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Studios Are Slow to Switch to Online Screeners Despite Better Security, Economy

In Hollywood, a frenzied competition for attention begins every fall. That’s when studios start submitting films for awards consideration. Each studio wants its movies to touch as many critics, guild members and Academy members as possible.

Small wonder: The more voters who see a film, the better its chances of winning a trophy at one of the many January and February awards shows — perhaps even landing the most coveted prize of all: an Oscar.

To get their awards contenders seen, studios send out DVD screeners of movies that in many cases have not yet been released in theaters. That’s where problems begin — issues of cost and, more important, piracy. The DVDs are protected by the most sophisticated security technology money can buy. Yet every year, almost the moment screeners are sent, illegal copies wind up online.

“This is something every studio has to deal with,” says the person responsible for organizing awards screeners at a top distributor, who spoke with Variety on condition of anonymity. “No matter how much you try to secure your product, if you’re sending out a movie, it will leak online.”

The problem is the DVD itself: It can get lost or stolen or vanish. That’s why many are urging studios to forgo DVDs and instead send links to eScreeners — digital copies accessible online via password-protected streaming links. eScreeners are safer from piracy and vastly less expensive.

But studios are hesitant to switch.

On the face of it, switching to digital would seem an obvious choice. DVD screeners are enormously costly and challenging: Studios are obliged to mail out upwards of 70,000 screeners per year per movie — and as membership in the guilds and the Academy increases, that number will rise. Between producing the discs, constructing the packaging, fulfilling the orders, shelling out for shipping (often overnight express) and paying for the expensive watermarking process that aims to protect against piracy, the cost can be as high as $35 per screener.

“It’s lots and lots of money,” another studio rep explained off the record. “Even un-watermarked movies sent via USPS ground mail are a six-figure spend.”

And with that many physical DVDs floating around, it’s easy for one to end up in the wrong hands. “Think about how many discs are sitting on an agent’s desk waiting for an actor to pick them up,” says another distributor. “Maybe someone in the mailroom is snatching them. Maybe a director’s neighbor is poaching the mail. It’s a whole black market at this point.”

Matt Suggs, exec VP of Mediafly, an eScreening platform, agrees. “The most famous leaks in recent years have been the result of physical media,” he says. “If studios send out DVDs, they’re out into the open.”

The kinds of eScreeners offered by companies like Mediafly are superior to traditional DVDs in several ways. For one, they’re cheap: where a DVD screener can cost up to $35, providing a fully watermarked screener link costs less than $4.

And they’re less likely to be pirated: “You have a lot of security options with an eScreener that you simply don’t have on a DVD,” says Jason Shah, Mediafly’s CTO. “You can become instantly aware if the screener is being consumed more than once. Or you can lock it down if it’s being consumed in the wrong area, like China or Russia.”

So why haven’t the studios switched?

The simple answer is fear of losing voters. “The No. 1 concern is the older awards-voter demographic,” Suggs says. “This is brought up by every one of our customers.” Many critics, guild members and especially Academy members who are crucial votes are not young and, the studios worry, not tech-savvy. Says one insider: “The only way to win awards is to guarantee that people see your movie. And you can’t guarantee that if you’re sending out a link. Who is going to be the first studio to say, ‘We didn’t send out DVD screeners, and we still won?’”

Yet some see the technology as inevitable. Mark Nakano, senior director of product marketing at NexGuard, which offers watermarking services for both DVD screeners and eScreeners, agrees that a lot of people in Hollywood have difficulty with eScreeners, but maintains that the format will be embraced sooner or later. “I think as more people get used to technology and to watching things on an iPad or a tablet, these fears are going to go away,” he says.

Suggs points out that concerns about technological transitions are nothing new — even when it comes to screeners. “The same concerns existed when the studios moved to DVDs,” he says. “For several years, they still had older members asking for VHS tapes. It’s just inevitable that they’re going to migrate to eScreeners in the same way. The real solution to this problem is time.”

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