Change in Distribution Models

Change in Distribution Models

Americans love going to the movies, but while box-office revenues have risen incrementally over the past few years (in 2013, receipts topped out at a record $10.9 billion), that’s solely due to rising ticket prices; attendance continues to plummet. This year, it’s estimated that only 1.24 billion tickets will be sold at American theaters, down from 1.34 billion last year, and 1.36 billion in 2012.

VOD:

VOD is the prime thorn in the side of movie theaters, which view on-demand as a means for distributors to bypass big screens altogether. While this has yet to involve any giant releases, small and mid-range films have increasingly proven that debuting on VOD shortly ahead of a theatrical release, or day-and-date on VOD and in theaters simultaneously, is a profitable strategy.

This past summer, RADiUS-TWC released Bong Joon-ho’s futuristic action saga Snowpiercer on VOD only two weeks after it hit theaters, and as of October, the decision has paid off handsomely, as the film has made approximately $4.6 million in box-office receipts and a whopping $7 million from VOD sales.

Netflix:

Having already made inroads into television production and distribution with hits like House of Cards and Orange Is the New Black, Netflix has now set its sights on usurping control of cinematic distribution as well.

The company’s first salvo will come in 2015, when it exclusively premieres Crouching Tiger, Hidden Dragon 2: The Green Legend on the same day the film debuts in select IMAX theaters. An even more drastic sea change, however, is promised by Netflix’s recently announced deal with Adam Sandler, which will have the comedian produce and star in four new feature films for the streaming giant.

companies with requisite resources (Netflix, Amazon, Hulu) will seek to totally eschew the Hollywood machine, creating and delivering content all by themselves.

Hollywood is changing with the world:

Even before the pandemic, the entertainment landscape was moving toward streaming services and on-demand content. Those trends are here to stay long after COVID-19 is gone. Let’s talk about what’s on the horizon.

Big Buys:

After the 2009 financial crisis, there was a lot of corporate consolidation. Some companies went bankrupt, while others were purchased. A few merged to increase market share.

The end result was fewer big media companies, but the ones that remained were larger than ever before. That era of consolidation has continued to this very day: Comcast owns NBCUniversal, Viacom owns Paramount, AT&T owns Warner Brothers, Disney owns Fox, and more. And these are just the “legacy” media companies.

Show me the Money:

The studios know exactly how much money they can make from a wide-release, global box-office hit.

In fact, there’s no streamer-exclusive movie or show that can generate that much money—and the streamers know it. But the streamers also know that the goal isn’t a one-time home run, it’s to grab eyeballs and keep them glued to their respective services. A year’s subscription to Netflix costs upwards of $150. A movie ticket in Los Angeles costs somewhere around $15. Netflix would rather bank on its customers paying $150 a year for the next 50 years than try to continually sell its movies and shows, one by one.

it’s easier and safer to make money from subscribers than it is to make money from people who may or may not buy your newest product each time you put it out.



US independent producer Karin Chien raised the idea of 500 independent filmmakers each paying $1,000 to become part of a distribution collective that could hire a year-round marketing team, rather than each filmmaker trying to reinvent the wheel with self-distribution for each of their films.

“Power is concentrated with those who hold distribution [rights] – ether that was the studio system or now, the platforms. We’ve seen more and more consolidation in the past few years.

Sarajevo CineLink’s Radical New Distribution Strategies webinar, she added: “What can we do so that every filmmaker doesn’t have to embark on this year-long journey to get their film to an audience? How do we work together to make that happen as opposed to working against each other or getting that one slot on a platform? We can’t just individually confront the consolidation.”


Breaking Rules:
“Distribution of a film is an extension of its storytelling,” she said. In one example, she negotiated the rights with UK broadcaster BBC and public funder BFI to include self-distribution plans for Sean McAllister’s A Syrian Love Story.

“We broke all the windows and broke all the rules,” she said. “We had this insane visibility, 2 million people in the UK saw the film in that first month it was out…that would have been lost if we had given the film to a distributor.”