Though some in Hollywood would tell you that the trend of the blockbuster is killing independent films and mid level budgeted features, last week at the annual PGA Produced By Summit, distributors and financiers of indie films had a more rosey outcome, and it’s all thanks to video on demand.
“I don’t think the sky is falling. (Thanks to Video on Demand) it’s easier to make films than ever before and yes there are more options for consumers to view movies than ever before.” – Andrew Karpen, CEO of Bleecker Street Media via Deadline
Stressing the need on the part of producers to be nimble with their distribution strategy, a panel of indie money people at the Produced By Conference all agreed that video on demand has been a god send for filmmakers looking to give their projects life online.
While more screens are being devoted to high profile tentpoles such as super hero movies and other blockbusters, like Star Wars, smaller films have to get creative to find their audience, and that’s where streaming video on demand has really helped.
As if to underscore that notion, panel moderator Ted Mundorff, CEO of Landmark Theaters, cited box office dollars to note that the three highest grossing independent films of 2014 took in $192 million, while the top grossing films in 2015 took in $100 million less, leaving filmmakers to wonder where the audience went. The answer: They went online.
The reason is simple… While most of the 35 and older demographic is still looking to go to the movies for their cinematic fix, the all important 16-34 demo has turned to streaming, which explains why cable cutting is so fashionable with the young. It also explains why streaming companies like Netflix have begun to spend as much on original content as the studios.
According to Statista, a statistics portal, video on demand revenue is projected to rise to around $28 billion in a la carte video on demand, $7.5 Billion in managed video on demand, and $2.5 billion in managed subscription video, for nearly $40 billion in video on demand revenue. Contrast that with box office projections, which cite that 2016 is going to be a down year after a huge 2015, despite so many blockbusters opening.
“While the box office is notoriously difficult to predict, we believe a common-sense base case forecast should assume a flat to modestly down 2016 box following a record slate in 2015,” stated a report by Morgan Stanley late last year.
“VOD helps mitigate the risk,” said Jonathan Saba, VP of Marketing, Saban Films. The Panel stressed that thanks to VOD, filmmakers can ride the theatrical wave, however brief, and then move to find a life streaming ala carte. Daniel Hammond says that since “the sky has been falling” in the business for a few years now, video on demand has filled the void left by it.
It’s an important trend to keep tabs on. Box office prices go up every year, while streaming costs have remained relatively consistent. But with the addition of 4K streaming by Netflix, those prices have begun to rise a tad. The question is, can video on demand outpace box office this year? It’ll likely do so because of audience it’s aimed straight at.
Hat Tip – Deadline