Biz watching as indies test new output ideas
Biz watching as indies test new output ideas
June 3, 2005
A new theater is opening June 17 in Manhattan's Greenwich Village, where the Waverly Theatre used to be. It's called the IFC Center, and it isn't just the new flagship art house for IFC Films and IFC's indie cable channel. It's going to be another wedge in the destruction of the old media distribution paradigm.
Change is in the air. Seismic change. Right now the mavericks grabbing headlines are 2929 Entertainment's Mark Cuban and Todd Wagner, owners of the 209-screen Landmark Theatre chain, indie distributor Magnolia Films and the high-definition cable channel HDNet. Cuban and Wagner are pioneering new ways of releasing movies and home videos. On April 22, they premiered Alex Gibney's documentary "Enron: The Smartest Guys in the Room" at L.A.'s Nuart Theatre; they also aired it exclusively on their HDNet channel on DirectTV. Theater chains around the country protested by not booking the movie. Nonetheless, it's a word-of-mouth hit (more than $2.6 million to date) playing in 150 theaters. Next, 2929 plans to release six digital Steven Soderbergh movies day-and-date in theaters and on TV and home video.
Theater owners and distributors are watching these experiments closely, even as they fiercely debate their own options -- behind closed doors. The entertainment industry already has been turned on its head.
Domestic theatrical is still the heavy locomotive driving the train, establishing movie titles before they hit other markets, but the international boxoffice has far outstripped domestic, and DVD sales are now the biggest revenue stream -- some $16 billion last year, almost double domestic theatrical revenue.
This swiftly changing landscape is not for the faint of heart. It takes guts to break the mold. And mistakes are expensive. The studios, terrified of piracy, are chasing more global day-and-date launches and are inexorably shortening the gap between theatrical and home video release. "Every time the studios shrink the window, the TV and video values go up," says one marketing executive. But the pace of change is slow for these unwieldy corporate monoliths.
"The studios can afford the prints and advertising to put a picture out theatrically," entertainment attorney Linda Lichter says. "That performance will carry through to DVD. But small indie companies may not be able to release a movie everywhere. Put out the DVD right away around the country, and it gets the benefit of the lead publicity. You can save money with economies of scale."
That's why the more nimble independents are taking the first steps in this revolution. The next step for art house distributors is to take their limited marketing dollars and push movies straight from the Paris Theatre in Manhattan to video-on-demand and DVD.
Focus Features experimented with overlapping theatrical and DVD releases for its Oscar contender "Lost in Translation," with positive results. Instead of wasting money on a short-lived theatrical run for the six-hour Italian success d'estime "Best of Youth," which Miramax Films released, one Warner Bros. executive opines, "Get it to DVD before I've forgotten it."
IFC is going to be the next bellwether. Launched by Cablevision in December 2000, IFC Films started out as a modest-sized producer of art films ("Boys Don't Cry," "Monsoon Wedding") that were intended to air on the cable channels IFC and Bravo. "We have the luxury of being able to sell our own movies to our own network," says IFC Entertainment president Jonathan Sehring, who quickly moved into distribution with such films as "Y Tu Mama Tambien," "Touching the Void" and "The Ballad of Jack and Rose." Now Sehring is adding exhibitor to his many hats.
While he has no plans to "expand beyond one facility," says Sehring, he sees other changes ahead. "We're going to alter our business plans over the next six to eight months. We feel strongly about video-on-demand as a future. As we shorten the window between DVD and theatrical, you're going to see some sort of mixture and blend of VOD."
As Sehring sees it, "When films open theatrically, they get national press attention for the first two to three weeks, and then move to B and C markets two to four months down the line. Aside from releasing on DVD earlier, we can take advantage of new technology on our cable channels via satellite and experiment with VOD day-and-date a week or two after the opening."
Capitalizing on the IFC Center is key to Sehring's strategy. A movie would launch with a videotaped special event at the IFC Center, says Sehring, which would be available, along with the movie, on a VOD basis to subscribers through IFC Films on Demand just one week after the premiere. This would have little effect on DVD sales, Sehring posits, because "most people buy and collect DVDs that they want to own, more than they ever did on tape. It might effect rentals, not sales. VOD is here and gone, like a rental."
The question is, which movie will be IFC's test case? Will Sehring risk a potential winner, like Miranda July's festival hit "Me and You and Everyone We Know," or experiment with a smaller fish like the Sundance mock-docu "CSA: The Confederate States of America," which depicts the alternate America that would result if the Confederacy had won the Civil War?
The other powerful cable channel that is looking at these issues is HBO. At Cannes, HBO Films chief Colin Callender announced Picturehouse, HBO's new theatrical distribution co-venture with New Line Cinema.
"Everyone is looking at windows," Picturehouse West Coast marketing chief Dennis O'Connor says. "You could look at an HBO airing as a giant sneak preview. We've talked about it. Would the public be willing to pay for something after they've had it free on TV? We won't know until somebody does it in a real way with the right film."
The art house consumer tends to be an early adopter of new technology, like TiVo. Survey the behavior of your friends and families, and the trend is clear: As more and more kids -- the prime target moviegoers -- order their movies through Netflix, Movielink computer downloads and cable VOD, theatergoing is taking a hit. (Even with the summer in full swing, admissions for the year are down 7%.)
What everyone knows, but few want to admit on record, is that day-and-date delivery of movies through every platform -- with different pricing -- is inevitable. As Landmark Theatres marketing chief Ray Price puts it, "This is the year that the walls of Jericho could come tumbling down."
Change is in the air. Seismic change. Right now the mavericks grabbing headlines are 2929 Entertainment's Mark Cuban and Todd Wagner, owners of the 209-screen Landmark Theatre chain, indie distributor Magnolia Films and the high-definition cable channel HDNet. Cuban and Wagner are pioneering new ways of releasing movies and home videos. On April 22, they premiered Alex Gibney's documentary "Enron: The Smartest Guys in the Room" at L.A.'s Nuart Theatre; they also aired it exclusively on their HDNet channel on DirectTV. Theater chains around the country protested by not booking the movie. Nonetheless, it's a word-of-mouth hit (more than $2.6 million to date) playing in 150 theaters. Next, 2929 plans to release six digital Steven Soderbergh movies day-and-date in theaters and on TV and home video.
Theater owners and distributors are watching these experiments closely, even as they fiercely debate their own options -- behind closed doors. The entertainment industry already has been turned on its head.
Domestic theatrical is still the heavy locomotive driving the train, establishing movie titles before they hit other markets, but the international boxoffice has far outstripped domestic, and DVD sales are now the biggest revenue stream -- some $16 billion last year, almost double domestic theatrical revenue.
This swiftly changing landscape is not for the faint of heart. It takes guts to break the mold. And mistakes are expensive. The studios, terrified of piracy, are chasing more global day-and-date launches and are inexorably shortening the gap between theatrical and home video release. "Every time the studios shrink the window, the TV and video values go up," says one marketing executive. But the pace of change is slow for these unwieldy corporate monoliths.
"The studios can afford the prints and advertising to put a picture out theatrically," entertainment attorney Linda Lichter says. "That performance will carry through to DVD. But small indie companies may not be able to release a movie everywhere. Put out the DVD right away around the country, and it gets the benefit of the lead publicity. You can save money with economies of scale."
That's why the more nimble independents are taking the first steps in this revolution. The next step for art house distributors is to take their limited marketing dollars and push movies straight from the Paris Theatre in Manhattan to video-on-demand and DVD.
Focus Features experimented with overlapping theatrical and DVD releases for its Oscar contender "Lost in Translation," with positive results. Instead of wasting money on a short-lived theatrical run for the six-hour Italian success d'estime "Best of Youth," which Miramax Films released, one Warner Bros. executive opines, "Get it to DVD before I've forgotten it."
IFC is going to be the next bellwether. Launched by Cablevision in December 2000, IFC Films started out as a modest-sized producer of art films ("Boys Don't Cry," "Monsoon Wedding") that were intended to air on the cable channels IFC and Bravo. "We have the luxury of being able to sell our own movies to our own network," says IFC Entertainment president Jonathan Sehring, who quickly moved into distribution with such films as "Y Tu Mama Tambien," "Touching the Void" and "The Ballad of Jack and Rose." Now Sehring is adding exhibitor to his many hats.
While he has no plans to "expand beyond one facility," says Sehring, he sees other changes ahead. "We're going to alter our business plans over the next six to eight months. We feel strongly about video-on-demand as a future. As we shorten the window between DVD and theatrical, you're going to see some sort of mixture and blend of VOD."
As Sehring sees it, "When films open theatrically, they get national press attention for the first two to three weeks, and then move to B and C markets two to four months down the line. Aside from releasing on DVD earlier, we can take advantage of new technology on our cable channels via satellite and experiment with VOD day-and-date a week or two after the opening."
Capitalizing on the IFC Center is key to Sehring's strategy. A movie would launch with a videotaped special event at the IFC Center, says Sehring, which would be available, along with the movie, on a VOD basis to subscribers through IFC Films on Demand just one week after the premiere. This would have little effect on DVD sales, Sehring posits, because "most people buy and collect DVDs that they want to own, more than they ever did on tape. It might effect rentals, not sales. VOD is here and gone, like a rental."
The question is, which movie will be IFC's test case? Will Sehring risk a potential winner, like Miranda July's festival hit "Me and You and Everyone We Know," or experiment with a smaller fish like the Sundance mock-docu "CSA: The Confederate States of America," which depicts the alternate America that would result if the Confederacy had won the Civil War?
The other powerful cable channel that is looking at these issues is HBO. At Cannes, HBO Films chief Colin Callender announced Picturehouse, HBO's new theatrical distribution co-venture with New Line Cinema.
"Everyone is looking at windows," Picturehouse West Coast marketing chief Dennis O'Connor says. "You could look at an HBO airing as a giant sneak preview. We've talked about it. Would the public be willing to pay for something after they've had it free on TV? We won't know until somebody does it in a real way with the right film."
The art house consumer tends to be an early adopter of new technology, like TiVo. Survey the behavior of your friends and families, and the trend is clear: As more and more kids -- the prime target moviegoers -- order their movies through Netflix, Movielink computer downloads and cable VOD, theatergoing is taking a hit. (Even with the summer in full swing, admissions for the year are down 7%.)
What everyone knows, but few want to admit on record, is that day-and-date delivery of movies through every platform -- with different pricing -- is inevitable. As Landmark Theatres marketing chief Ray Price puts it, "This is the year that the walls of Jericho could come tumbling down."
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