THE OBENSON REPORT

Covering Cinema From All Across The African Diaspora

Time Warner Going Day-And-Date For VOD

It's a start, I suppose... I expect the other studios to eventually follow TW's lead.

I think it's only a matter of time before the theatrical experience loses even more of its luster and every film will see a simultaneous multi-platform release - in theatres, on DVD, and VOD, both over cable TV as well as the Internet, for download onto portable handheld devices, all at the same time, instead of the current staggered method, giving audiences an immediate selection of film-watching options.

From The Hollywood Reporter:

NEW YORK -- Time Warner will this year make available all its DVD film titles on VOD on a day-and-date basis, CEO Jeff Bewkes said Wednesday.

With the first mover advantage among studios, TW expects to "capture a disproportionate VOD share," he said on the conglomerate's first-quarter earnings call. The day-and-date VOD decision comes after extensive trials with Comcast and TW Cable last year, which Bewkes -- who has been the industry's biggest champion of the day-and-date model -- said proved the high margins and positive business effects of this release strategy. For one, DVD sell-through was up a bit in the trials. Also, margins from day-and-date VOD run at 60%-70%, compared with 20%-30% for physical DVD rentals, Bewkes said. "It's very good for the film companies," the TW CEO said.

It is now up to TW and cable operators to work out specific day-and-date deal arrangements before consumers will get to enjoy the benefits. The timing of the first full launches is unclear for now.

Handango Inc.

8 comments:

  1. Qadree said...
     

    Unless a better marketing strategy comes along, the theatrical release will still be placed ahead of everything else in my opinion.

    While doing research for some of the things I'm going to discuss on my blog I came across an article from a 1957 issue of Fortune magazine in which Douglas Shearer, at M.G.M., talks about sending movies to people by mail like magazine publishers. The only problem at the time was the lack of a cheap medium on which to distribute the movies. That was over 50 years ago and they were already thinking about the Netflix model. Even with a cheap medium available the industry moves slow and resists change, just look at Blockbuster.

    It's pretty much become common knowledge that the theatrical release itself is almost always a money loser no matter how many people go to see it. It just serves as an engine that drives the revenue streams that exist within the conglomerates after the theatrical release has done it's work. One of those streams is the output deals they have with cable and network television (that they usually own anyway), so it will take some time to restructure the distribution and marketing so as not to cannibalize or shut off those revenue streams that rely on the marketing that surrounds the theatrical release.

  2. UK Black Chick aka Wendy said...
     

    Actually, it seems Hollywood is planning to revamp the theatrical experience by looking back to the future...

    I've read a few articles in the last couple of months about the return of 3D to cinemas with 'a new bred of three-dimenstion films set to hit US cinemas next year.'

    Here's a link to one of the articles in which Jeffrey Katzenberg of Dreamworks waxes lyrical about "the greatest innovation ... in the movie business since the advent of colour 70 years ago."

    http://film.guardian.co.uk/news/story/0,,2264536,00.html

  3. Qadree said...
     

    You can only do certain types of films in 3d, generally animated films geared toward children. They always hype this sort of thing so that they can milk it for what it's worth. I remember when HD digital projection was supposed to save of the industry, everyone was talking about it, but most theaters still aren't equipped for it.

    Exhibitors want solid commitment from studios before they change anything and studios want a commitment from the exhibitors so that they don't get stuck making films that can only be shown in a handful of theaters. Collusion is illegal, but that's exactly what ends up happening when they all decide to embrace a certain format simultaneously. We'll just have to wait and see how VOD fits into all of this.

  4. UK Black Chick aka Wendy said...
     

    @ qadree: According to another article on 3D from the same newspaper,

    "Spielberg and Jackson have committed to three live-action adaptations of Hergé's comic book detective series Tintin, while Jackson has spoken of converting his Lord of the Rings trilogy into 3D. And this summer will see the release of Journey to the Center of the Earth 3D, a $50m-60m family romp starring Brendan Fraser based on Jules Verne's classic tale of exploration."

    So not just animation and not just aimed at kids (if Lord of The Rings is anything to go by).

    Sounds to me like Hollywood is desperate revive cinema attendence and they're staking their bets on 3D... VOD...

    Source: http://film.guardian.co.uk/features/featurepages/0,,2272481,00.html

  5. UK Black Chick aka Wendy said...
     

    Sorry, the rest of that source for that last article is:

    /0,,2272481,00.html

  6. The Obenson Report said...
     

    @ Qadree and Wendy - I doubt 3-D cinema will revive theatrical box office, and I certainly hope that studio heads aren't relying on it to do so! That will be quite a gamble that I don't think will pay off. However, I applaud the investment in digital technology. It's a wise move, and was inevitable. Evolve or die is the name of the game.

    As has already been pointed out, theatrical releases are pretty much expensive marketing campaigns for ancillary distribution (DVD notably); although what was once considered ancillary is now starting to become primary.

    The Internet changed everything. It has essentially forced the studios to adjust to consumer habits. And that's why I think VOD has legs and will eventually become the dominant way in which content is delivered to those who want it, whether it's via cable TV channels, or the Internet. It's already becoming the standard in the music industry - search, point, click, download, listen, the end! Granted listening to music and watching a film are quite different experiences, engaging variant senses, but there's a demand for the same kind of immediacy and convenience we already enjoy in commerce within the music industry.

    There's a lot of competition for eyeballs, compared to 20 years ago - the Internet and all it provides, which one can't really quantify anymore, and the video game industry boom notably, have challenged the film industry. Content providers have to work harder to attract as many eyeballs as possible, so it means finding profitable ways to give those eyeballs what they want, when they want it, if you want to survive in the marketplace.

    It may not happen anytime soon, but I think it's inevitable - essentially presenting the consumer with options as to how they want to acquire the content they crave. However, I don't think theatrical releasing will ever go away. There's a demand for that kind of experience as well. So maybe it isn't that one kind of experience will replace another, but rather that we'll simply be presented with more options. It's like DV versus celluloid. One doesn't necessarily replace the other. Rather, the addition of one increases a filmmaker's options.

    I can imagine a time when a film is released on all channels simultaneously, and audiences are given choices as to how they want to watch the film. It's all about convenience and immediacy. We want what we want when we want it, so give it to us, otherwise we'll find ways to get it that you probably will not like, and may hurt your bottom-line.

    The industry will obviously do what makes the most fiscal sense. It's still about profit and pleasing shareholders after all. They also have to adjust to consumer habits and demand, otherwise they'll suffer whatever the consequences are, in the long term. So, whoever finds a way to balance the two, and stay ahead of trends, or even create them, could come out looking like a genius down the road. It might mean a gradual restructuring of the industry altogether, but I think that's already happening, bit by bit.

    I do hope that the industry does not invest the bulk of its resources in coming up with the perfect solution to distribution that it neglects the most important part, which is the creation of good content. They can develop the most sophisticated, diverse system of distribution, but if the content sucks, as it's been for some time now, none of this will matter.

  7. Qadree said...
     

    Wendy, I wasn't saying "strictly" animation, but generally it will be animated or effects driven and it will rarely be rated R and never NC-17 for a theatrical release.

    The success of "Lord of the Rings" was hinged largely upon it's appeal to children. That film had more children's products tied to it than than your average Disney picture. When Hollywood says "family", that usually means, kids, make your parents take you to see this, and don't forget to buy the toys, the video game, the happy meal, etc.

    I doubt if you're going to see "Killer of Sheep" or any other serious drama in 3D. If you remember the original wave of 3d films, the films that weren't effects driven tried to compete by having these crazy shots where actors reach toward the camera or create other set-ups that were totally artificial. Watching people sit on a couch talking or going through other normal interactions is not very interesting in 3D.

    Tambay, I agree with you, but what I'm really looking at right now is the implication for independents. The situation with the internet is playing the same way as all previous deviations from the Hollywood standard. Tons of litigation, consolidation, and plenty of collusion. In the end the major studios want all roads to lead to them so I'm hesitant to think that the technology has democratized the market or leveled the playing field any. How many independents can get a VOD deal with Apple, and will you make any money if you do?

    There is a window that is open right now for independents on the web, but who knows how long that window will be open before the studios begin to consolidate that space and you have to go through them to make any serious progress.

  8. The Obenson Report said...
     

    I certainly hope that Net Neutrality will always be the standard, assuming that's what you're referring to when you mention studios consolidating Internet space.

    True - I doubt Apple/iTunes will open its doors to indie filmmakers (certainly not those like myself without any real backing - whether monetary or in name only).

    I could see them eventually setting up a kind of separate marketplace, like Amazon did, allowing any filmmaker to make their films available on iTunes, for a fee and/or some percentage of rental/sales - something similar to what they already do with podcasts - essentially an aggregator. But all the marketing will be up to the filmmaker.

    However, I'd like to think that we don't really need iTunes and others like it. Obviously it would make life so much easier if we had their support. But we've all heard of indie filmmakers who've utilized the web to build audiences for their projects, marketing and selling directly to those interested, completely bypassing the middlemen, and keeping most of the profit. Obviously it means working damn hard and coming up with the right marketing strategy that attracts eyeballs to your film's website, wherever it's housed. That's the difficult/tricky part.

    It's always going to be difficult for indies, regardless of the platform... but knowing that others have been successful with unconventional methods gives one some hope. Certainly if the studios decide to affect the freedom and opportunity that the Internet provides us, especially if many of us are succesful without their backing, then we'll have to work even harder... somehow... although it's anyone's guess what that would mean for us.

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