The following is the first of a series of monthly newsletters, curated by Michael Gubbins (SampoMedia), highlighting key issues of relevance to European VOD services. The topics will form part of a report on the progress and potential for independent European VOD services, which EuroVOD will publish later this year. This newsletter is naturally dominated by the impact of the Covid on the market.
A NEW NORMAL?
It is sensible to remain cautious about drawing long-term conclusions from the current Covid crisis. That has not, of course, stopped a wave of speculation about the end of cinema and its replacement by streaming companies in a supposed ‘new normal.’ Predictably, the main commentary is centered on the idea that the boom in online viewing will finally kill off cinemas. The case for a permanent shift in audience habits is based on an extremely low base of knowledge in exceptional circumstances. Even some clear evidence – such as the overall increase in film watching online – needs context, as the absence of alternative forms of entertainment, particularly sport, whose absence may have a strong effect on consumer habits. Analysis is often distorted by the domination of global streaming us tech giants, such as Netflix and Amazon, though they do at least offer some indications of consumer demand. At the beginning of May, Netflix doubled its new subscriber forecast in its first-quarter earnings report, from around 7m to 15.8 million, with 85% of the higher numbers coming outside the US market – and across Europe, it even temporarily reduced its streaming quality to ensure that networks were not overloaded. Netflix, in particular, has benefited from its investment in local productions with strong demand for local language work, in countries such as Spain. Lack of transparency makes it difficult to fully understand of fact-check the claims of the global streaming services, but original content is proving a driver for audiences. EuroVoD is particularly interested in how increased use of online services has affected both the independent European VoD sector and European film more widely. While there are signs of promise, it is essential to gather more data and to take a broader view of developments. EuroVoD is currently working on a survey of members and a study of the sector, which will offer serious insight. That report will be available later this year, but advances have clearly been made. Independent VoD services, counting an average of almost 80% of European films in catalogue, including Filmin, Curzon Home Cinema and Picl, have all publicly reported a major lift in subscribers the number of visits, accounts and transactions. Some European films have done well, though distributors claim lack of theatrical revenues represent a “catastrophe.” While no one wanted this situation, independent European VoD services have sensibly used a unique opportunity to find new audiences, market their offering and to increase viewing of European film. The intelligence that emerges from this period will be invaluable for future growth. For the full list of EUROVOD members and the measures taken for the Covid-19 crisis.
A RELEASE STRATEGIES, ONLINE FESTIVALS AND DIGITAL MARKETS
EuroVoD members have not generally supported the idea that VoD and cinema are in direct competition. There is recognition of the value of theatrical release and the cultural importance of cinema. Many European online services cooperate with cinemas and festivals, or even own cinemas or manage film festivals. But a period in which cinema release has not been possible has been offering a useful perspective on how far online-first release can make an impact with audiences. It is of course important to recognize the extraordinary circumstances of forced cinema closures but the number of releases of high-quality European films going straight to VoD is useful in the understanding of today’s consumer habits. Day-and-date releasing in cinemas and other platforms has been a battleground for many years, and one studio at least has decided to make a decisive push into new release models. Universal claims its release of Trolls World Tour made more than €100m in premium VoD download and has announced that it will now release other future blockbusters day-and-date – with the expected immediate backlash from multiplex companies. Universal, of course, has a vested interest in talking up the success, given that its percentage of revenues for digital release (80%) are far higher than theatrical releases (50%). It is also not clear yet how far genre and audience will affect results: the effectively captive children’s audience for Trolls may not be representative of overall potential. In Europe, the decision of distributors to launch a film day-and-date strategy is not an easy one. Holding back key films is risky, losing the buzz of cinema and festival release and potentially running into an impossibly overcrowded theatrical market when doors do finally open. And even if cinemas open, it is far from clear at this stage whether audiences will feel confident about going. VoD services have had the chance to test assumptions about the value of theatrical release as the primary marketing push for later online release. Some of the best performing films online have been films that enjoyed festival success before the shutdown: in the UK for example, Koreeda’s The Truth, and Safy Nebbou’s Who You Think I Am were still riding the buzz from the Venice and Berlin festivals respectively. The cancellation and postponement of a series of festivals, most prominently Cannes, will be a useful guide to the potential of online festivals and particularly markets. The dynamics of the film market are strongly based on physical screening events with hits being driven by talk on the Croisette and elsewhere. There is perhaps a psychological link being broken in these new markets with buyers’ first contact with work on a small screen. They may also be looking at films in terms of their potential for the VOD market first, at least in the short term. Some film festivals have been bullish in their switch to digital. Some, such as IDFA, Gothenburg and Transilvania IFF, have their own VoD offering that already runs alongside their event – and they have seen a strong upturn. Other festivals have taken radical steps to stay in the public mind, such as Tribeca’s deal with YouTube. Documentary is a genre that seems to be succeeding in the crisis, not least because, in most of Europe, it has very limited cinematic exposure. Markets are a more complex proposition, requiring a higher sophistication of offering. The Marché du Film is planned for June 22-26. A long-term switch to more digital trading may open up the market to new players to compete with the established giants. We may be heading towards a new online ecosystem. A major consideration for VoD services in that future must be tackling piracy. One aspect of the Covid crisis that should not be under-estimated is the big increase in copyright theft. Illegal services remain a bigger threat to film growth than media chronology.
Below are links to other news stories and analysis. The dominance of the news agenda by corona-virus can easily lead us to forget that VoD was already expanding very fast before cinemas closed. The growing enthusiasm was supported by many factors, including changing patterns of audience demand, original content, new services and technology breakthroughs. And it is still those factors that will drive future success. Poland expects contributions from VoD broadcasters / Cineuropa Channel re-brand, new VOD service for Czech Republic & Slovakia / Broadband TV News DPP report reveals chaos in VoD content supply / TVB Europe 5 cool European startups shaking up the film industry / EU-Start-ups Covid-19 and the Telecoms Sector: 5G Developments May be Disrupted or Delayed During 2020 - ResearchAndMarkets.com / Business Wire You can read the PDF version of the text and all URL links above here.
NEW EUROVOD MEMBER
POLKATULK / SCENSO.TV
We are happy to welcome a new EuroVoD Core Member! Polkatulk offers streaming solutions and blockchain technology for SVOD, including rights management and reports, with a progressive web application.
They also operate the platform, Scenso.tv, European OTT SVOD platform dedicated to the distribution of all performing arts, through a blockchain-secured solution.
The next workshop of the European VoD Meetings will take place in Venice, Italy, from September 1-4, 2020, on the privateisland of San Servolo, in partnership with the Venice Film Festival. We are diligently monitoring the evolution of the situation and measures in place for Covid-19. The deadline for application on our website is June 30th. The fees include: tuition, pedagogical tools, accommodation on San Servolo private island, meals, business facilities.
This year, we also partnered with the Venice Production Bridge for our 2nd VoD Market Day on September 4th. The day-event of public conferences and B2B meetings will be attended by the participants of the training as well film professionals, tech companies, journalists and film institutions.
European Audiovisual Observatory Yearbook
The Observatory published their yearly digest of key trends in European media. Precovid-19 crisis, the Yearbook 2019/2020 includes key data on cinema, television, video and VoD. You can download the full report here.