“Breaking out of the rut will require bold, persistent experimentation, and a willingness to embrace fresh ideas. Of course, that’s only possible with a wider range of films.”
This post is a part of our yearly series about how to distribute your independent film in the current industry landscape.
It is best read after our original introduction to the world of film distribution, covering key concepts such as the Release Windows System, primary Video on Demand (VOD) platforms, and strategies for indie filmmakers ready to distribute their films. For further context, check out our 2015 update, then read on for insights into 2016!
A lot can happen in a year.
In 2015, it became easier for cord cutters to keep up with many of their favorite television shows. HBO launched HBONow in April, unshackling its programming from pay-TV. Movie theatres scrambled to woo customers with new incentives, from reclining seats to alcoholic beverages to new business models. And of course, the VOD juggernauts continued their advance, expanding into feature film territory and growing their subscriber bases.
That advance sweeps into 2016 – and at a much faster rate than many anticipated.
The BFG | Walt Disney Studios Motion Pictures, 2016
I. Movie Theatres: Evolve or Go Extinct
“The theater business has weaker prospects going forward than at any time in the last 30 years,” claims media analyst Hal Vogel, citing the proliferation of failed blockbusters in 2016. This summer’s flops could cost their studios tens of millions of dollars, yet Hollywood’s tentpole superhero machine carries on, “essentially wrecking [its] own economics.”
The rising price of ticket sales disguises the fact that “on a per-capita basis, the moviegoing audience is at its lowest levels in nearly a century”, with millennials – traditionally a moviegoing demographic – largely avoiding theatres. MoviePass’ new CEO, a veteran of Netflix, intends to win them back with the company’s ever-evolving subscription model, but its impact has yet to be felt. Meanwhile, Sean Parker’s Screening Room threatens to disrupt the status quo by making new releases available at home, but it’s meeting with resistance from exhibitors and several high-profile directors.
As Hollywood struggles to adapt, audiences (and filmmakers) are turning to a wide variety of entertainment alternatives, including television and online content, where VOD platforms like Netflix and Amazon reign supreme. In January, Netflix launched simultaneously in 130 countries, becoming a truly global network. Amazon boasts an estimated 60-80 million global Prime members – all of whom have access to the service’s streaming video library – and it launched a standalone video membership option in April.
If 2016-to-date is any indication, VOD is just getting started. The model has exploded.
Stranger Things | Netflix, 2016
II. VOD Platforms: The Gold Rush
For one, despite stalled subscriber growth, Netflix remains undaunted, intending “to spend more next year on original and licensed content than the $6 billion it spent in 2016.”
The streaming service snatched up SVOD rights for two of Sundance 2016’s hottest films before the festival even started, forcing dealmakers to rethink their traditional all-rights strategies. Next, it agreed to fund and distribute five original indie filmsand committed an unprecedented $90+ million to Bright, an upcoming tentpole feature from David Ayer. On the documentary front, two of Netflix’s films were nominated in the latest Academy Awards, and four more are premiering at The 2016 Toronto International Film Festival.
As Netflix improves its film catalog, it continues to add to its serialized content. Stranger Things is now its most popular show, and Baz Luhrmann’s The Get Down – one of the most expensive shows in history – has made a splashy debut. For a sense of the impact Netflix is having on consumers’ viewing habits, consider this study that found that Netflix “caused 50% of US TV viewing” to drop in 2015.
Amazon, too, is wading deeper into traditional television’s territory. Last December, it launched its Streaming Partners Program, creating access to a multitude of premium channels, including Showtime and Starz, à la carte. Like Netflix, Amazon picked up its fair share of films at 2016’s Sundance Film Festival, then went on to acquire five high-profile auteur works at The Cannes Film Festival, cementing its indie-friendly reputation. Trailing behind but closing the distance is Hulu, which recently moved to an all-subscription model in an attempt “to ratchet up its competition with Netflix and Amazon.”
Smaller companies also are expanding audiences’ VOD options. For example, TCM and The Criterion Collection partnered to launch FilmStruck, a catalog of “hard to find gems and cult favorites”. The Tribeca Film Festival launched Tribeca Shortlist, a collection of films “personally curated by industry insiders” – which, incidentally, is an Amazon Streaming Partner. In May, Vimeo acquired VHX, intended “to provide a complete set of SVOD tools for individual creators, niche programmers and media partners.” And of course, YouTube launched YouTube Red last fall, offering ad-free streaming and “YouTube Red Originals”, which has helped bolster opportunities for digital and social media stars. In fact, The Television Awards created a new Emmys category to recognize internet content producers’ achievements in “the short-form space”.
Ultimately, many dealmakers are excited by the burgeoning role that streaming services are playing. “Digital platforms are valuing films not only for their transactional value but also for their prestige value and potential to attract and retain subscribers,” notes CAA’s Micah Green, but traditional distributors feel outgunned, while their brethren in the exhibition and television trenches are taking heavy fire from the on-demand, à la carte revolutionaries as well.
III. Indie Filmmakers: Where You Come In
If you keep up with our blog, then you know we’re excited about the future of indie filmmaking here at Lights Film School. Greater demand for content means more opportunities for content providers.
VOD platforms have risen to meet the demand, while Hollywood, exhibitors, and cable television companies struggle to adapt. “[The industry] faces shifting tastes, increased competition, and a business model that seems to have been built for a different age,” Variety summarizes. “Breaking out of the rut will require bold, persistent experimentation, and a willingness to embrace fresh ideas. Of course, that’s only possible with a wider range of films.”
To accommodate more films, both aggregators and self-distribution platforms are evolving, making it easier for you to get your film out into the world so audiences can find it. For example, aggregators like the Sundance-partnered Quiver and Distribber are moving toward flat fees and small-to-no-profit shares, making it more affordable for you to get your film onto prestigious platforms like iTunes and Netflix. Meanwhile, Amazon launched Video Direct in May, “a self-service option for video providers to get their content into a premium streaming subscription service.” If you’re committed to seeing your film on the big screen, then you can check out options like Tugg, a crowdsourcing platform that helps you build your audience and land that screening.
In short, the horizon seems full of promise for us indie filmmakers, even as financing remains a challenge. It’s fun to remember that Hollywood was founded by a coterie of independents, after all. Perhaps the pendulum is swinging back.
What are your thoughts on the state of the industry? What about opportunities for indie filmmakers? We invite you to share your perspective and distribution stories in the comments below!
For more details, explore the rest of our yearly series about how to distribute your indie film in the current industry landscape:
Part I – How to Distribute Your Indie Film in the Digital Age
Part II – 3 Trends You Need to Know for Distributing Your Film in 2015
Part III – 3 Trends You Need to Know for Distributing Your Film in 2016
If you’ve yet to make a movie and are wondering where to start, then check out our online filmmaking course, designed to keep with your vision and schedule from concept through final cut – more guided than a blog, more interactive than a textbook, more flexible than traditional film school.