MovieMaker’s Fourth Annual Guide to Digital Distribution: A Game of Thrones

What a difference a year makes. Independent film distribution has continued its blink-of-an-eye evolution into 2015 with Video on Demand (VOD) at the forefront.

The former straight-to-video wasteland is now a place for exploration and experimentation, so crucial to a distribution plan that it’s no longer a question of “if VOD,” but “when.”

MovieMaker hereby offers up our fourth annual Guide to DIY Digital Distribution. Last year, we cried out for more transparency and discovered that moviemakers have an incredible, and often confusing, array of digital choices. While that fact remains, this year has seen a winnowing down of platforms that offer everything to ones that fill a niche need under one roof.

Uncertainty is still a given as one enters distribution, DIY or not, but other advice remains constant, as well: Know your film. Know your goals. Be realistic. Talk to other filmmakers. Case studies can assist but there is no single right answer, because your film is unique. The only thing you can do is begin.

For most finished independent films, the festival circuit is still the best way to inaugurate distribution, according to representatives from A24, Factory 25, Magnolia and Magnet Releasing, Oscilloscope Laboratories and Vimeo. During a panel at the New Hampshire Film Festival in October, these reps agreed that the press, audience and professional relationships developed at festivals are key building blocks when strategizing for VOD.

Because of festival build-up, films typically have become available on VOD after a festival and, possibly, theatrical run. But these days nearly any sequence of releases occurs. Chris White, Magnolia’s director of business affairs and delivery, pointed out that Joe Swanberg’s Drinking Buddies opened on VOD, gained audience buzz, and then headed to the big screen in 2013. Another plausible plan could be to release day-and-date (the same day in theaters and at home) in a handful of cities and on a subscription-VOD (SVOD) platform for an exclusive, time-limited window. Factory 25’s founder Matt Grady did that with Homemakers, for example.

“There’s no exact science to this. We all just keep saying that,” said Amanda Salazar, film acquisition director for SVOD service Fandor, which partnered with Factory 25 on Homemakers and other titles. The pair announced a seven-film day-and-date joint agreement this June, including Lynn Shelton’s We Go Way Back from 2006. To mark the occasion, Shelton’s first film had a “VOD IRL” (i.e. available both on demand and “in real life”) event with Seattle’s Northwest Film Forum (NWFF) on September 26.

Major theaters chains such as AMC, Regal, Cinemark and Carmike have refused day-and-date releases; some art house theaters are also wary. But NWFF’s artistic director, Courtney Sheehan, thinks “VOD IRL” rides the exodus to digital. “So many theaters are trying to fight against it or ignore it, and I’m interested in playing with it,” she said. Instead of having a film limp along for a week-long run, Sheehan packs the house with one-night-only events; for We Go Way Back that meant a Periscoped Q&A with Shelton via Twitter.

Was it a VOD success? Salazar says, “It was one of our most watched films of the last couple of weeks.” Fandor, and others in similar shoes, use an array of non-numerical criteria to measure a film’s success. Providing a platform for films people otherwise couldn’t see and garnering press from major outlets are some example markers. She also credits VOD IRL for creating a “fabricated window of scarcity,” something that all filmmakers need to do.

If “transparency” was the buzzword of 2014, then “windows” are the talk of 2015. Mia Bruno, producer of marketing and distribution for crowdfunding platform-come-distributor Seed&Spark, breaks a film’s typical VOD lifespan into three successive windows: 1) transactional window for pay-per-view sites such as iTunes (sometimes called transactional VOD, TVOD); 2) subscription window for sites like Netflix where viewers pay one fee for catalogue access; and 3) ad-supported window for sites like Hulu where viewers watch with breaks for ads. (We followed this chronology when organizing this year’s guide.) For viewers, that feeling of scarcity decreases with each window.

There is great diversity within all of the TVOD and SVOD options; the biggest dividing factor is whether or not a platform requires aggregators (companies that negotiate placement of films onto destination platforms for either a flat fee or percentage). Most aggregators also handle delivery and encoding of a film for the appropriate formats.

Regardless of how your film finds its way to iTunes, once it’s up, “what’s important is visibility,” said Bruno. Placement of your film’s poster art on a home page or in a “staff picks” section is something a distributor and operator can negotiate, she said.

Alpha-stacking (i.e. pushing a title to the top of a list by having it start with “A”), particularly on cable directories, is another marketing reality. “People tend to rent what is right in front of them,” Bruno said. So go, make that aardvark doc.

Bruno believes VOD comes to life when moviemakers embrace the creative potential of marketing: “A film is not a car part; we are not dealing with entities with no emotional connection. Try everything.” For Seed&Spark release This Is Happening, the plot of which involved a pound of pot, the company went as far as creating a strain of marijuana.

More advice: Sure, it’s emotionally validating to get an all-rights distribution offer, but it may not be the wisest decision to accept. Holding on to your direct-to-consumer rights can be extremely prudent, our experts said. Bruno also cautioned against thinking that global sales are a slam-dunk, because without a comprehensively articulated global strategy, foreign territories might not yield effective returns.

In summary, DIY VOD is a highly experimental, non-linear process. (Think crazy quilts, instead of following a pattern.) Take risks, and be willing to shift gears. Informing yourself is an enormous help but this field is changing so rapidly that all of your peers and even your advisors are also somewhat in the dark. But hey, movies look better that way.

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Transactional VOD Platforms

When films announce their VOD availability, it’s fairly common to see “Now available on iTunes, Amazon, Google Play and Vudu.” Sometimes Sony Playstation, X-Box and a few other semi-recognizable brands get tossed in. That should tell you something: The “destination” transactional VOD platforms are either seen as interchangeable, or as serving a unique enough audience that they are not in competition, at least not over the unit of a single film. With the exception of Amazon (through CreateSpace), all of the following platforms require aggregators, who provide access as well as information not made public, and in some cases negotiate for prime placement. Though aggregators’ influence with sites varies, most have relationships with and can approach all of the sites. For that reason, we list only a few destination TVODs.

No platform can beat iTunes’ reported 800 million users. That’s why joining its 85,000 movie titles has benefits, even if it costs around $2,000 for the proprietary encoding handled by an aggregator. After that’s factored in, the per-view revenue split is generally 30 percent iTunes, 70 percent creator, with some difference per territory. In the last year, iTunes has expanded its international reach and made its practices with creators more transparent with iTunes Connect, including a list of preferred aggregators. With Apple’s music sales down 13-14 percent in 2014, and a shift toward subscription-based models like Beats, one wonders if the same migration will happen for movies.

Amazon can deliver users in the hundreds of millions, but are those users accustomed to buying or renting movies there? With successful original content like Transparent, SVOD service Amazon Prime (a $99 per year subscription that includes free shipping, access to select film content, and other benefits) is making its mark. But for the DIY filmmaker, Prime is still a gated community that an aggregator will have to help you enter.

The ability to post and sell your own films on Amazon Instant Video through CreateSpace does allow potentially vast exposure without set-up costs and in a short turnaround. But Amazon sets the price, keeps a steep 50 percent ($00.10 for every stream over six minutes long on Amazon Prime) and doesn’t accept any films shorter than six minutes. Users can sync content and watch across multiple devices. At this time, views are limited to within the United States.

Google Play is just one of the many-headed monster of options under the Google umbrella, which owns YouTube. Benefits include integration with the vast array of Google services and Google’s overwhelming presence in lives lived online. Google Play caters well to independent musicians (who can upload directly and get a 55 percent revenue share), but moviemakers need an aggregator to get their work up—making it a much less open platform for indie cinema.

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Subscription VOD Platforms

A SVOD platform attracts users by being the only service that carries a particular TV show, film or kind of film, or by eliminating the time you waste searching for content. 2011-launched Fandor now contends with Tribeca Shortlist, HBO GO, CBS All Access and YouTube Red, just to name a few. Vessel could be a player at the beginning of a film’s release strategy because it specializes in “early, exclusive access.” NBCUniversal is planning to draw comedy lovers to its SVOD service, Seeso. While Netflix is moving toward original content and away from indie acquisitions (“We’ve found that the 20th documentary about bicycling will mostly just take away viewing from the other 19 such docs,” its website explains to potential investors), the giant is still innovating fast enough that everyone else wants to borrow from its closet.

Though its users number about 69 million (compared to Apple’s 800 million), and pay monthly subscriptions starting at $7.99, Netflix is still the at-home movie brand to beat. Or if you can’t beat ’em, join ’em, no matter the cost. Remember when you could lobby Netflix to add an indie title by emailing an account? That morphed into hushed, upfront licensing agreements which grew smaller and smaller. Now the company is moving its licensing resources into original productions, some of which are releasing day-and-date with theaters, such as Beasts of No Nation. Aggregators are required to gain entrance and the increasingly exclusive deals (and/or one- to two-year licenses) are fewer and farther between.

While the stats remain slightly foggy (creator revenue—50 percent—is based partly on amount of time film is watched and gross revenue of all subscriptions), Fandor holds strong due to its curatorial care. There are no set-up fees, it’s device-friendly, and moviemakers are free to host elsewhere. Films can get lost, but because Fandor isn’t bound by the timelines manufactured by mainstream movies, they can get found again and re-curated under a new theme. The company is certainly taking risks. One wonders if the shifting leadership (four CEOs in two years, if you count the interim) is a result of those risks paying off, or not.

In 2015, British-based SVOD service MUBI signed deals with Paramount Pictures and Sony Pictures Television. That may not signal “accessible” to the DIY moviemaker but MUBI’s roots are in art-house titles. Take their exclusive global release of Paul Thomas Anderson’s documentary ​Junun this fall. “Global” is key here, since MUBI can be accessed in more than 200 countries. It also has a unique one-a-day releasing strategy. Users have 30-day window per film so the search for content is limited to 30 films on any given day. According to The Film Collaborative, MUBI accepts films from independents and the revenue is split 50/50, based on views over the 30-day run; typical licenses are for two-years and non-exclusive.shield4

Ad-Supported VOD

Are ads annoying to viewers? Yes. That may explain the fact that both of the following sites have corresponding subscription-based models (Hulu Plus and the new YouTube Red, launched in October).

Despite Plus, we placed Hulu in the ad-supported category because 1) Hulu requires aggregators, 2) Hulu could be more transparent about how it relates to creators, and 3) Hulu has not excelled in creating original content the way its competitors have. Even still, it has brand recognition and is device-friendly within the United States and Japan.

Post your cat videos without money changing hands, but YouTube also has ad-supported options where creators earn AdSense payments via YouTube’s Partner Program. The Partner threshold has been lowered from 10,000 subscribers; now users need 1,000 subscribers to qualify. There are no set-up fees and your movies will have growing international reach, on a handy embeddable rental player. Despite its info-rich “Creator Academy,” the help section is complicated and often unclear. YouTube is well-known and well-used but has struggled to break out of the “free content” mindset, at least for indie filmmakers.

shield3Traveling VOD Platforms

If you’re confident in your ability to bring an audience to your film, then traveling platforms are the ideal choice, offering moviemakers the back-end software to engage an audience. The platforms listed here are embeddable into all manner of sites and devices. You’ll want to compare them for their revenue splits, payment methods (both for your users and you), storage, player quality, ability to work in or geo-block foreign territories, and other factors. When considering your options, keep in mind that companies (many more than we’ve listed here) are opening and closing their doors on a regular basis. The field has yet to sort itself out.

Gumroad has positioned itself as a sell-through platform for creatives of all types and it facilitates an array of transactions (all via PayPal), including the bundling of digital media and physical merchandise. It offers one of the best revenue splits with just five percent plus $0.25 per transaction to Gumroad, the rest to creator. It embeds on your site and on social media and has a simple, straightforward help section. The “Variants” feature allows you to sell your film at different resolutions and add extras (e.g. a one-hour Skype director Q&A) to a product. If you’re selling multiple products (a film and the book it’s based on, for example), Gumroad may be the way to go.

Pivotshare sets itself apart by encouraging collaboration with “Network Publishing,” a feature that allows multiple content creators to publish on the same channel. (It likewise encourages channel start-ups by non-creators for 10 percent of revenue.) The revenue split (70 creator, 30 Pivotshare) isn’t the best, and disbursement is based on murky “PlayRank” statistics, an in-house calculation. There are no set-up costs and users can rent, purchase, subscribe or use a tip jar. While many sites use only PayPal, Pivotshare does not—perhaps both a pro and con.

Sundance was an early adopter of the elegantly designed Reelhouse but press attention dropped off after 2013. That shouldn’t take it out of consideration, though. Its revenue split is competitive (10 percent Reelhouse plus $0.50 per transaction, remainder to creator) and its player embeds on your site as well as on Facebook and Twitter. The Reelhouse site also has a storefront with staff picks, which could drive traffic. Users have a range of payment options, from free to “pay what you want,” while filmmakers receive payment through PayPal, Bitcoin, or Stripe.

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