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What does the rise of video on demand mean for the film industry… and film lovers? Alison Frank assesses its impact.

For all its innovation, the film industry can often be painfully slow to embrace new technology. The invention of VHS, for example, was decried as a death knell for the business when it actually turned out to be a whole new way of making money. Now that more and more film lovers are currently bringing the cinema into their homes through video-on-demand (VoD), will Hollywood finally embrace the potential offered by the internet?

For some forward-thinking production companies and distributors the answer is a resounding yes and they’re already forming partnerships with VoD providers such as LOVEFiLM and new competitor Netflix, both of which offer unlimited streaming of films for a monthly fee of between £5 and £6.

Part of LOVEFiLM and Netflix’s competitive strategy has been to strike exclusive deals with movie studios: Netflix’s partnership with Miramax gives it sole streaming rights for film classics such as Pulp Fiction, while LOVEFiLM has teamed up with Sony so they can exclusively stream its titles such as The Social Network.

Some film industry experts see such partnerships as a model for the future. “The rise of VoD is critical to supporting the development and growth of the film industry”, says Robb Smith, COO of StudioCanal, which signed an exclusive deal with LOVEFiLM. “For independent distributors, the arrival of LOVEFiLM and Netflix has levelled the playing field between the indies and studios on the pay TV front and gives us the ability to reach a bigger audience than ever before”.

Independent movies can make up for limited box office revenues with strong VoD sales. The recent samurai film 13 Assassins, for example, made over four times its box-office takings through VoD.

Little surprise then that Curzon, champion of independent film, is the first UK chain to release new movies in their cinemas and on-demand simultaneously. Philip Knatchbull, CEO of Curzon Artificial Eye, explains that they wanted to “create a ‘cinema’ that people could go to online and to let film-lovers decide how and when they watch films.” After admitting to problems with high street sales, HMV is another company venturing into on-demand streaming of recent DVD releases. “The rise of VoD also helps to mitigate some of the challenges the industry is facing in the physical DVD market,” adds Smith.

“The rise of VoD also helps to mitigate some of the challenges the industry is facing in the physical DVD market,” Robb Smith, COO of StudioCanal

Larger movie studios and cinema chains remain wary of VoD, perhaps worrying that audiences would prefer to pay less to watch a movie at home, rather than going to the cinema.

While flexibility of content is a concern with all these deals being struck, methods of viewing are multiplying. “LOVEFiLM’s streaming is available across multiple platforms, including the iPad, major game consoles and internet-connected TVs”, says Chris Bird, Film Strategy
Director at LOVEFiLM. And other VoD providers have joined the rush to make their films compatible with as many devices as possible.

If distributors can strike a balance between their balance sheets and consumer demands, this could be the beginning of a beautiful friendship for VoD and cinema.

Words by Alison Frank