seen.
– Apocalypse Now
***
WITH Sundance deep in our rearview, Berlin having just recently wrapped and SXSW around the corner, I feel like now is the opportune time to commit to (digital) paper an overview of the digital video distribution landscape – if nothing else, as a time-saver from having to explain the following to prospective clients—at least for the time being.
Q1 2013 is nearing its end and it’s safe to say that the digital marketplace is not only well-established but, so long as your taking a populist view of independent and specialty film & video, the primary marketplace for distribution. With that preface, I’d like to touch on a few broad ‘observations’ the industry has made (and widely reported on, blogged about, etc.) – and then reveal some realities about them.
1.) Packaged media is not only declining slower than most ‘experts’ suggested it would, but rather alive and well.
Strange as it seems, DVDs and Blu-Rays are still selling: around the holidays, around release dates, and in both foreign and domestic markets.
2.) The SVOD market is heating up.
Amazon Video is finally alive and kicking Redbox Instant is quickly expanding and Verizon and Liberty Media/Virgin Entertainment are still likely to bow SVOD services and, most importantly, Netflix is healthy as ever. Furthermore, these competitors have been shown to historically outbid each other for exclusivity (think ‘Mad Men’ on Netflix, ‘Community’ on Hulu, ‘Downton Abbey’ on AmazonVideo, ‘Seinfeld’ on Crackle).
3.) The EST (Electronic sell-through—which is really digital VOD) continues to offer a great transactional outlet for independent content creators of all shapes and sizes.
In short – little has really changed here. The runaway success of this area of the market in the past few years, though, means rising above the noise is tougher than ever.
***
Sadly, there’s much more than meets the eye here. The very fact that the film/video market tends ignore increasing supply, lackluster demand and an increasingly crowded marketplace shows in the reality if not the “news” that covers a few spotlights — In short, one might do well to remove those rose-colored glasses.
Packaged Media –
The rub, unfortunately, is that most sales continue to be in two areas – studio hits (think tentpole properties like ‘Marvel Comics’ films and ‘The Hunger Games’) and niche areas like Children’s entertainment, Fitness, Urban, etc. In short – make no mistake: DVD and Blu-Ray are alive and well, but not as in a way that concerns you, the independent filmmaker.
This is especially true for many documentaries (particularly socially-conscious docs) which could potentially leverage their value in both the educational and non-theatrical markets. Packaged media sales offer a stable, often legal alternative while embargoing (or even eliminating) this medium as part of your distribution strategy could be a positive move in ensuring public screenings and well-funded educational institutions pay an appropriate rate for the public dissemination of your film(s).
SVOD-
Theoretically, increased competition means bidding for the best, exclusive content. In practice, though, this bidding happens primarily for top-tier television series and/or historical content with a loyal, ‘cult’ following. There hasn’t yet been a move towards locking up exclusive rights for individual films, nor has viewing of this type of content increased – in fact, more than ever SVOD services are being used for repurposed Television content and, moving forward, most of these services have shown a proclivity towards creating original serial content (‘BattleGround’ for Hulu, ‘House of Cards’ for Netflix, Various pilots for AmazonVideo) rather than focus on films.
EST/Digital VOD-
The most tried-and-true outlet for selling indie content is still iTunes, dominating digital VOD sales. Since they don’t require any sort of exclusivity, though, there are actually multiple options/storefronts you can use for digital fulfillment – iTunes, Amazon VOD, VH(X), (ETC.). Like the above, though, there’s a rub: with flexibility, and with a proven track-record as a content destination, it’s harder than ever to rise above the noise. The film industry seems to have a problem ignoring the main tenant of capitalism and with ~50k movies being produced each year and the number of audience members either holding steady or declining (due to other distractions) it’s easy to see why there’s a broken system.
Every year DIY digital sales platforms pop up with the promise they’re going to “fix the broken system” by allowing filmmaker to sell direct to audiences but the fail to recognize (or acknowledge) that lack of sales access hasn’t been a barrier for years. What remains the barrier is lack of interest.
Finding meaning in the mess-
So, I’d be remiss if I didn’t acknowledge that the above is pretty depressing. It shouldn’t be, though—it’s just reality. And if you position yourself correctly, it isn’t depressing at all—and understanding the landscape can be empowering so long as you plan accordingly.
There are a few things worth mentioning about all of the above: If people want to see your film, none of the scary issues challenging the above outlets should be worrisome. Case in point:
Packaged media is just a method of watching a film. Period. It doesn’t matter if this is no longer a healthy market, other than taking note so you don’t do something foolish like order a 1,000 DVDs of your mid-tier premiered festival drama thinking that nationwide brick-and-mortar retailers will place them on shelves and people will buy them based on the art and description. It’s not going to happen, period, unless you have a well-known film or a niche piece of content.
SVOD services will license your content for a pretty penny – if there’s interest. SVOD works pretty much like broadcast: in short, if you can prove to them – usually by notability via a theatrical run or critical acclaim, sometimes by metrics of success/interest like sales figures and fans, respectively – that people find the content worthwhile, they have every reason to make an offer to license your film, the dollar amount being based on what you can “prove” it’s worth to their users. Just try putting yourself in their shoes and you can see that this isn’t rocket science
EST/Digital VOD finds itself in a difficult position. There isn’t an upside (for filmmakers and other video content creators) to the increased volume of content and increased competition, except that maybe some people that were on the fence about purchasing content this way will be less reluctant to do so. Other than that, though, the state of EST/Digital VOD outlets underscores the larger issue worth pounding into the head of every filmmaker/producer/content creator: If people want to see your content, they’ll buy it, dammit. Think of it like this: iTunes is your new CreateSpace. People won’t buy things they stumble across, but you can make it easier for them to buy it by signing up—now you just have to motivate them to do so.
The takeaway, then, is quite simple: If financial success is the key measure of whether or not your film is “successful” you can more or less assure that there are a few key elements to giving yourself a strong shot at that kind of success: Make a great film and from soup-to-nuts (i.e. from development to 1yr.+ after distribution begins) make sure people know about it. Engage, engage, engage. Promote. Market. Promote. Market.
Both creating and promoting great content require hard work and know-how, and I’m not about to try telling you how to do either. What I can say is this: Once you do, the other key to success is managing your rights carefully and distributing strategically, both of which take knowing the landscape to do – so don’t screw up the long game.