Couch vs Cinema

March 6, 2018 3:34 pm Published by Leave your thoughts

 

There is an increasing rise of internet based streaming services (also called OTT or Over the Top) and has the potential to change the way in which media and entertainment is produced, sold, distributed and exhibited to the customer and audience. This post looks at SVOD, TVOD and AVOD and some of the more premium services.

What types of VOD are there?

So we’ve all heard of “Video on Demand” (VOD), right? This is where the streaming service allows the customer to decide where, what and when to watch. This is a fundatmental shift from tradition “TV” with it’s linear programming.

How users are then asked to pay for the content differs per model:
  • Subscription VOD (SVOD) – This would be a subscription service where the customer enters a contractual agreement. There are typically no limits to how much the user watches or when they watch it. Example: Netflix
  • Transactional VOD (TVOD) – This service will not normally charge you for signing up, but will instead charge you for the amount based on the content that you watch. This can be for movies, TV or even sporting events. Example: Apple iTunes. This model will attempt to keep customers by offering deals and attractive prices.
  • Advertising VOD (AVOD) – This model is free for users but, yes, you guesses it – you pay with the amount of ads that you see. Think about YouTube here! This one is probably one of the least explored avenues within the OTT market. Here, there’s a large number of opportunities for advertising, based on user data. This could be something we see more of in the future.

 

Almost there …there’s also services that offer a mix of the above. This is where the customer will pay a set monthly fee, which will open certain services. Extra fees are then applies to open up further content, such as live events or sporting fixtures. MTG Viaplay was one example of this; although this mixed model has been abandoned due to increasingly poor audience reaction.

Who supplies “posh” VOD?
In an interesting post: (http://variety.com/2018/film/news/lionsgate-vice-chairman-premium-vod-1202713670/), Variety state that “Lionsgate Vice Chairman Michael Burns said at Wednesday’s Morgan Stanley Technology, Media & Telecom Conference that he expects some type of premium video-on-demand offering could be introduced in the next 12 to 18 months.” Further,  “after heating up in 2017, premium video-on-demand talks between studios and theater owners have largely ceased. There are still some discussions taking place between Hollywood companies and the Canadian chain Cineplex, but it’s unclear if they will lead to any pact. Typically 90 days have to transpire between a movie’s debut in theaters and its home entertainment launch, but studios believe that exclusive theatrical window is too long. They note that many films make the bulk of their revenues in the first few weeks of release and believe that sales and rentals would be goosed if movies were available on demand shortly after the studios had spent millions on national advertising campaigns.”
Now, there was Prima Cinema TV (supported by IMAX) that was a premium service that allowed users to stream films, that were about to be released! Or still in the cinemas. Prima Cinema has been a pioneer for day-and-date releases. However, this came at a cost – at $35,000 for the server and $500 for the movie (oh, yeah – this is a one time viewing!). However, they are no longer running this service.

A newer service, Screening Room, is also pioneering for day-and-date release. “Screening Room is the movie streaming service from Napster co-founder and former Facebook president Sean Parker and entertainment mogul Prem Akkaraju.” (CEPRO, 2016).

There are a number of big names who are backing this project – including Steven Spielberg, Peter Jackson, JJ Abrams, Brian Grazer and Ron Howard (they all have a stake in Screening Room!)

So what’s the goal? Well, the service is to offer same day releases for $50 per movie. However, although studios may be keen … cinemas may not be. They are a big player in the movie industry and have and will continue to boycott films if they don’t agree with something.

One issue moving forward may be the view that this day-and-date release, using such services, may devalue the exhibition window and subsequent revenue streams. It may not work for major releases,for example…why? Well, there just isn’t the revenues available within such services for a release. A bigger (or even reasonable budget), may not be recoverable for day-and-date release.

Although this is backed by a number of big names – there are equal numbers of high profiles who remain unconvinced – James Cameron, Christopher Nolan, Jon Landau, for example. Landau saying: “Jon Landau said: “Both Jim and I remain committed to the sanctity of the in-theatre experience. For us, from both a creative and financial standpoint, it is essential for movies to be offered exclusively in theatres for their initial release.”

Looking forwards, it will be down to the evolving distribution windows and consumer behaviors that determine for the future for VOD. How do people want to view content? For example though, for an arthouse cinema, the communal experience, people who are really caring about cinema – this will still exists. Further to this, the larger budget releases will also need to recoup their production costs. Cinema has something special to offer and it’s keep this immersive, unique experience alive that will determine the future of cinema. A generation that grew up with the cinema experience will ensure cinema is kept alive, just like going to Blockbuster to rent a video delayed its final demise. A generation that has become accustomed to paying for a VOD service will, in time, cause issues.

 

References:

https://www.cepro.com/article/hollywood_who_is_for_and_against_screening_room_same_day_home_movie_service

 

 

 

 

 

 
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This post was written by noxford

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