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Indie Firestorm: What if VOD Revenue Was Made Public?

Issue 40 REP Escape from Tomorrowland - H 2013
"Escape from Tomorrowland" has earned almost as much from VOD/digital as from theaters.

Producer John Sloss releases "Escape From Tomorrowland" numbers and ignites a debate over financial disclosures done without context.

This story first appeared in the Nov. 15 issue of The Hollywood Reporter magazine.

Some small distributors aren't taking so kindly to John Sloss daring them to release their VOD numbers, which generally have been a closely guarded secret. Sloss, the maverick producer, lawyer and sales agent who runs Cinetic Media, says transparency is the best policy.

Putting his money where his mouth is, Sloss on Oct. 28 released the numbers for Escape From Tomorrow, the horror feature shot without permission at Disneyland and Walt Disney World. The low-budget film, released through Sloss' Producers Distribution Agency, had earned $139,334 in theatrical revenues and $120,560 in VOD/digital grosses by Oct. 25 for a total of $259,894 during its first two weeks.

VIDEO: Sundance Hit 'Escape From Tomorrow' Continues to Jab at Disney

While insiders call these numbers "fine" for a microbudget film like Tomorrow, many independent distributors argue that publicly releasing VOD results isn't wise, given the lack of industry consensus about the context that should surround such figures. And, according to Magnolia president Eamonn Bowles, the general public does not yet have a clear grasp on what VOD numbers mean, even as more films are being watched this way. "I don't see any real reason the public needs to know these numbers, especially out of context," Bowles says. "It doesn't lead to clarification, it leads to more confusion."

Financial success on VOD is dependent on several factors, including the film's budget and marketing costs. Without these numbers, Bowles says, VOD results don't provide a complete picture. Bowles also points out that gathering numbers related to a digital release can be much more difficult than theatrical numbers. He says he doesn't receive accurate stats from some platforms for more than a month. IFC Films, which has been a leader in VOD along with Magnolia, declined comment.

REVIEW: Escape From Tomorrow 

Sloss' challenge, however, did spur one company, RADiUS-TWC, to release a VOD figure just days later. The Weinstein Co.'s boutique label announced that Man of Tai Chi, the Keanu Reeves-helmed action pic, had grossed $1.5 million across digital, satellite and cable platforms from its Sept. 27 launch through Nov. 1. RADiUS-TWC co-presidents Tom Quinn and Jason Janego, who scored a VOD win with Bachelorette in 2012, praise Sloss for his announcement but say that a better way to measure success on VOD would be to create a Top 100 list using a number that combines a film's multiplatform earnings.

After all, Quinn says, the public needs to understand that it isn't fair to compare theatrical and VOD numbers. The return on VOD dollars can be almost double that of theatrical, and the cost of chasing a VOD dollar is one-third of the cost of luring moviegoers to a theater. "You can't lump all those numbers together," Quinn says, adding that Hollywood is close to figuring out a system that would accurately explain and give context for VOD releases.

STORY: Disney's Non-Strategy Strategy to Combat Unauthorized Disneyland Horror Movie 

But it's not only the public that has something to learn. "The industry, frankly, has got to get with the program and get educated as to what these numbers mean," he says. "We've been doing this for six years. We've banged our heads pretty hard against a brick wall to try to give VOD the respect it deserves."

E-mail: Rebecca.Ford@THR.com
Twitter: @Beccamford