The Digital Revolution Is Here (Finally, Maybe)...

Ever since the internet was invented we have been hearing about the game-changing effect that digital media is going to have on the entertainment business. It seems it’s all finally starting to happen, says Tim Riley, overseas at least anyway.

Hundreds of tech writers have waxed earnestly and lyrically on blogs, expounded religiously on TED Talks and written breathless best-selling books about the new economics that will emerge. Our language has been ‘enriched’ by dozens of new words and catch phrases describing the brave new world. But like the economic ‘long tail’ itself, the promised nirvana never really eventuated. Until now that is. Well, maybe not in NZ…

For the last two years I have made the long journey to the Toronto International Film Festival (TIFF). The first year as a lawyer attached to a couple of films and last year as a producer looking for money to complete the budget in a NZ-Canada co-pro I am producing with Ant Timpson. It was at TIFF in 2012 that I first became aware that the industry shake-up long promised by digital media finally seemed to be happening in a real way. I saw a number of panel discussions at TIFF in 2012 featuring representatives of companies which were engaged in overturning the reigning paradigms of film distribution. These people describe what they are doing with phrases like ‘theatrical on demand’, ‘semi-theatrical release’, and ‘hybrid distribution’. They are the pioneers of day and date releasing, which is the antithesis of the standard approach of staggered windows and territories. They are able to use the models that they do because of the massive growth in the cable video-on-demand (VOD) market in America and the rise of companies like Netflix. These companies recognise that not everyone wants to go to a cinema to watch a film, but they also don’t want to be punished for their choice by having to wait months for it to appear on DVD. And they have noticed that there are a lot of people who will even pay extra to see a film before it is released in theatres. They also recognise that not all films are suited to theatrical releases and that making a splash with a theatrical release and then drifting out to a slow death on DVD, VOD, Pay-per-view TV, Pay TV and Free TV is not the only way to go.

The Mark Cuban-owned Magnolia Pictures is acknowledged as one of the leading exponents of digital distribution in the US. If you go to Magnolia’s site you will see that its upcoming titles all list a release date for both VOD and theatrical and in almost all cases it is the same date (with some titles opening first on VOD). Magnolia (through its genre arm – Magnet) was the production funder and sales agent for Ant Timpson’s film, ABCs of Death, which premiered at TIFF in 2012 and was one of the reasons I was there that year. ABCs, being a low-budget horror anthology (26 different directors in a dozen different countries) was always going to be an interesting selling proposition. Theatrical was never going to be a significant part of the sales strategy for the film, but (and this is my point really), theatrical has ceased to be a significant part of the sales strategies of a large number of films in the US market now. And non-theatrical exploitation is what Magnolia does very well. (Although that is not to say Magnolia does not do theatrical – far from it. In fact the wider group owns a cinema chain.) ABCs has done extremely good business on VOD and Netflix in the US. It also sold 20,000 units on DVD in its first week at Walmart before unfortunately getting pulled due to a customer complaint about the content. Magnolia has certainly made good profits on the title as will all back-end participants (which in this case is each of the 26 directors as well as Ant’s production company). A sign of the success of the film is that this year in September I will be at Fantastic Fest in Austin, Texas for the world premiere of ABCs of Death 2!

All of this is all very well if you are making a film that can sell in the US (a market that NZ films have always struggled in). So what of our own market? What are the alternative release strategies available to us here? The answer to that question is that although they are still extremely limited, they are getting better. Netflix is still not available to NZ subscribers (other than those who can be bothered going through the rigmarole of disguising their IP address). We do have Quickflix but that is extremely limited. Vimeo is available as a VOD platform, and NZFC have recently set up a VOD service for the films it controls the rights to. But these are not destination sites in the way that Netflix is. However, Telecom has just launched its new VOD service called Lightbox, and on first look it seems quite impressive. It (not surprisingly) does not have anything like the depth and breadth of content Netflix has, but it is better than I thought it would be and seems a good start. I think there is still a major culture shift that needs to occur before New Zealanders start using digital services such as this en masse, but first things first, and I feel cautiously optimistic that we are heading in the right direction.