AFM: Streaming Sales Provide Bright Spot for Indies

AFM Market Floor 2019
Courtesy of IFTA

COVID-19 has shut down cinemas and made pre-sales tough, but a booming online market has driven up demand: "During lockdown, people as captive audiences binge-watched more."

If there's one silver lining for the film industry to the coronavirus pandemic, its VOD.

COVID-19 has closed theaters and made the pre-sales business tricky. Theatrical distributors worldwide are cautious about buying anything they'll need to bow in cinemas, given the uncertainty about when, and how, movie theaters in lockdown territories will be allowed to re-open.

But online, things are booming.

Streaming platforms have seen a surge in subscribers as homebound viewers binge-watch their way through online libraries. Demand is way up, both with global giants like Netflix, Amazon Prime, Disney + and WarnerMedia's HBO Max, and with smaller regional and niche players.

"During lockdown, people as captive audiences binge-watched more, but also started getting tired with their big mainstream services," says Wendy Bernfeld, CEO of Rights Stuff, a digital services consultancy which also buys films for international VOD platforms. "They had time to look at more niche or thematic services such as [arthouse specialist] Mubi, [LGBTQ+ platform] OutTV, or [horror-focused] Shudder. Things that they'd normally either not have found or had time to try...That's meant a much larger audience for these niche players."

A larger audience has meant more cash for acquisitions, and more binge-watching has meant more buyer demand at AFM. And not just for the bigger budget projects that typically dominate the market. Smaller movies are also getting snatched up.

"I see projects coming across my desk now that I would have passed on two years ago, but now I'm taking another look at them," says Arclight Films CFO Brian Beckmann. "The demand for product from the streaming market, especially from AVOD (advertising-supported VOD) is exploding. The genre stuff, the sub-$5 million or sub-$2 million action films are really getting a lift now. There's more of a market for that than ever before."

"We've seen a threefold increase in searches for VOD rights on our platform since the start of the pandemic," notes Bill Lischak, CEO of RightsTrade, a B2B online licensing platform which is expanding to meet the demand. This week the company unveiled a new collaboration with cloud video conferencing and events provider BlueJeans by Verizon, to add BlueJeans’ video conferencing capabilities to RightsTrade platform and better share high-quality video assets when pitching projects.

Even among the bigger, mainstream platforms — both the global giants and regional powerhouses like France's Canal+ or Viaplay in Scandinavia — there's been an increase in demand with buyers ready to go outside their comfort zones and take risks on indie titles.

"They have shown a willingness to expand also to other genres and formats, such as to buy more indie and arthouse movies, and also to buy from broader sources than their usual pipeline," says Bernfeld. "We've also seen more willingness to buy library titles. Normally the sweet spot for SOVD was films roughly 2-6 years old, and then AVOD kicked in. Now we're seeing platforms buy features from even 10 years back," she says, pointing to Netflix's recent deal with France's MK2 for rights to a dozen cult international arthouse titles, from the likes of François Truffaut, Michael Haneke, and Emir Kusturica. Regulation in Europe, which requires streaming services to devote at least 30 percent of their on-demand libraries to locally-made content, is also helping drive acquisitions.

That's all good news for the sellers at all-virtual AFM this week. But they shouldn't get comfortable. Few expect the current VOD buying boom to continue in a post-COVID world.

"We're not going back to the old era where you'd walk through the American Film Market and see thousands of these generic titles and think 'where's the home for all this product?'" says Beckmann. "When cinemas open again, I think we'll see a move away from the low-budget stuff back to bigger, more theatrical movies."