Brave New World

Film distribution gets a shake-up via video-on-demand

If you’re a film buff, you might have noticed that several art/independent titles figuring prominently in 2009 and 2008 end-of-year awards lists — Summer Hours, In the Loop, Gomorrah, A Christmas Tale, Che — did not play a first-run theater in Cincinnati. Nor has perhaps 2009’s most talked-about art film, Lars Von Trier’s Antichrist.

Or did they? Cincinnati has become a hot spot for controversy regarding specialty films (art and indie) that go first-run video-on-demand (VOD). IFC Films, which has released all the above titles and many more prestigious ones, make its movies available as first-run VOD selections on digital cable systems. So the same day those films opened in New York, you could purchase them here on Time Warner Cable’s IFC in Theaters VOD platform. That gives you a 24-hour window to watch a title, in hi-def if desired, until it is retired from the platform.

Proponents see this as a way to use new technology to expand the indie-film audience in recessionary times without harming the existing one that patronizes urban art houses. Theaters in Cleveland, Columbus and Dayton have occasionally booked IFC titles, but others worry it diminishes the theatrical audience beyond big cities, because indie films depend on moving slowly from New York into secondary markets like Cincinnati, where there are fewer art screens. (Traditional Hollywood movies aren’t available via VOD until they are ready for DVD release.)

“We would prefer movies not be distributed on VOD so they have a theatrical life prior to being on video,” says Dan Heilbrunn, who books the nine screens of Esquire and Mariemont specialty houses for Theatre Management Corporation. He also is an owner of the DanBarry chain of second-run movie houses.

Heilbrunn doesn’t flat-out say he boycotts IFC and other VOD-available films. He explains instead that the titles listed above are “not on our radar screen” because “they are pictures so small in their grossing potential, no matter how they were presented they probably wouldn’t come to our market. We’re cognizant of their winning awards, we certainly would like to bring those films to Cincinnati, but we’re not a charitable organization.”

Jonathan Sehring, president of IFC Entertainment, says, “There’s an expense to the slow, traditional release pattern that is costprohibitive for the survival of most distribution companies. I can list probably 10 companies in the past 24 months that have gone out of business that stuck to the traditional distribution model.” (He mentions Miramax Films, Paramount Classics, Warner Independent and Picturehouse, all “boutique” arms of major studios.)

Sehring says that while a controversial film like Antichrist, in which a couple takes grief over a dead child to extremes, hasn’t worked in theaters, it’s on track to become IFC’s biggest VOD success. And he says IFC’s first-run VOD offerings — now available in 50 million households — might actually help theatrical release.

“We’ve had our best year releasing movies in theaters in our history,” says Sehring, who explains IFC is on track to gross $12-$13 million from its theatrical releases and a little less from VOD. “One of the benefits of this (VOD) program has been it helped generate (theatrical) awareness for these movies. That has been difficult to come by, because I don’t think anyone knows the right amount of advertising and the best place to advertise in this fragmented marketplace.”

IFC isn’t the only specialty-film distributor to use cable as a first-run platform — Magnolia Pictures also uses it, but more selectively.

Magnolia makes some of its theatrical releases available via VOD one month before they’re released theatrically. And for that it charges a premium of $9.99 per film. (It then drops to $6.99 when the title is released theatrically.)

“The VOD numbers will almost always dwarf the theatrical,” says Eamonn Bowles, Magnolia’s president. “We do seven figures on quite a number of our films. It’s a huge tent pole of revenue. The reality is the theatrical market has gotten so tough, some of these films we would have never touched without the VOD platform. With it, they’re remarkabprofitable for us.”

Even an obscure art film like Jennifer Lynch’s Surveillance, which earned under $30,000 theatrically and bypassed Cincinnati, is on track to cross $1 million from VOD, where an audience has been lured by the listing of her father, David Lynch, as executive producer.

Most of the IFC titles mentioned above had domestic theatrical gross in the $1-$1.5 million range — In the Loop, an English-language satire of the Iraq War buildup, grossed $2.4 million. Anthony Kaufman, a New York-based film journalist who covers foreign films, says, “For an art-house film to break $1 million is considered good, especially for a foreign-language film.”

Heilbrunn does book plenty of movies that have only grossed in the $1 million range (or less) into the Esquire and Mariemont. But as he sees it, IFC doesn’t really care about getting its movies into theaters beyond the major cities, where they can play at roughly the same time they debut on VOD. (IFC owns a theater in Manhattan.)

“You’ve got your story backwards,” he says.

“It’s IFC’s business model to release films VOD; it’s not their business model to release their film theatrically. Anything they pick up theatrically is their gravy.”

And, he says, by the time an IFC film could make it to a secondary market like this, part of its potential audience (already smaller than New York or Chicago) has already seen it on cable.

To that, Sehring disagrees: “We distribute a lot of movies and the theaters that play with us do extremely well,” he says. “The theaters that don’t play with us are struggling to find movies as good as the ones we release. It’s very shortsighted, especially for specialized movies.”

Heilbrunn has high regard for Sony Pictures Classics, the veteran specialty-film distributor that doggedly follows a traditional, marketby-market distribution model. While it has its misses, it has scored some impressive domestic theatrical grosses with foreign-language films like this year’s Coco Before Chanel ($5.9 million so far), 2007’s The Lives of Others ($11.3 million) and 2006’s Cache ($3.6 million).

Tom Bernard, co-head of Sony Classics, is a strong critic of first-run VOD. He says it hurts a film’s commercial life and diminishes American film culture. And, he says, VOD is as much about helping the cable industry grow as helping sustain a sophisticated film culture. (IFC is a division of Cablevision; Magnolia’s ownership also has cable’s HDNet and HDNet Movies.)

“Cable companies use these films as an enticement to sign up for the cable system,” Bernard says. “They advertise and say here’s a first-run movie you can see on our cable system, but you have to subscribe. So it’s a loss leader for the cable company.

“It’s not something that benefits an audience, unless you happen to be a member of that cable system and don’t want to see films on the big screen, which I think is very few people,” he says. “The theaters do not want to be second, so they will skip playing a movie that shows up in a window out of synch with the normal flow of distribution.”

Cincinnati World Cinema did bring IFC’s Summer Hours and In the Loop to Covington’s Carnegie Arts Center this fall, for two digitally projected, non-theatrical screenings each as part of its Global Film Series. Both films played long after their theatrical (and VOD) debuts, but CityBeat reviewed them like first-run titles. (In 2008, he screened IFC’s much-praised 4 Months, 3 Weeks and 2 Days.)

“Audience reaction to (the) films was universally quite positive and attendance was decent, but could have been better, thanks to the flaccid economy,” says CWC head Tim Swallow, via e-mail. “Cincinnati World Cinema will continue to present films from IFC — I’m looking at several titles for 2010 — that fit our programming and mission.”

Whatever the future for art/independent film distribution is, it’s probably changing even as you read this. It’s now possible to stream Netflix movies to a TV screen via certain Internet-enabled Blu-ray players. And there are various online experiments.

“It’s a brave new world,” Magnolia’s Bowles says.

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