A Distribution Revolution

At the Nostradamus seminar on January 31st, 2014 we hosted a panel on the changing distribution of film and TV. Rikke Ennis (TrustNordisk), Michael Gubbins (Sampomedia), Jérôme Paillard (Cannes Film Market) and Bengt Toll (senior advisor, Göteborg Film Festival) had a spirited discussion – watch the full video below or scroll down to read highlights!

Panel Highlights

Michael Gubbins, Sampomedia: We don’t have the details on these audiences so we live on myths. Quite often we find out that young people don’t do what we think they do. Or that ‘people don’t like 3D’ – actually Gravity had a much older demographic and did very well.

Jérome Paillard, Cannes Film Market: Going to a cinema is really an event. We have to consider how farther festivals are very important for that experience, for the public. We see more and more festivals everywhere. And sometimes it will be the only chance where a film will be in a real theatre.

Michael Gubbins, Sampomedia: When I am funding films, each film is treated – when they come to me for film funds –as a separate thing. And we throw away things we’re calling failures, we hide them away like crazy relatives in the attic… We don’t systematically gather up the data and the knowledge that would allow us to do it better the next time. So we have a myth and a problem about the way we understand audiences. We have a disconnection between the audiences and the business, and we have an idea I think about our businesses as if it was a natural state, and not something that grew out of… a way of moving physical goods about – moving 35 mm prints about.

Rikke Ennis, Trust Nordisk: Typical art house films done by first or second time directors, they would really have had a market out there a few years ago. They don’t anymore, because the distributors are so pressured so they go for bigger films, bigger budgets, directors with a track record, and so forth. And you could say, the windows chosen for those specific films are very very conservative. I have just been sitting in a group in Denmark, going for the next film political agreement in Denmark as well… it seems like we’re talking about the same thing that we did five years ago.

Still the four month window is probably the one that we fight most about. But for the first time, which I think was interesting, we invited telcos and new partners into this small group. And they were looking at this group as dinosaurs. They were just like: ”Jesus Christ, what just happened?”

The biggest frustration with producers right now is the fact that you have a lack of money … so much content out there and so few financiers. … When we finance films we have to think at some point whether we should go to a player like Netflix to sell, let’s say 2-3 countries first, and actually get money for the financing of the film there. The problem is, once [it’s] out there, with VPN …you can actually see the film everywhere. Then you [probably] destroy your own market. So it’s a little bit, like we say in Denmark, ‘peeing your pants’. It’s very hot in the beginning but then it becomes cold.

We did it with elder titles, and that’s a great business case, but what we’re talking about here is new films for international release. Why does that VOD and premium VOD model work in the US and the UK?

Michael Gubbins: I think we underestimate the impact of price right now. I’ve just done a piece of research, which will be made publicly available as well… about focus groups, what people think about cinema and VOD… A Netflix account right now, if you live in a house of six people… piracy seems like a lot of effort for 60p a week or whatever it is for a person in that house.

In my opinion we’re handing over the world to Netflix, in a way that is quite worrying. Price is going to be critical and people were saying they felt cinema was expensive. So it isn’t going to be the date, it’s not going to be: “oh I fancy going out tonight to the cinema or should I stay at home”… I think price is going to be a key factor.

The second point that I think really important to understand is also about the nature of demand… You know the dream of day and date is where you don’t have a cinema locally, you get to see it at the same time as everyone else. What we found from the research we’ve done, is… actually people don’t give a damn… if you’re outside the towns, you’re not part of the zeitgeist anyway, it doesn’t matter, so you don’t see the film for three months… Our problem is that it’s the demand for art house cinema we need to build.

Rikke Ennis: I would love to try out a day and date release all over Europé if that’s possible, but that would pretty much kill our own business, and I think a lot of distributors here would agree with me. So, in that way we are also hanging on to the old system, until somebody else – because we can’t risk it – takes the chance and actually tries it.

Jérôme Paillard: On the exclusivity I think you are thinking about the streaming of VOD and Netflix wanting to get exclusive rights. But it’s really a question of how much financing or MG (minimum guarantee) you can get, if it’s exclusive versus non-exclusive… Maybe it’s more that balance… and it works only for big films I guess .

Rikke Ennis: Ten years ago we hade this phrase: ”the internet rights are frozen”. And we didn’t even discuss it… [Then] it was quite easy actually to negotiate non-exclusive rights. But now everyone demands exclusive rights, also to VOD. Because they need to be in total control of who is actually showing the film, where and when. They can’t afford that somebody like us suddenly would make a VOD platform and just, you know, put it into the territory.

Bengt Toll: Right now we are trying to have the old model fit the new environment, instead of looking at the new environment [to] see what we have to change.

Johanna Koljonen: I think we need to have two conversations basically. What can we do now? And where do we want to go? I think they’re both harmed if we are trying to treat them as the same thing.

Michael Gubbins: We’re assuming that we’re in charge of where we’re going. Assuming that audiences and opportunities aren’t just going to come along without us having any say.

I just want to mention on licensing, it explains the contradiction. One of the things I think is going to be an issue now …is [that] the traditional broadcast players, including public service television are turning around and saying, “hold on a second, we haven’t got the window.” They are… big funders of film, [and] they’re turning round and say: “we used to have the first window. We used to be the first time you’d see it on television, and all of a sudden you’ve got these new brash young VOD channels and pay-tv channels coming in. And people are wanting to sell them exclusive rights.”

I think we should be aware that [this] might affect that some of the license fee that we think is always going to [stay in the production economy]. We might find that we bow down to the VOD channels at the cost of television.

Jérôme Paillard: I think [about] the convergence between social media and a film, and what we like in film – it can be festivals, and something which is emerging now, which is theatrical on demand. They have a lot of experiments in different countries… in the UK actually now Picture House is launching a new service… in France you have Septième salle and I Like Cinema…. I think it is something that should be very supported by the producers, the distributors. Very few people are aware of that. And I think it’s maybe the last chance for art house films to find a possibility to be in the cinema.

Michael Gubbins: It’s a fact [that] we know less about the VOD audience that we knew about the box office audience… Producers are going in in the dark and in a world where globalised businesses are landing on our shores and bringing in huge numbers. Netflix is in the top 20 of the most visited web sites in Norway now. But what do you know, what do we know? Data is the missing link, and the data that connects audience to producer.

Rikke Ennis: I would like to know when the local governments, that actually regulate on this, [will] understand that we are in the future now, and that you cannot treat every film like it’s the same film…

Bengt Toll: I need more transparency. There are figures already. We could learn a lot, for example in Sweden, if the Film Institute could release the figures they have. We would have wonderful data about what’s happening, especially to the small films, the art house films, the ones that actually are ending up in oblivion at the moment.

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Head of Nordic Film Market and Nostradamus, cia.edstrom@giff.se

One thought on “A Distribution Revolution

  1. This is a great article! It would be great should you could write something about video sharing websites such as http://VidYes.com. From what I could see right now they are under active development (and there are a lot of changes taking place), but I personally love the concept behind it. They take constant feedback on each stage in their development so most certainly soon we will see an online site that is worthy competing with internet giants including YouTube. Thanks in advance!

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