For years, filmmakers flocked to the Cannes Film Festival to sell their independently financed movies, confident they'd soon see their work exhibited in movie theaters. Like so many show business dreams, those visions have been vanishing quickly as numerous distributors of film-festival fare closed their doors after losing money or corporate support. But there's a potential savior on the horizon called video on demand -- and it may be hiding somewhere inside your cable television box.
Just as the videocassette and the DVD brought untold billions into studio coffers, video-on-demand distribution may deliver some much-needed economic relief to independent cinema, those often highbrow dramas and low-budget genre films made outside the studio system that have been struggling to turn a profit. It's likely that of the hundreds of movies headed to this year's Cannes festival (which opens Wednesday), only a handful will attract an American theatrical distributor, but scores may land video-on-demand deals.
"I think it is inevitable that it will succeed," said John Sloss, a lawyer and leading sales agent for independent film who this July will launch his own video-on-demand cable service, called Cinetic Film Buff. "Imagine the coolest, most imaginative film-literate person programming your Netflix queue. That's what this channel can be."
Unlike some Internet-based movie services, such as Amazon on Demand and YouTube Screening Room, video-on-demand movies arrive on your television set, not your computer. Cable subscribers with VOD channels can pick from several dozen independent films; with just a few clicks on the remote, the video-on-demand movie starts in seconds, rather than a more limited number of films that begin at prescribed times, as is the case with pay-per-view titles.
Some big Hollywood movies can also be purchased and viewed on VOD, but only well after a film's theatrical run has been completed and other windows of distribution have closed. Video on demand for independent movies is usually available during -- and sometimes even before -- a movie gets to theaters, if it makes it to the multiplex at all.
These first-run video-on-demand movies cost as much as $10 a viewing and often about half of that, with an estimated 40 million U.S. cable television households now carrying one of the several VOD channels now running. The studios have avoided this kind of video-on-demand deal, fearful that an early release on cable television will upset exhibitors and cannibalize DVD and pay-TV income. As a result, so far, there's only a handful of first-run movies available; finding them can be difficult, and the majority of VOD titles are movies you've never heard of, like "Red" and "Trail of the Screaming Forehead."
The VOD experience has been a mixed bag for some indie filmmakers. Although it offers exposure and a venue for audiences to watch their movie, VOD doesn't provide much of a financial payoff. Nevertheless, some top directors have embraced the delivery system.
Oscar-winning filmmaker Steven Soderbergh's call-girl drama "The Girlfriend Experience" doesn't arrive in theaters until May 22, but it's already available on Magnolia Pictures' VOD service; the "Erin Brockovich" director employed a similar release schedule for last year's Cannes title "Che."
Likewise, the Demi Moore-Michael Caine crime drama "Flawless" scarcely made a ripple at the box office last year, but its video-on-demand sales have surpassed $2 million. The Irish slasher film "Shrooms" played at a number of film festivals but sold less than $3,000 of domestic movie tickets. The outcome was far less gruesome on video on demand, where "Shrooms" is approaching $1 million in gross revenue, distributor Magnolia Pictures says.
"This has turned out to be the most efficient and best distribution paradigm we've come up with so far," said Magnolia's Eamonn Bowles.
For the distributors of independent film, VOD offers a cost-effective end run around most showings at the multiplex, where costs for even a limited national release can total $500,000. The way some forward-looking filmmakers and the VOD channel programmers see things, the new technology can bring their movies into corners of the country that rarely would have a chance to see new films that played in Cannes or other leading festivals at a fraction of the cost of a theatrical release.
"It is the wave of the future," said Andrew Herwitz, whose Films Sales Company is a prominent vendor of independent movies. "But the future is not yet here."
IFC Films, the most aggressive buyer and distributor of VOD releases, now operates two VOD channels, one for movies in limited theatrical release and one for films that have appeared only at festivals and will never make it to a theater. IFC acquired nine movies that premiered at last year's Cannes festival and picked up several others being sold at the concurrent film market.
Jonathan Sehring, the president of IFC Entertainment, was sold on VOD's prospects after the 2006 IFC production "Kill the Poor" failed to attract a theatrical buyer.
"We felt that the VOD platform would be able to get the movie into as wide as possible a release with as little [film print and advertising spending] as possible," Sehring said. "The new generation of filmmakers realize that the business has changed, and they realize that if their movie is going to be seen by the widest possible audience, it doesn't matter to them if it's seen on an iPod or at the Ziegfeld."
But even some of IFC's better-known VOD releases are hardly making a killing in the emerging format. The critically acclaimed Italian mob drama "Gomorrah," which IFC bought after the film premiered at Cannes last year, has grossed about $1.5 million in domestic theaters. Its VOD numbers are small in comparison, about 85,000 purchases, for net revenue to IFC of about $250,000.
When producers sell their movies to a VOD packagers like Magnolia Pictures, Sloss' Cinetic Film Buff, IFC's In Theaters or Festival Direct, it's unlikely they will get a meaningful paycheck in return -- perhaps as little as $10,000. Although the VOD distributors say they are sharing revenue with their filmmakers, they must first recoup their marketing and distribution costs, and then deduct any advance payments they've already made to the filmmakers.
Joshua Safdie, the writer-director of last year's Cannes movie "The Pleasure of Being Robbed," said he hasn't been impressed with how his film has been released by IFC, which gave the comedy a tiny theatrical release before putting it up on its VOD channel. He said he hasn't received any additional VOD revenue.
"It's doing great things for certain people, but I'm not feeling it," said Safdie, whose new movie, "Go Get Some Rosemary," will premiere at this year's Cannes festival and is looking for an American distributor.
Safdie said that unlike movies in video stores, where you can pick up the DVD box and get a feel for what the film is about, VOD shopping feels impersonal, removed.
But Matt Dentler, the former head South by Southwest Film Festival programmer who is now collaborating with Sloss on the new Cinetic VOD channel, said the key would be smart curators picking movies that can bowl over some segment of the audience -- even if they are long-forgotten library titles that deserve a fresh look.
"This is home video," Dentler said. "The same kind of thing that works at Blockbuster on a Saturday night is what's going to work on VOD."