Warner Bros. Kicks Off Test in Startup Reelhouse’s Enhanced Digital Storefront

Studio invested in seed-funding round in online-video startup

Warner Bros. has launched a three-month electronic sell-through test of five titles on Reelhouse, a startup the studio has invested in that caters to fans who want more than just a digital copy of a movie.

The studio on Thursday began offering “The Great Gatsby,” “Man of Steel,” “Argo,” the “Dark Knight” trilogy and “Pacific Rim” for rental or purchase on the Reelhouse website. The titles are presented on customized pages, which can include news and blog posts, images, free and bundled extras, interactive games, photos and both physical and digital merchandise.

Reelhouse launched a year ago, initially positioned as a platform for indie filmmakers seeking to reach ardent fans. Warner Bros. got involved through Turner/Warner Bros.’ Media Camp startup accelerator program, which participated as a minority investor in a $1.3 million seed round of funding earlier this year.

Debra Baker, senior VP of global business development for Warner Bros. Home Entertainment Group, said the studio is interested in seeing whether the enhanced content and user interface on Reelhouse results in higher purchase rates. Warners has a history of being more experimental with homevideo distribution than other majors.

“We think there can be some interesting learnings about the path consumers take in a digital experience,” she said. “Consumers who are engaged with our brands tend to spend more — that’s our hypothesis.” She added that the titles on Reelhouse will include some but not all of the bonus content available on Blu-ray releases.

Reelhouse CEO Bill Mainguy said his company’s mission is to let filmmakers and studios establish a more robust online presence in contrast to the one-size-fits-all digital storefronts that already exist. (Read: the shopping-cart metaphor of Amazon.com.)

“There are a lot of ways you can get your video file on the cloud,” he said. “But we said, ‘There needs to be a community.'”

Mainguy, a former videogame producer for Electronic Arts, founded Reelhouse in 2011. Along with Warner Bros., another major investor in the company is Generate Media, which specializes in 2D-to-3D conversion. The seven-employee company is based in Vancouver, with an office in L.A.

For indie producers, Reelhouse takes a 6% cut of revenue, which is far more generous than the typical 30% share that traditional digital distributors take. With large studios, he said, the arrangement is different given that they have additional technical requirements such as the need for digital-rights management protections.

Mainguy said Reelhouse offers users the option of purchasing an “all access” pass — rather than inviting them to “buy” a title. The concept is that it’s “more than simply repeat watching for people who purchase the film,” he said. “In the digital space, owning it isn’t as valuable as receiving more access or a different experience. Films have been getting commoditized… There’s so much more for fans of a film to get lost in.”

Baker noted that Warner Bros. engages in multiple tests with different distributors. But, she said, Reelhouse’s approach promises to provide insights into what leads consumers to open their wallets for digital content.

“We aren’t going to make dramatic changes based on data from one partner, but it will be valuable data,” she said.

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