VOD Views – February 10, 2014


It’s not VOD that’s changing TV as we know it – that happened thanks to the DVR, which caused the biggest threat to TV advertising since the remote control.

But the revenue models are all starting to fall apart at the extreme pointy end of the market of tech-aware consumers who use VOD. If you’re Netflix and you have a squillion users paying you a fee for access directly, you’re in the perfect position. You can make whatever shows you want and don’t have to please advertisers (because there aren’t any) or censors (because you don’t have timeslots).

It’s slightly different for cable companies, who theoretically buy shows from networks or production companies and make a profit because they have subscribers, but if you’re a free to air TV station you’re stuck. You need advertisers to operate, but your audience doesn’t.

So everyone’s scrambling for a way to make money out of advertising connected to VOD services when nobody’s watching it anymore, and ideas such as this are becoming more common.

Speaking of Netflix, the season two trailer of their political drama House of Cards is online, and it looks great, with Kevin Spacey as looking as deliciously evil as he did first time around.

There’s an inherent tension in the video on demand field. For half a century the studios have had very entrenched relationships with exhibitors (cinemas) and their biggest market, TV*. Exhibitors had a very large say in when titles came out on VHS and DVD back in the day, but VOD is something else again.

Consumers don’t expect it to be just another stop in the supply chain a movie goes through, from cinema to DVD to Pay TV to free TV, finally dying on some digital service like AppleTV or Hulu. When a movie’s out in cinemas, the digital generation expects to be able to watch it on their personal screen or system of choice. This is an opinion and not fact (although you’ll find plenty of facts to support the argument), but it’s probably one of the biggest factors contributing to digital piracy. We live in the dawn of an age of consuming media on our terms – not theirs.

So there’s a lot of pressure on studios to make movies available on multiple platforms from the get go. Theatrical exhibitors hate the idea because instead of having to go to the cinema and spend a fortune on their three-hour-old popcorn and flat post-mix pop we can stay home, pay the same (or less) and call a movie up in our own living room.

So the question facing studios, producers and distributors is who has more buying power and will thus set the terms? Day and date theatrical and VOD releases are becoming more common – especially for small movies – and you only have to search for current release DVDs on Amazon to see the ubiquitous ‘see it now while it’s in theatres’.

But none of that has stopped exhibitors and studios butting heads over the issue, as they were as far back as last June. Disney and Sony were the ones caught out, testing the viability of premium movie VOD releases in South Korea when they were getting their big theatrical launches elsewhere.

The studios wouldn’t say what gains they made, but The Wall Street Journal reported that a South Korean cable provider sold 30 percent more on new releases out in theatres at the same time.

US theatrical exhibitors jumped up and down and threatened to scream and scream until they made themselves sick, The National Association of Theatre Owners complaining that it ‘muddies the value proposition’ for consumers. Might that translate to ‘it eats into our bite at the cherry?’

* Surprised to read that? Consider this – a studio pays a lot of money to make (or buy) a movie. It may or may not recoup its cost at the box office.

But it also signs a deal with a TV network (often under the same corporate umbrella in recent times) to play the movie and command huge fees for doing so. Add up a few years or decades or charging TV networks to play the same movies a few dozen times over and it adds up, with no further outlay. It’s all explained here;

Ghost Team One
Paramount’s new Home Media distribution channel released this one as an exclusive – to VOD – a few weeks back. A real surprise package, “Ghost Team One” is a welcomingly unique horror-comedy about a couple of guys who, so they can show-off and play hero to the girl that’s over, pretends there’s an evil spirit lurking inside their home. They set out capturing footage for a documentary about a murder that they say took place years ago, only to end up catching some real boogie woogies in there lens. In an amusing twist, the trio quickly discover that the girl isn’t just real, she’s got a crush on the boys. Think the entire ‘levitating Sigourney Weaver scene’ in “Ghostbusters”, running for an hour-and-a-half and you get a good idea of what to expect here. This one is definitely worth a peek-a-boo. – C.M.