New Distribution Windows Change Studios’ Profit Equation

October 18, 2011 · Posted in M&E Daily, M&E Exclusive · Comments Off 

by Marcy Magiera

As networks and studios take advantage of myriad new ways to distribute content, they face greater challenges in managing windows to extract maximum profit from each transaction, said executives speaking at Variety’s Entertainment and Technology Summit at the Ritz-Carlton Hotel in Marina del Rey, Calif. on Monday.

Speaking on a “Trendsetters in Entertainment Distribution” panel, David Spiegelman, president of domestic television and digital distribution for Relativity Media, discussed the studio’s decision to give its movies to Netflix for streaming in the pay TV window, bypassing cable programmers HBO, Showtime, Starz, and others. “There’s a huge benefit for us to be on Netflix,” said Spiegelman, noting that while Netflix has a big audience – more than 20 million people subscribe to Netflix’s streaming service – the films will get less consumer exposure than they would in HBO rotation, for instance, preserving value for buyers in the downstream windows including basic cable.

“You can never have enough buyers,” said panelist Scott Koondel, president of distribution for CBS. “Right now it’s about getting paid the most for every transaction.”

For programmers like Showtime and Starz, that is driving a move to replace theatricals with original content so that they can control both the exposure and revenue of the properties in multiple windows, said Koondel and John Penney, executive vice president of strategy and business development for Starz.

Because of growing international markets and new distribution platforms, “you can produce shows for network and make money right out of the gate,” instead of waiting for syndication, said Koondel.

“Pricing is critical,” said Penney. “Whoever is setting the price has to get it right to generate enough revenue to finance new content.” He used as an example Netflix’s acquisition of the first-run series “House of Cards,” which according to Penney’s estimate, will cost one month’s revenue from all 25 million Netflix subscribers to finance.

For content owners, that means developing new distribution outlets, such as Facebook, even though it isn’t clear whether consumers want to watch movies over social networks, said Spiegelman. “If you can tap into a very small percentage of that huge platform, you could be generating so much revenue,” he said. “We want to train behavior now.”

Conference keynoter Kevin Mayer, executive vice president of corporate strategy and business development for The Walt Disney Co., also addressed windows management. As an example, he said the studio now views its ABC network as simply the first window of distribution for its TV content. “Network used to be the business,” he said. “Now content is the business.”

Prescreen Service Positions Streaming Movies as Promotional Vehicles for Studios, Filmmakers

October 3, 2011 · Posted in M&E Daily, M&E Exclusive · Comments Off 

by Marcy Magiera

New movie streaming service Prescreen promises content owners and filmmakers that its social networking model will deliver “blockbuster exposure on an indie budget.” But scratch the surface and the streaming site, founded by ex-Groupon exec Shawn Bercuson, looks as much like a market research tool as a distribution platform.

The site (www.prescreen.com) will keep films in its inventory for just 60 days; at the end of that period, Prescreen will provide content owners with a detailed “performance report” with aggregated regional, demographic, and Internet usage information about the people who watch each film. That sort of information is valuable for plotting theatrical, TV, and other release plans.

“Eventually, we want to amass the audience of a $20 million marketing spend,” says Prescreen founder and CEO Bercuson, who previously was vice president of business development with Groupon. “But since the films are on for only 60 days, [participation] could be a promotion thing, rather than a distribution thing.”

The site operates on a straight revenue sharing basis, with Prescreen and content owners splitting rental fees. Prescreen does not pay anything else to content owners or acquire any rights to the films it streams.

Prescreen is designed to appeal to cinephiles who value being the first to see a film and pass recommendations along to friends. One film per day is added to the site, and each is available for on-demand streaming for just 60 days. Prescreen sends a daily email featuring the new movie added that day to subscribers. It has 30,000 subscribers after two weeks in operation, according to Bercuson.

Movies cost $4 on their first day of availability on the site. The price doubles to $8 on days two through 60. Once a user starts to watch a movie, there is a 48-hour viewing period. If a user is among the first 5% of orders for a film, they earn a free movie. This creates an incentive for users to share the film through email and social networks, says Bercuson.

Prescreen, which launched Sept. 14, also is spending $100,000 a month online to advertise its service, says Bercuson. The site is drawing content from Kino Lorber and The Film Collaborative, and is talking to other companies, including major studios, Bercuson adds.

Filmmakers can submit their work directly to Prescreen, which chooses tiles based primarily on them having some sort of previous exposure, such as festival play.

Films featured on the site include high-profile documentary “The Gloucester 18”, about the pregnancy pact between a group of Massachusetts high school girls, and “The Robber”, which showed in the New York Film Festival and Berlin International Film Festival.

So far, several films have thousands of trailer views, but the most popular has just 77 paid rentals.

At Blu-Con: Studios Ready 3D Holiday Push, Frame Release-Window Debate

November 3, 2010 · Posted in M&E Daily, M&E Exclusive · Comments Off 

By Marcy Magiera

BEVERLY HILLS, Calif. — DEG: The Digital Entertainment Group couldn’t have gotten a bigger headliner for its Blu-Con 2010 conference here or a more ringing endorsement for the Blu-ray format than it got from filmmaker James Cameron.

Cameron appeared at the Nov. 2 event at the Beverly Hilton with producer Jon Landau to walk attendees through Pandora as seen on the “Avatar” Three-Disc Extended Collector’s Editon, due Nov. 16 from Fox. He lavished praise on the format as he showed features created for the new release, including additional footage rendered specifically for the Blu-ray and new documentaries.

“On Blu-ray, you can see the one-to-one relationship of what the actors did to how it was translated in the movie,” Cameron said.

“We know that going forward, more consumers are going to see movies in their homes. Blu-ray is the best way to do that,” said Landau, who with Cameron spoke for a full hour. “Avatar”’s earlier release in its original theatrical version has already shattered all format records by selling more than 8 million Blu-ray units worldwide and 5 million in the U.S.

Perspective on 3D

Though “Avatar” will not see general release this year in Blu-ray 3D (i.e., outside a hardware bundle), as many as two dozen titles will, said Blu-Con participants. In a DEG-coordinated effort, 10 titles from Warner, Sony and Disney will be released at retail on Nov. 16 (the same day as the non-3D “Avatar”).

DEG is creating a Blu-ray 3D demo reel that will be available to stores before Black Friday, and “3D University,” a guide for use by retailers and the press in educating consumers, said Kris Brown, Warner’s VP of worldwide high def market expansion and leader of DEG’s 3D task force.

“Any indications that content was struggling were premature,” Brown said. Nevertheless, “some studios are sitting on some content and could be a little more liberal” with releases, he said.

Read more

Amazon Offers Keys to Blu-ray Market Growth at Blu-Con

November 2, 2010 · Posted in M&E Daily, M&E Exclusive · Comments Off 

By Marcy Magiera

BEVERLY HILLS, Calif. — Amazon.com opened the Blu-Con 2010 conference here by telling a room of more than 400 industry execs how they can expand Blu-ray Disc sales by giving consumers more titles and easier Internet connectivity.

Bill Carr, Amazon’s VP of music and video, invoked the voice of the Amazon customer, saying that “Blu-ray is a product customers love,” but that the format also comes up short, particularly in the area of selection.

“Broad selection is critical to signal Blu-ray is here to stay,” Carr told the Blu-Con audience. “Customers need to be confident in the format to build deep libraries.”

The retailer said that within five years of DVD’s introduction, there were more than 20,000 titles available at retail. By comparison, there are under 5,000 Blu-ray titles available today, he said. Amazon carries 150,000 individual titles on DVD, he said, and just 4,000 on Blu-ray. “It will be a great day when those numbers are the same, or Blu-ray is higher.”

Among the movies most requested on Blu-ray by Amazon customers: the original “Star Wars” trilogy (episodes 4-6), “The Lord of the Rings” trilogy, “Finding Nemo,” “Lawrence of Arabia,” and “Pulp Fiction.”

After consumers adopt Blu-ray, they spend four times the amount on software that they did a few quarters prior to their Blu-ray purchase, Carr said. After the initial transition, spending stays high, but Blu-ray customers still buy as much as 50% of their movies on DVD, due to Blu-ray’s limited selection and price premium, Carr said.

At an average price premium of $10, Blu-ray accounts for a little less than half the sales volume of a title, Amazon found. But if there were no price premium for the newer format, Blu-ray might account for 90% of sales volume, according to the retailer.

Combo packs also stimulate Blu-ray adoption, Carr said.

He addressed hardware and the need for consumer education, noting that while Internet-connected Blu-ray players enable multi-format consumption, connection rates for Blu-ray players are still relatively low.

Firmware updates, and the lack of consumers getting the ones they need, generate many consumer complaints to Amazon, Carr said, recommending that more players need to ship with an internal wireless antenna.

“A connected Blu-ray player is an even better customer experience,” Carr said.

The move to Blu-ray 3D requires even more comprehensive customer education, he said. To help with that, Amazon recently launched a series of one-minute videos on its site answering frequently asked questions on home 3D.

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