Success in Digital Distribution: A Conversation with The Orchard

Swimming through the tides of new digital tools and distribution entities has become something of a pastime for me.

Something new happens in the world of independent film distribution every week. Whether it’s executive shuffles, divisions shuttering, or new companies opening, keeping on top of developments and analyzing new trends are integral to my work as a consultant and digital marketing strategist.

The Orchard has been in the digital entertainment space for 15 years. Co-founded by Richard Gottehrer, who also co-founded Sire Records, The Orchard has its origins in the music business and, in the early days of the Internet, started exploiting digital rights for musicians before anyone really knew what to do with them. When iTunes launched in 2003, The Orchard was one of the first launch partners making songs available to the iTunes store. Now that films are increasingly being streamed on iPads, the company is leveraging their pre-existing relationship with iTunes to bring independent films to the store.

Danielle DiGiacomo, manager of film distribution, spoke with me about how The Orchard works with independent filmmakers. “We do curate and want to be discerning about the films that work with us. Our New York office handles documentaries and other independent narrative films, and our office in L.A. handles genres like sci-fi and horror. We also have a division for action sports films that we recently rebranded and launched as EchoBoom Sports. It offers skateboarding, snowboarding, motocross, off-roading kind of films with amazing production values and innovative filmmaking. They attract corporate brands like Vans and Red Bull to sponsor those films with big promotional campaigns.”

Content platforms like cable VOD and Netflix are becoming much more selective about the films they choose and the deals they offer, and certain factors weigh heavily into these decisions. “It helps to have played at major festivals, have a small theatrical, great reviews, notable names, a broadcast deal, anything that shows your film has merit and exposure. For documentaries, even if the film hasn’t played the major festivals, playing at some of the major niche festivals shows there’s an audience for the film. If the film has a good outreach campaign and partners with organizations or has a big email list, those can be attractive,” said DiGiacomo.

Like many new VOD platforms, The Orchard does not charge any upfront fees to a moviemaker. It does hold digital rights over the work, though. “We do take rights exclusively and we take on the expense of encoding and delivering to the various platforms. We have a flat revenue split between 25% and 30% for one film. If we make a deal with a distributor or label, an entity with more than one film, we can sometimes be more flexible with our deal terms.”

As is the trend in new distributors and aggregators, The Orchard performs in-house encoding and promotional services. “We are also a technology company, so we can encode and deliver all the various specs to the platforms within our New York offices. We also have a YouTube team that handles our multichannel network, and a great relationship with YouTube. Our marketing efforts are a recoupable cost that is agreed on with the filmmaker, meaning before any revenue is split, these need to be repaid. Since we have really great relationships with banner ad companies and social media tools, we can keep our costs really low. We use Google Ads, Facebook ads and banner ads. We work with filmmakers to create the ad copy, graphics and links that direct online traffic to a buy-site.”

A film that isn’t attractive for a big buy in foreign countries, but serves niche audiences amassed outside of the U.S., has a range of options. “iTunes is our most comprehensive multi-language, global support platform because we can service about 50 countries, wherever there are iTunes stores. To access iTunes, your film must meet quality standards and have subtitles for those languages and that cost is on you. When we can go worldwide with other platforms, we do. Netflix has subscribers in Canada, Ireland, the U.K., Nordic, Netherlands and Latin America. Amazon Instant is U.S. only; Hulu is U.S. only; Xbox, Playstation, Google Play and Vudu are the U.K., Ireland, Australia and New Zealand, mainly English-speaking countries. Xbox and Playstation like to be more selective for their demographic (ie. gamers, male, 18-30 yrs old). If the film isn’t appropriate for those services, it probably won’t perform. We can carve out territories as well if a film already has deals in some countries.”

An essential step comes during influencing placement. “As this is a new release-driven market, getting on the ‘New and Noteworthy’ or ‘Now in Cinemas’ sections is a big deal. Giving sites like iTunes exclusivity for two weeks before anywhere else also helps with placement. While our team pitches the platforms where we would like the film to be, the sites also determine the placement based on how much they believe in the film and what else is coming out that week. If there are a lot of high-profile titles being released, it will be harder to get good placement. Sometimes they suggest release dates because they know what is coming out when. They also look at artwork, so that is important.”

Choosing a release scenario is no small task and there is no “right” way to distribute a film. I asked if independent films should be day-and-date or cycle through windowed releases. A major issue with day-and-date is the policy of many chain cinemas that films not be available digitally at the same time as their theatrical runs. “People have very short attention spans and when a publicist is working to get press for the theatrical, press attention will die down very quickly. Try to release digitally as closely as you can to the end of your major theatrical tour while the good press is still at the front of people’s minds,” advised DiGiacomo. “Also, you may want to hold back your film’s subscription-based release until after your transactional platform releases because you will be cannibalizing your sales. People will see something on Amazon or iTunes or YouTube Movies and immediately check to see if it is on Netflix or Amazon Prime because they already have a subscription. Even if we advertise only for iTunes, we are inadvertently driving people to subscription platforms because they regard that as watching for free. We want the transactional release to come about two to three months before the subscription and ad-supported sites.”

Another consideration is a broadcast deal. Some broadcasters do not want a film available on certain platforms before or too closely after the broadcast premiere. “Before a filmmaker signs a deal, they need to know what they are agreeing to. Some broadcasters have deals that ask for a 120-day holdback after first broadcast even though they aren’t exploiting digital rights or only exploiting for 30 days. The first thing to do is try to negotiate for the shortest holdback window. Cable VOD, if they want exclusivity, it is usually for 30 or 60 days. The Orchard can work with all of this, but we do want to promote the film even when those other releases are happening. Sometimes broadcasters don’t want anyone to even mention the digital availability date which is detrimental to transactional sales. If we can promote while the film is getting a release in another window, that helps it break through even more,” said DiGiacomo.

DiGiacomo was unable to go into specific details about films working with The Orchard, but she did give me some general information about two recent documentaries. “We have one documentary targeting the live theatre audience. The performers involved in the film were able to lend support through Twitter and YouTube videos, plus targeted ads and social media. It has reached #8 on the Documentary top seller’s list on iTunes. Also, there was a social issue documentary that had dozens of community screenings worldwide. They gathered and cultivated a large newsletter list and partnered with relevant organizations for over a year leading up to digital release. It charted in the Top 10 documentaries on iTunes.”

The recipe for success in the digital space depends on having a strong film, a defined audience to target who will actively talk about the film within their networks, the help to make that audience aware of the film and the foresight to distribute the film on appropriate sites for that audience. The Orchard is in a position to help with the awareness and distribution portions of that recipe.

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The Orchard on YouTube

The Orchard also operates a multichannel network (MCN) on YouTube, currently ranked fifth in unique visits. As a YouTube-certified company, they have a team dedicated to helping creators optimize their videos for viewer search, monetize their content through advertising and grow channel subscriptions on YouTube. Recently, they formed a relationship with online horror film publisher Shock Till You Drop to jointly promote and distribute horror films worldwide.

I spoke with Jeremy Rosen, Director of Video Network Programming, about the ways The Orchard helps develop its YouTube presence. “We work closely with clients on best practices for production on video intended for YouTube. Without great content, it’s difficult to engage viewers, let alone convert them to channel subscribers. A large part of what we do is analyze activity and work with our clients on strategy based on that. Again, some of that’s coming up with a programming schedule, but we also find chains of events that worked in the past and help the clients to incorporate the same tactics going forward,” said Rosen.

New Picture (14)

A lot of viral or high-view-count videos benefit from video seeding or work with advertising companies to secure placement on highly-trafficked websites. “The Orchard’s interactive marketing team works on promotion and marketing of releases from our YouTube clients. This generally includes a lot of the same efforts a video-seeding company would be involved in.”

MCN operators often cross promote with similar channels in the network, ideally growing the subscription base for all. Thus far, The Orchard’s MCN has mainly been beneficial for music video clients, but will soon start expanding to include sports and horror. “When we look to cross-promote, we want to find complementary audiences. For instance, if film A and film B would probably have the same audience, but only have a 10% overlap in subscribers on YouTube, there’s a huge opportunity there to grow the audience for both channels through cross-promotion and collaboration.”

For creators of web series or genre film, the YouTube team at The Orchard could be a great help in raising the profile of a project, building a subscriber base and attracting premium ad revenue to sustain content creation in the future. MM

Sheri-Candler-2011Sheri Candler will be participating in a global webinar on independent film distribution hosted by Atlanta Film Festival on October 20, 4pmET/1pmPT. Information available here.

 

1 Comment

  1. Scott McMahon

    October 15, 2013 at 8:19 pm

    Another great article from Sheri Candler. The peek behind the curtain of how an independent digital distribution company works is very helpful to all filmmakers. The key element that I noticed is that Orchard still requires filmmakers to come to the table with a lot of community building work already in place, such as a lengthy email list. I can see how Orchard can leverage their brand and provide a great gateway for filmmakers who have their “sh*t” together to get even more exposure on multiple digital platforms. A working partnership indeed, as oppose to a straight “all rights” buyout and no control.

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