The New Film Distribution: What You See is What You Get

By The Wysiwyg Team  |  07-Jun-2007

At a time when international cinema and DVD revenues are declining and TV audiences are dwindling, why would a young company spend time signing up distribution rights for all sorts of independent content from all over the world? The answer might elude, confuse or scare many of the traditional media giants, but this is exactly what Wysiwyg Films is doing - and why? Because they looked to the future of content distribution three years ago and saw the internet as the inevitable way forward. For all media. Everywhere.

Okay, but what's really happening to traditional distribution? The answer: evolution not revolution.

Even though international theatrical ticket sales have risen, spend on marketing has risen even more sharply meaning relative revenues have either plateaued or dropped. The success of some British-centric films may have enabled UK cinemas to fare better than most as worldwide ticket revenues have declined. So the future for cinema does not look rosy - actually new digital technology will enable a whole new evolution for cinematic events (see the next Wysiwyg article for more). Enter ‘hate cinema’ into Google and you get 2,290,000 results, and a web swamped with critical blogs and articles; people see cinemas as expensive, dirty, uncomfortable, and much worse. In 1980 box office sales made up 55% of a film's revenues, now it represents only 15%, largely because of the rise of VHS then DVD.

But there now exists a huge range of DVD titles fighting for shelf space, average sales per title continue to fall, with notable casualties, such as the under-performing Shrek 2. Not surprisingly, retailers have suffered too. Tower Records has closed its US and UK stores, and HMV reported sales down 17% in the nine weeks to July 2006.

And television? TV audiences continue to fall, with Britons watching almost an hour less television a week than they did two years ago. YouTube now reaches more of the attractive 18-24 male market than MTV, and Harris Interactive found that 32 per cent of frequent YouTube users say they watch less television.

So what now?

The industry has to embrace P2P/IP TV as the new TV, download-to-own as the new DVD, and worldwide-synchronous online releases as the new cinema. This does not condemn or shun the traditional forms but understands that change is essential and not to be feared. Wysiwyg is keen to stress that it's more evolution than revolution, and this ability to move with the times is nothing new in entertainment.

In the earliest days of cinema silent movies evolved into 'talkies'. Subsequently cinema was undermined by TV, then VHS. Then DVD undermined VHS. Now the Internet undermines them all. Every time the industry viewed new technology as a threat, that very threat ended up increasing sales.

Now we have learned from our mistakes (just look at the newly thriving independent music industry). We can see that the internet does not represent a threat but rather an opportunity to reach bigger audiences with more product, more quickly for far less cost. It even has built-in marketing tools like peer-review and recommendations, and brand new methods for taking advantage of old revenue sources such as advertising. Benefit to consumers, benefit to filmmakers, benefit to the entire distribution chain. Keith Evans, founding director of Baker Street Media Finance, says that "for independent film [new media distribution] has to be the future."

We, consumers, have not evolved beyond our desire for entertainment - just how we choose to access it. And we now have plenty of choices. Download services are re-populating our distribution landscape, giving birth to many exciting new opportunities for everyone to benefit from. George Lucas has long predicted the inevitability of online distribution and we can now see the launch of all sorts of new download services, which will make audio-visual content accessible more conveniently and more cheaply than ever before. In some places, we will actually watch it for free.

But where to start? With new services cropping up almost daily it is all too easy to get lost in a sea of choices. Each seems to offer something new, something different from the last and each one adds to a sense of dread, hesitation and fear. For filmmakers keen for their film to be seen, for sales agents with back catalogues to sell and distributors with established channels drying up, how to navigate a way forward through the unchartered territory?

Well, let's take a closer look at some of these new services. Some are scams, cross those off right away. Others accept any kind of film with no quality assurance, so no to them too. Some cannot show films full screen or full quality, some have no security for their files, some do not pay out and so on. Wysiwyg's brand of natural selection weeds out all no-hopers. Now the list looks a lot smaller and more digestible.

But how to protect against these pitfalls? Before Wysiwyg signs a deal with a new service it performs a thorough due diligence check on all aspects of that service: technology, accounting, delivery quality, security and reporting standards. Wysiwyg does all the work and untangles the mess, locating the best services in the right territories for the appropriate content. This informed and broad overview is the product of strenuous research, collective industry experience, technological knowhow and the highest respect for films.

From this unique position at the forefront of a new world of choices, Wysiwyg selects those that excite the imagination, have a credible business approach and appreciate the great opportunities afforded by new technologies.

Such as?

Lycos. Set to launch Cinechat, a new "watch and chat" experience, this allows users to view and instant-message in synchronous real-time. Millions of viewers around the world will watch an online movie premiere at the same time and interact with any of the other viewers. Advertising pays for it, so the viewer pays nothing: no travel, no parking, no queuing, no ticket to buy.

Okay, keep talking.

For another variation look to EZTakes. This US-based service enables users to download and burn films to recordable DVD that will play in standard DVD players, offering the same quality and all the extra features of the original DVD, even allowing users to download all the film's artwork. They boast a growing catalogue of over 2000 feature-length films of all genres and and have the technology to support both Windows and Macintosh users.

Sounds good. Anyone else?

Janus Friis and Niklas Zennström. The founders of Kazaa and Skype now bring you Joost, the first worldwide P2PTV conduit. Applying the same peer-to-peer technology that forms the backbone of Skype and Kazaa, Joost offers a vast library of content whilst allowing users to switch channels with the click of a link. Users will also have TiVo-like control of the content and access to any show offered regardless of time of day, either on a computer or on a regular TV. The service is so focused on consumers that they can create their own channels to interact with other users. And the best bit - it's all free. With an advertising-backed model, the user pays nothing. The advertiser pays per viewing of their advert and this revenue is split between the service, the distributor and the producer. Adverts are placed at the start of a production and then at 15 to 20 minute intervals. An advert is specifically associated with the content in which it plays, and, more importantly, targeted at the viewer. Through a user's activity within Joost the service learns about that individual's viewing habits and the demographics within which they fall, then plays adverts targeted at those groups. Thus creating much more targeted advertising than TV has ever been able to achieve.

Although there is much resistance from traditional distributors, there are those that are open and eager to see this new future for independent film. Carmen Menegazzi, former head of Columbia TriStar (UK), says that "internet distribution is the future of the industry. Theatrical will remain attractive to consumers as a real event to share with an audience but niche films and library exploitation will find their new business model in internet distribution. The ease of use and title availability will make internet distribution the winner in the next decade."

David Wilkinson, founder and chairman of the independent film distribution company Guerilla Films, feels that if this new form of internet distribution "works it could change indie film greatly. It's almost all we have to look forward to. Our films are being sidelined."

Online film distribution is no longer a distant threat, misunderstood and therefore feared. It is here and now, with workable models that protect the interests of all involved. Traditional channels are flirting dangerously with possible extinction, and it is the fittest that survive; those that can adapt to changing consumer's habits and technological advances. With this new dawn of digital opportunity, Wysiwyg looks to a positive and secure future by pioneering a way forward for all independent content.

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