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Fourth Workshop Report — 16 – 18 September 2014 — Štiřín (Czech Republic)
Module 3 – Vod Platforms as Potential Friends of the EU Cinema
Introduction
The first day of the third MEDICI Workshop was devoted to the impact of digital means on film business and production. Participants discussed the need to share knowledge with the industry about new distribution platforms, and the desire to see European films – mostly art-house films – attract more people and find an audience. With the arrival of VOD platforms, they expressed concern over whether people would watch art-house online.
Or, in other words;
- What will happen five years from now?
- Do film funds support VOD platforms in their own country?
- Is it the role of the funds to initiate the creation of national VOD for their indigenous productions (all categories)?
- How can new media contribute to something different? Is there any possibility for the funds to work with new media platforms?
1. Universcine, a VOD platform devoted to independent cinema
Jean-Luc Ormieres – co founder of UniversCine (www.universcine.com)
See also:
Introduction
UniversCine was founded in 2001 by production and distribution companies, as the first independent VOD platform in France. More than 3000 movie titles are available, representing over 40% of French annual productions, 20-25% of the total number of films released, and over 40% of European films. The platform covers art-house niche markets and also acts as a virtual distributor. Little by little, Universciné builds awareness of unknown directors from all over Europe, who already have track records on their domestic markets, but none in France.
What does UniversCine do?
- They aggregate VOD rights. Independent distribution companies with arthouse films from all over the world have the possibility of channeling their acquisitions through UniversCine. The latter dispatches films on all available VOD platforms in France, thus guaranteeing rightholders the broadest VOD film exposure.
Somehow this puts Universcine in the position of a VOD distributor:- They have acquired films from all European and non-European countries. For instance, in the past they acquired nine films from Slovenia that have never been shown.
- In France, they started paying MGs for VOD rights. They can pay between 3000 € for a Chinese documentary to up to 200,000 € for a French film.
- They provide a huge editorialized content to trigger different spectator attitudes. With a team of more than 30 people, 8 of whom are either editors or journalists in charge of creating additional content — e.g. interviews and all sorts of bonuses to the film.
- They have exclusive cross-marketing collaboration with festivals such as Streams, enabling us to distribute the same films at the same time in several countries and on several platforms.
- They provide technical services to their partners:for example, a technical unit that tries to identify some potential pirates.
- Two to three years ago, they launched a physical label, BLAQ OUT – a DVD publisher targeting the same niche market as VOD.
- They pursue the idea of setting up similar platforms in various countries in Europe. Even if not successful everywhere, so far in Europe they have created a network of 14 platforms. These work in solidarity with each other to get through the occasional hard times and to buy content together or else for each other, elaborating on the mutualization of tools.
- They have developed a standard acquisition agreement to clear rights off films and hand them over to any platform that we want to operate in a territory.
- They decided to play local and to address people according to their culture and to what is happening in their country (like in Switzerland, the films on the platform are available in three languages, in Belgium in two languages, etc.). Potentially therefore, they have an opportunity to address some 260 million people.
Why?
- To help independent producers take advantage of distributing films online by themselves and thus take charge of the destiny of their films
- Because VOD has definitely taken over the DVD market.
- It is a step further towards creating a European market for art cinema and increasing transnational circulation. If there should be but one single person in, let’s say, Austria, looking for a Portuguese film, something important is achieved, because next day it will be two persons, and the day after four, and this is how, in Europe, we promote films coming from other countries.
- To provide new space for the exploitation of our films by adjusting to local environments.
- To contribute to the change of the players' (directors, actors and other players) mindset by helping them understand the benefits of such distribution.
Adjusting to the new media:
Portability
- Portability applied to SVoD allows consumption in different countries and announces a change in the relations between the producers and the sales company.
- It provides possible technical solutions for the EuroVoD platforms:
- Combined identification of users through IP and their data bank;
- Possibility for cross-border access when traveling abroad;
- High-level security for both customers’ details and content licensors' rights
- It has legal and business implications:
- To inform users that if they act in contradiction with the Terms & Conditions, the service will be interrupted;
- To inform rights holders and re-sign contracts with them;
- To enable rights holders to authorize or not this type of exploitation of their films
- The VOD market of expatriates:
- This market is important for bigger countries (2 millions for France) but also for small ones with a large diaspora, like Ireland
- Those people are extremely hungry for their domestic culture.
- There are 15-20 million people from Europe working temporarily in third-world countries.
- The idea is that every citizen with a credit card issued in his/her country can have access wherever they want to the movies that have cleared rights in their native country.
- It means to start working with sales companies so expats can see their national films even if the films have not been sold to a local distribution company.
- Portability also refers to people who are learning a foreign language and have no access to the films from the country of the language due to the lack of distribution.
- A VOD deal can be made between producers and sales agents so that these films find their way to such viewers 18 months after their release
- To offer Ministries of Culture or other to show the films in their cultural centers around the world (this worked very well with the Ministry of Culture in France). The Goethe Institute or the British Cultural Institute could do likewise.
The role of new media in different funding criteria
Cultural criteria:
- To admit that VOD is a new media, not simply a branch of video or TV.
- To enhance the “audience appetite” for non-domestic content.
- To improve the transnational circulation of films in Europe.
- To create an awareness of a European identity/ies in times when this is endangered.
- To keep culture exempt from the market rules.
Economic criteria:
- Bigger revenues for the exploitation of a film, enhancing the availability of the film for the audience
- How do the business models affect the value chain? Transactional VoD versus Subscription VoD?
- The impact on the current financing system
Industrial criteria:
- Where do the new media influence the development and wellbeing of regional industries?
Collaboration between new media platforms and other partners
- It is important to ask producers what their expectations are with respect to VOD. They will need to define/understand the release window their content is made for. There are examples of films with mediocre theatrical release results nonetheless scoring 50% more revenues than in cinemas with their VOD release.
- We need to take specific actions towards the key players in the industry (directors, actors, but possibly also casting directors, HoDs) to render them more cooperative and less wary of having their film on the Internet.
2. Challenges and opportunities that VOD platforms face
Challenges
- 2723 VOD services exist in Europe, but hardly 200 are sustainable businesses!
- VOD at the moment represents between 2-4% of the revenue generated on a movie. Could it be up to 15 % within 4 years? What is going to happen in the future? Will that be compensation revenue or additional revenue? How will the financiers, public funds included, be reacting to these new revenues? How can they estimate them?
- The problem with VOD is that you know figures (number of subscriptions and rentals), but you do not know your audience. It is a big challenge to gain direct dialogue with the consumers, because the Internet service providers render most of the traffic blind (90% of traffic generated thru IPTV).
- What will happen with the Subscription VoD (SVoD) (which is halfway similar to so-called “couch-potato" behavior of just pushing the button on the remote control)? Where should SVoD be included on the release windows scene?
- Actual measures related to the release windows protect not only the financing system (MGs, pre-sales to TV and pay-TV which, in France, contributes up to 18 % to the financing of the film industry), but also the quintessential link between the spectators and the film. Should the windows be reduced? And what would be the impact on the financing system?
- The DVD market is gone, pay-TVs and TVs are losing interest in financing films (in France, 50% of the production does not get support from pay TV and free TV): VoD could then become an opportunity in the long term.
Opportunities
- Video-on–Demand enhances the trans-national circulation of films, to which theatrical distribution cannot contribute.
- VoD is a significant opportunity for some genre films.
- VoD, at the moment, might affect the existing financing and revenue models without providing any proper economic alternative.
- In a year from now, the market will change and offer VoD platforms new opportunities
- VoD also can be an important link with the audience that lives in a sort of a cinematic desert, since in many countries nothing but the capital city theaters exist. But how easily can it go beyond this?
- In some cases/countries, funds should assimilate VOD release into theatrical release. This applies particularly to co-productions made under the European Convention on Cinematographic Co-production. Eurimages has already taken some steps in this area.
- The competent authorities should also acknowledge co-productions where a co-producer has at least a contract with a VOD distributor, especially when it comes to the countries of minority co-producers.
- Funds must find a way to help producers and other key players to better understand what VOD means, in order to make their films attractive and more easily available on such platforms.
- Funds must include the role of new media in their evaluation criteria.
- We need to redefine altogether the time and space of the exploitation of our films, adjusting them to the local environment.
- A network of people with diversified expertise is necessary to shape things better in the future.
Promotion, Distribution and Success Evaluation
- Module 1 – The Role of Public Funds in Promotion
- Module 2 – Distribution – Who and What to Support
- Module 3 – Vod Platforms as Potential Friends of the EU Cinema
- Module 4 – Release Windows
- Module 5 – Finding and Addressing Audiences
- Module 6 – How to Evaluate Success
Illustrations by Mišo Duha
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