Companies get into co-productions, VOD

ESTORIL, PORTUGAL — Independent European distributors are adapting their business models to allow them to survive in a rapidly changing commercial climate.

Meeting Friday through Sunday in Estoril, Portugal at the annual conference of Europa Distribution, a body that reps 80 indie distribs in 22 European countries, the companies reported a pressing need to expand along the supply chain.

Whereas in the past their main focus was theatrical, now many of them also co-produce pics, run theater chains and are setting up video-on-demand outfits.

Henk Cluytens, head of distribution at Belgium’s O’Brother, said that co-producing immigration drama “Illegal” allowed the company to secure the film early on, giving it a say in its festival strategy as well as prepping the marketing campaign in advance.

Pascal Guerrin, head of co-production at film financier Backup Films, said that producers benefited from the distrib’s knowledge of their local market, and having distributors on board helped legitimize the project in the eyes of other investors.

However, there are risks attached to co-producing, warned Massimo Brioschi, head of research and development at Italy’s Mikado, citing the example of Fernando Meirelles’ “Blindness,” which failed to generate the box office that the company had expected.

Public subsidies had become more essential than ever, indie distribs agreed, at a time when governments are cutting back on coin.

The release of “Illegal” in France failed to meet the 55,000 admissions target set by distrib Haut et Court, said Carolyn Occelli, a marketing exec at the company. The pic opened at a time of widespread social unrest in the country, which hit its box office, with only 21,000 admissions secured from a 73 print release.

The gross would not have covered the P&A costs of €200,000 ($274,000) if it hadn’t been for subsidies from national funding body CNC and the EU’s Media Program.

Many distribs already own theater chains, which means they can secure screens when they need them, and now some are setting up their own VOD businesses, too.

Having both allows them to collapse the theatrical window and have a simultaneous theatrical and VOD release for pics, making the most of the marketing spend.

One such company is the U.K.’s Artificial Eye, which owns the Curzon chain and now has its own VOD site for its own films and those of other indie distribs, reported Jonathon Perchal, head of legal and business affairs. Artificial Eye has another business, Fusion, which acts as a VOD aggregator for other distribs.

Perchal said the company aimed to generate 2% to 6% of a film’s theatrical gross from VOD.

He said there were still issues to resolve, such as conflicts with other rights holders. Pay TV companies, sales companies and producers were not always willing to accommodate innovative VOD release strategies, and it was proving difficult and expensive to clear VOD rights for back catalogs.

The new media landscape is still capable of throwing up surprises, distribs reported. Perchal said that Artifical Eye had discovered that any title beginning with the letter “A” performed far better in VOD than other titles: “Antichrist,” for example, earned 35% of the value of its U.K. box office take. This was due to people searching for “all films” on sites like iTunes, and as films are listed alphabetically, those beginning with “A” are shown first.

Efe Cakarel, chief exec of arthouse VOD site Mubi, said that the revenue generating potential of VOD had only just been hinted at. His service, which has a groundbreaking deal with Sony PlayStation that allows gamers to download films through their consoles, was adding an average 10 members per minute, he said.

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