Industry grapples with how to restore value to films

10 March, 2015 by Don Groves

Worldwide more movies than ever are being produced and they have never been more accessible on multiple platforms – but this “commoditisation” means the perceived value of films has dropped.

So what can be done to restore the value of films at a time when endemic piracy suggests many people aren’t willing to pay for what they can get for free and they don’t regard file-sharing as theft?


That conundrum was debated at a forum in Sydney on Tuesday afternoon entitled 'Stories Valued: Audience and revenue in the new distribution landscape,' hosted by Screen Australia, Screen NSW and the IP Awareness Foundation (IPAF).

There are no simple solutions but plenty of ideas and proposals were floated by producers, distributors and one VOD platform.

UK screen industry consultant Pete Buckingham told the several hundred attendees the “cinema system and value chain” are under pressure right across Europe, and, by implication, in Australia as well.

“There are more films than there have ever been before and they have never been more accessible,” said Buckingham, a distribution and exhibition veteran who has worked for the UK Film Council, Film Four, Oasis Cinemas and Virgin Vision.

He noted the EU Commissioner for the Digital Economy and Society is considering a proposal to create a single digital film market in Europe, to the horror of distributors and exhibitors. If adopted, that would mean the dismantling of territorial rights so if a film were released online in Poland, for example, it would be available European-wide.

Buckingham declared he is no fan of SVOD platforms, arguing they devalue films by offering a huge range of content for as little as $10 per month. "You are selling your soul to the devil," he said. He recalled that when Netflix launched in European markets two or three years ago there was a virtual gold rush as the streaming giant bought libraries from local distributors. That deal-making is over, he said in what may be a harbinger for Australian distributors that have licensed films for Netflix’s Oz/NZ service.

On a positive note, Buckingham suggested the rising power of China, whose B.O. is expected to overtake the US by 2017, would affect the types of films produced in Hollywood. As a result, he predicted that would create opportunities for local films and alternate content.

Screen Australia COO Fiona Cameron told the forum the requirement for films to be exhibited in public cinemas to qualify for the 40% producer offset is “distorting the market” because some films are being released theatrically that are more suited to other forms of distribution.

The agency is discussing with the federal government amending the offset rules to make them “platform-neutral.”

Dendy/Icon CEO Greg Hughes floated the idea of booking some Australian and other independent films for a fixed time frame rather than on the traditional open-ended basis.

He said this would enable distributors and exhibitors to market films to patrons for a defined time, whether a one-off event screening, or for one or two weeks.

In tandem with that initiative he proposed the introduction of the premium VOD window, meaning certain films would be released online either day-and-date with cinemas or one or two weeks later.

Hughes observed that research he commissioned before launching Dendy Direct showed the majority of people were prepared to pay $15-$20 to stream first-release films if they were available at the same time as the cinema release or within two weeks.

But he warned against a general collapsing of the 120 days window between theatrical and home entertainment, arguing that would “destroy value.”

Screen Australia commissioned a survey last year which found 48% of respondents were only willing to pay $3 or less to rent a movie online and 63% were prepared to buy a movie if it cost $10 or less.

Asked if she feared Australia is in danger of losing the younger generation, many of whom see nothing wrong in file-sharing, IPAF executive director Lori Flekser said, “We are in the process of doing that.”

EOne’s Jude Troy described the gambit of releasing The Mule on EST platforms last November and on DVD, Blu-ray and online rental two weeks later, bypassing cinemas, as a success.

“It served its purpose,” she told IF, noting the release was strongly supported by JB Hi-Fi, Apples iTunes and VOD platforms and eOne had been able to amortise its marketing costs. She said eOne will take a similar path with other films but has not yet decided on the titles.

See Pictures’ Jamie Hilton lamented the high level of global piracy of Josh Lawson’s The Little Death and the stress of operating in a market where distributors hold the balance of power.

“Producers and investors are hurting a great deal, so we’re looking for new business models,” he said. His low-budget initiative Ticket to Ride, which produced The Little Death, is designed to fund films without having to sell off  “most rights for very little upfront.”

An admirer of 52 Tuesdays, The Babadook and Wyrmwood: Road to the Dead, Hilton said he is looking for innovative material which others may find risky. One or two titles will be funnelled through the Screen Australia-funded direct-to-digital initiative.