VOD-release strategy can help theatrical run

Flash back to early 2006: Within months of each other, Mark Cuban’s 2929 Entertainment and Cablevision’s IFC Entertainment set out with revolutionary distribution models, combining simultaneous theatrical and ancillary releases.

Exhibitors jeered, claiming the scheme would destroy moviegoing. “Collapsing the Distribution Window” made the New York Times’ Magazine’s “Year in Ideas” list. But now, more than two years after the initial hoopla, is day-and-date the distribution solution indies have been hoping for?

Executives at IFC and within Cuban’s indie empire still believe it is, and now they have the numbers to show for it. “If you ask me how the ratio trends from VOD to theatrical, it’s about 2-to-1,” says IFC Entertainment prexy Jonathan Sehring. “It’s huge.” And it’s getting bigger, according to Sehring. “We’ve seen growth month to month with the rise of digital households.”

“There’s no question,” agrees Eamonn Bowles, prexy of 2929 division Magnolia Pictures. “For most of the films, the theatrical is far outstripped by the VOD revenue. It’s a more efficient distribution platform to get to all the nooks and crannies of the country without any expense attached to it.”

As a prime example of the model’s success, Bowles can point to “Flawless,” the Demi Moore/Michael Caine heist pic, which is the first major release in HDNet’s Ultra VOD program. “‘Flawless’ did multi-six figures on VOD,” he says. (Some sources have put that VOD figure in the millions.) And even after it was available for weeks on demand, the film still went on to gross $1.2 million in theaters. “And it didn’t seem to erode the DVD,” he adds. “There may even be a case to be made that VOD not only doesn’t cannibalize DVD, but enhances it because of the exposure.”

But not every film is going to nab a significant number of VOD button-pushers. Boutique distrib Roadside Attractions recently attempted its first foray into day-and-date with the unsuccessful release of Neil Young’s concert film “CSNY: Deja Vu.” While the movie earned slightly more on VOD than its $60,000 in theaters, Roadside’s Howard Cohen admits, “The lesson for us is if it has no life theatrically, then it has no life on VOD.”

What does work are recognizable stars (as with IFC’s top two VOD performers, Jeff Garlin’s “I Want Someone to Eat Cheese With” and the James Caviezel/Greg Kinnear thriller “Unknown”), as do genre titles (such as thriller “Alone With Her,” which ranks third) and sexier pics (France’s “Exterminating Angel,” IFC’s seventh-highest VOD title).

Sehring notes French-language films have performed so well they’re considering creating a dedicated VOD platform for them. One sales agent even jokes that more film titles will start with the letter “A” so they’ll top the alphabetical list on VOD offerings.

For foreign and American indie producers, the model has proved largely worthwhile. Paul Trijbits, an exec producer on two of IFC’s VOD successes (Ken Loach’s “The Wind That Shakes the Barley” and Shane Meadows’ “This Is England”), says day-and-date uniquely helped the films to thrive where other releases have failed.

“On previous films from Loach and Meadows, there were no overages. Never. They were largely unrecouped films,” he says. “Before, we couldn’t barely sell them. Now they’ve all returned money.”

IFC’s advances can be painfully meager, ranging from nothing to low-six figures, but Sehring says 90% of the movies recoup their advance, minimal P&A costs and earn overages.

Low-budget filmmaker Caveh Zahedi, for example, received no money upfront for his feature “I Am a Sex Addict” but recently received a mid-five-figure check. “The day-and-date thing made the difference between the film being commercially viable and not,” he says.

Even so, Zahedi and others admit that the current day-and-date deals still aren’t lucrative enough to pay back their film’s investors. Producer Jeffrey Levy-Hinte says Larry Fessenden’s IFC release “The Last Winter,” which grossed a paltry $33,000 theatrically, will likely net $200,000 from IFC’s day-and-date deal. “The investors are still going to lose 95% of their investment,” Levy-Hinte says, though he admits that he’s “reasonably happy” with the way things turned out. By comparison, he never saw overages from his traditionally released 2003 modest hits “Laurel Canyon” and “Thirteen.”

“It’s absolutely pathetic and unsustainable, the whole scenario of making and selling movies,” continues Levy-Hinte, who has vowed to exit the business. “If you can make a movie for $200,000, then all of these things are very interesting. But if you make a movie for $2 million, then I don’t think any of them are interesting.”

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