NETFLIX, AMAZON PART OF FORCES SHAPING INDIE BUSINESS MODELS
The Cinematic Market is caught in a whirlwind of industry forces that are changing how film/video sales are done. Digital platforms are taking some top projects off the table, new ventures are helping finance sales companies’ transformation into producers, turning film content investing into a business that could change the way we invest in cinematic content.
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“Netflix and Amazon are now in the business of creating their own content and delivering it directly to the consumer — and there will be others, like Google and Facebook. The future business model dictates for future players of this new world, in the business of cinematic content fulfillment, is to maintain leverage by developing, producing and owning their own content and IP.
The key to success is to be able to connect film/video developers with investment banking sectors and to manage content development for sales companies, in order to expand. In other words – empower artists, producers and financiers to build their businesses so that they can own and control more of their content, and then sell directly to networks and distributors globally.
The breadth and scope of the challenge is to connect with networks ad distributors and the ability to sell in every window in 190-plus countries directly. You have to have a solution for how to navigate and optimize content and exploit distribution rights, window by window, country by country.
Right now, many in overseas sales and distribution are bracing themselves for Amazon Studios’ next big moves. Amazon has a Prime Video service in over 200 countries, and so inevitably there’s complexity in the way they will distribute and sell their movies. Under the Amazon system, they sell all rights to local theatrical distributors and agree to license back the rights at market rates based on their movies’ performance at the local box office. This ensures each local distributor is bidding for movies based on the same terms, regardless of whether they have a pay TV output deal.
With its lack of interest in theatrical, Netflix represents a bigger challenge to overseas distributors. The company just announced that it will increase its budget up to $8 billion for original content in 2018, including about 80 original movies. Everybody is realizing that Netflix and Amazon are here to stay, so you can either do business with them or get out of the way. The field of Google, Facebook, Apple, Disney, etc. (“the other digital platforms”) are stepping up their content game as well. International independent distributors haven’t yet begun monetizing these distribution outlets. They don’t know exactly what the lay of the land is. However, everyone agrees, that digital platforms are always going to be needing product outside of just what they’re producing.”
An interesting pro-active response, by the decision makers of several independent film companies, in the face of the digital platform sales impact, is to move toward more local-language production and distribution.
