Estoril : la VOD et tout ce que vous n’avez toujours pas compris…
CURRENT VOD EXPERIENCES: BENCHMARK BUSINESS MODELS, OBSTACLES & OPPORTUNITIES, LICENCES & WINDOWS
Saturday, November 13th
MODERATION: Pierre Alexandre Labelle – Under the Milky Way (France)
Marijn Duijvestein – KEA European Affairs (Belgium)
Efe Cakarel – MUBI (UK)
Jonathon Perchal – Artificial Eye (UK)
Ricardo Torres – Vertice Cine 360 (Spain)
Introducing the panel on VOD, Marijn Duijvestein from KEA consultancy research cabinet, underlines the movie industry still needs to be quicker than the music industry, by understanding what is changing, i.e. the sequences of activities (sequence of funding, exploitation, starting with marketing earlier). Still, the problem remains the access to content. No matter the number of platforms exploding, how transverse the actors are (game consoles and co), the VOD actors need to focus on the ease of use (internet browsers, easy search and alert mechanisms), the value for the consumer and the navigation into European content (VOD markets so far remain national).
In 2008, the European VOD market was equal to 544 millions, and the share of VOD revenues is between 0,2% (Finland) and 1,79% (Belgium) of the total audiovisual revenues. It’s expected to be the same than rental DVD i.e. 2,2 billions in 2013, based on the idea that in USA, 40% of the audiovisual market is rental… So if content is king, what is the problem? Providers just consider VOD as a flagship product, the ultimate goal is to sell internet subscriptions, IPod, computers, etc. depending on their activities. So they don’t really focus on getting a wider number of movies. Anyway the major development to achieve remains multi territory licensing. To conclude, the opportunities are: to reach new markets, to decrease distribution costs, to develop audience; whereas the main challenges are: to get large content aggregators, to experiment how is working the financing gap, and to make easier the EU rights acquisition process. VOD actors need to build brands around movies to engage with their audience. That’s the core strength.
Then, to enter in more concrete details, Jonathon Perchal from UK distributor Artifical Eye, explains how they launch their own VOD platform (they have already theaters, Curzon). The idea is to work title by title, and not buying a bunch of movies, doing a day and date release. The website will be not only for VOD, but also a brand, a marketing tool to reach their audience. The main obstacles he points out are the relationships with the sales agents who don’t want to sell only VOD rights, the platform access, and the competition between Pay TV and VOD: indeed VOD is not allowed during Pay TV window (for example, for the movie Fish Tank they theatrically distributed, they’ll have to wait). If distributors want to come on their website, it will be a usual share of revenues, but he doesn’t want to buy too many movies, in order to be well identified as a brand by the customers. In his opinion, ITunes is really the big challenge, because internet users will go naturally there.
MUBI (ex Theauteurs.com, created in 2007) founder Efe Cakarel arrives in the panel with a non feigned enthusiasm about his company and the initial idea of watching indie movies on internet. He always tells the same story about how he began in the business: he was in Tokyo and wanted to watch Wong Kar Wai’s In the Mood for Love: but it was impossible. Whereas festivals are always sold out with indie movies, it became impossible to watch a movie outside festivals. In his opinion, the killer application was to play and watch the movie. So in November 2008, he started Theauteurs.com and sets up a partnership with Criterion Collection and Celluloid Dreams. The project was backed by MEDIA. But nobody was watching movies, the average visit lasted 7 minutes. He realized at that time that TV was necessary (and for example, the set up box, too expensive, never worked): big idea, gaming console! He approached Sony for the Playstation in order to create the first global VOD platform in the world. So, when a gamer wants to buy a game, he’s going to the online store, where there is a now a store for movies, with MUBI (the new name of the company). It has been launched beginning of November 2010, and already 200 000 members have been registered. The idea is to develop also an IPAD application for beginning of 2011. The business model is the following one: subscription at 12,95€ a month + PPV at 3,95€ a movie (there are platforms fees for Sony which he didn’t want to reveal + 300€ for the subtitles + 500€ for the HD for each movie’s expenses). The distributor who has sold his VOD rights has a dashboard for every movie, both for SVOD and PPV. MUBI model is not based on exclusivity, because what matters is the line up, not the “freshness” of a movie. It’s not a catalogue. There is a selective number of movies chosen for their artistic quality (for example, the UK-Chinese movie, She a ChineseI, has been watched 7 times more on MUBI than on Itunes). By the end of the year, he hopes to get 1000 movies. The strength of MUBI is to be not only a VOD platform, but a social platform as well: for example, he knows all the Michael Haneke fans in UK, without spending money on marketing. He’s working with producers, distributors, sales agents, and wants to be in the core of the business, by offering indie movies in all over the world. His goal is to make possible to see a movie with 10 subtitles in 10 years. His revenues are now a couple of thousands every quarter…
Finally, Ricardo Torres from Vertice Cine 360 presented the VOD market in Spain. Whereas different VOD platforms already existed, recently partnerships have been done with Playstation (Sony) and Xbox (Microsoft), and ITunes has just opened its online store with 100 titles. He’s really seeing a growing market emerging with a turning point in 2011 for Spain. But, a lot of people still don’t know what VOD is. Maybe the awareness will come from AVOD (VOD supported by advertising, like in Hulu or Youtube). For now, VOD revenues are between 1 to 3% of theatrical box office. Horror and action movies are working well on VOD, through the Playstation store. There is the same problem with Pay TV exclusivity and the old models of sales agents in Spain. The strength of Vertice Cine 360 is its library of more than 3000 titles, which enable the company to have corners in VOD platforms, it’s easier to market.
If the theory is still the same for VOD (access to content, easiness to use, etc.), the obstacles are still there also from the traditional financing actors. However innovative projects manage to emerge and get a name in the movie industry. To be continued…