Snowpiercer, VOD, and indie film financing

Over the past few years, some indie films have been experimenting with day-and-date release in theaters and on VOD services like iTunes. It has always made a lot of sense to me: you capitalize on your theatrical marketing spend when you put movies out on multiple platforms at once, instead of having to spend multiple times to market the theatrical release and then the VOD and DVD releases.

Studios had always been hesitant to go too far with this strategy because of blowback from the theater owner cartel and because studios are just generally a bunch of conservative folks who need to be dragged kicking and screaming into the future. It didn't help that the only movies that typically received this type of treatment ended up being some of the most obscure movies out there; it led to the self-fulfilling prophecy that this was a dumping strategy for movies with little or no market.

Some forces are finally converging to make this strategy more attractive, though. For one thing, the DVD release window continues to shrink in value as the DVD purchase market fades away. As with CDs, so go DVDs. Secondly, the theatrical film business is flat, and for indies it is likely declining as more share of theatrical spend is for blockbuster movies. The competition for moviegoing as a form of entertainment is increasing, and most of it comes from a computer people carry with them all the time and that turns on with a tap of a button. Other competition comes from a larger but also more accessible screen, the giant LCD TV in people's living rooms. Desperate times call for desperate measures.

Here comes the poster child for the revolution. Snowpiercer is the widest multi-platform release ever. It wasn't quite day-and-date, but two weeks after it was released in theaters, it was available on most VOD services like iTunes and cable operators like Comcast and DirecTV.

Some interesting tidbits:

But RADiUS-TWC is taking steps to create a new language around digital platform revenues, with Snowpiercer earning an estimated $1.1 million from VOD this past weekend, nearly twice as much as the $635,000 it earned in theaters. “From a layman’s perspective these numbers are possibly not that interesting,” admits RADiUS-TWC co-president Tom Quinn. “But from an industry perspective, it’s a game changer.”
Why? For a distributor, VOD is both cheaper and more profitable. “That $1.1 million gross is actually worth almost double to me in terms of how it nets out in our bottom line,” says Quinn, who claims that the film’s real-value weekend gross is thus about $2.6 million, enough to land in the box-office top-10.
This strategy also didn’t require a traditional TV spend. “We are being promoted on TV, but we are being promoted on TV to consume,” he explains. “We have a TV campaign, but it’s in service of actually selling the movie to be purchased. That’s very different.”
Also, VOD—with access to 85 million homes—doesn’t have the same drastic theatrical drop-offs from week to week.

More from Variety:

The picture has racked up an impressive $3.8 million over its first two weeks on VOD, while pulling in a respectable $3.9 million over five weeks of in theaters.

The lowered marketing cost is huge here, it's difficult to overstate just how deep a hole a studio digs for an independent film when the studio takes out a broad ad campaign, including television ads, to promote its theatrical release. The irony is that it's not clear that an expensive TV campaign ever made sense for all but the biggest indie films, and the increased competition for the theatergoing experience makes that even less logical.

Perhaps the total potential audience for your movie is not massive, and frankly, for many indie movies it won't be. In this age of increased competition for attention, being able to keep your marketing costs at a minimum gives your movie more opportunity to make a profit at whatever percentage of your potential audience you manage to convert.

The internet does not increase the total user attention in the universe, it only makes it easier to tap into it. There are still only 24 hours a day in the lives of each of the people in the world, and that finite resource is being subdivided more and more. It's one reason Hollywood is so eager to please the Chinese market with plots that are China-safe; it's one of the few ways to grow the base of paying customers by a magnitude of order.

Liam Boluk writes about some strategies for indie filmmakers:

As a result, VOD and digital distribution should represent the indie priority – not just another non-theatrical channel. However, this means far more than pursuing a common release date across all mediums, penetrating a wide variety of different providers (Netflix, Amazon, Apple etc.) or standing up a direct-to-consumer distribution portal. Indie studios will still need to find a way to stand out among the 500+ other indie titles per year (not to mention thousands of pre-existing major and indie catalogue titles). What’s more, revenues will still be too slight to fund elaborate marketing campaigns nationally. As such, studios will need to establish and cultivate direct-to-consumer relationships through which they can inform individual consumers of any new releases that might be of interest and help guide them to the appropriate distributor (e.g. Netflix, iTunes etc.). If this is done well, indies may even be able to use consumption and interaction data to guide future film investment decisions (as the major studios, as well as OTT video providers do).


With RADiUS-TWC sharing this data on its VOD success, perhaps the stigma of having your movie released on multiple platforms simultaneously will diminish. The next generation doesn't see it as a black mark if your movie is released on multiple platforms, they see it as outdated and absurd that more movies and TV shows aren't available on all the screens all the time. While your movie opens to largely empty theaters in an exclusive theatrical window, they sit at home watching videos on YouTube.

While I personally still love and prefer to go to the theater to sit in a darkened theater with other people to see movies projected on a giant screen, I support whatever release strategies continue to finance filmmaking. The windowing strategy isn't going away anytime soon, but it makes less and less sense as we transition from the age of artificial scarcity to one of uncontrollable abundance.