Cinemas and VOD platforms join forces to combat COVID-19

Posted on July 2, 2020 by Davide Abbatescianni

Amid the ongoing COVID-19 pandemic, cinemas and video on demand (VOD) platforms have joined forces to combat the crisis. But how are these joint initiatives being implemented? How will they affect the future of film distribution? And what are the main benefits for the participating cinemas? Davide Abbatescianni, Ireland correspondent for Cineuropa, spoke to representatives from three distribution outfits to find out more. 

It is difficult to predict how the audiovisual industry will react to the effects of the coronavirus pandemic in the long term. As a result of the outbreak, many countries closed all cinemas for weeks and unprecedented box office losses have been recorded all over the world. Back in mid-March, Statista’s media researcher Amy Watson reported that the global film industry had ‘suffered a revenue loss of $7 billion due to the coronavirus’ and another $10 billion loss should be accounted for April and May’s inactivity.

As of today, crews are gradually going back on sets, cinemas are slowly reopening (though with limited seating capacities and a number of restrictions) and new opportunities are arising. One result of the crisis has been the full digitisation of the cinema experience offered by many exhibitors and distributors via so-called ‘virtual cinemas’. This article will focus on the successful release strategies implemented by three of these VOD initiatives, namely Kino Marquee (USA), MioCinema (Italy) and Modern Films’ streaming platform (UK & Ireland), which were made possible thanks to the cooperation of a number of participating cinemas. Hopefully it will be an inspiring read that may encourage new partnerships among industry decision-makers.

Tracking sales and sharing profits

Kino Lorber’s Director of Theatrical Marketing Nick Kemp disclosed that they started working on the initiative when they got word that cinemas were closing in mid-March: ‘Within the course of a week we had set up our virtual cinema platform, Kino Marquee, built off our existing TVOD [transactional video on demand] platform Kino Now. The biggest challenges were getting it set up at breakneck speed, making sure we could track sales by cinemas so as to properly attribute revenue, and creating a brand new workflow while we all transitioned to working remotely.’

Then, Kemp explained how their profit model works: ‘We track which sales are generated by which venue’s virtual cinema in the back-end. We deduct the transactional fees charged by the credit card companies and our video platform (totalling about $1.50), then split the net revenue 50/50 with the cinemas. So far, our top performing titles are Beyond the Visible: Hilma af Klint, a documentary about the pioneering abstract artist released by our sister company Zeitgeist Films, and the Cannes Jury Prize-winning Brazilian film Bacurau. We’ve seen success with international, documentary, and American independent films alike, which we attribute to our independent cinema partners’ cultivation of their audiences.’

A still from Bacurau. Credit: Kino Lorber.

Among the main benefits, Kemp highlighted the possibility for independent cinemas to generate revenue while their doors are closed and, most importantly, the opportunity to keep the lines of communication with their audiences open during isolation. In addition, the role of the newsletter was particularly useful in attracting new viewers. Regarding this, Kemp added: ‘We include an opt-in option for our email newsletter when people sign up to watch films on Kino Marquee, which is necessary so they can watch on various devices like Apple TV, Roku, and Amazon Fire Stick/TV. As a result, our list has grown significantly and we are able to communicate directly with customers about new offerings.’

Overall, Kino Lorber’s efforts are bearing fruit: ‘The reception from cinemas, press, and audiences has been truly incredible. We’ve been able to play our films with cinemas we’ve never worked with before and hope to continue those relationships. We’ve gotten coverage in regional markets where it is usually very difficult to secure reviews for independent films. And the support we’ve seen on social media from audiences who want to make sure their beloved local cinemas survive this difficult time has been heartwarming. Our top performing films are grossing over $100,000 each and the initiative as a whole has grossed over $650,000 to date.’

Towards a richer cinema experience

Next, I spoke to Gabriele D’Andrea, Lucky Red’s Head of Theatrical Distribution and Marketing. Italy’s MioCinema, founded by Lucky Red in collaboration with Circuito Cinema and MyMovies, kicked off in May with the long-awaited national premiere of Ladj Ly’s drama Les Misérables. The initial network of partners included 75 cinemas, but it has been constantly expanding since then. D’Andrea revealed the model adopted by the platform: ‘Exhibitors are an essential part of this project and users are able to select their own favourite cinema. Cinemas receive 40% of the profit from each PVOD [premium video on demand] rental.’

Besides the obvious advantage of maintaining a good level of engagement with their audience, participating cinemas ‘may also increase customer loyalty with special discounts once they reopen, in order to build a strong connection between cinema-going and home viewing, while strengthening the cinema-audience relationship.’ Furthermore, MioCinema is also attracting new, younger audiences to the world of independent cinema, who were already used to digital viewing.

A still from Les Misérables. Credit: MioCinema

Even though MioCinema was born during the coronavirus pandemic, its objectives are not limited to providing a response to the temporary closure of cinemas. ‘We have medium and long-term goals. Our mission is to build a bridge between cinemas and the digital world through a series of offline and online services, and to create a proper community for auteur cinema in Italy. We aim to select titles that normally wouldn’t be screened at physical venues – due to the harsh competition – but we’ll do it while still complying with the usual market windows.’

All in all, the expansion plans for MioCinema are very ambitious: ‘The key to success is integration. We began with renting films, but the increased cooperation efforts with cinemas will bring more exclusive content such as masterclasses, interviews, special discounts for both online and offline activities, advanced ticketing services and much more. We’re also evaluating the option to develop dedicated websites that will include these new services for each individual cinema. It will be a very innovative way to enhance the cinema offering.’

Encouraging innovation in outreach and online events

At the end of March, British distributor Modern Films announced the creation of its own streaming initiative. The platform involved 22 partner cinemas in the UK and the Republic of Ireland and opened with the release of Haifaa al-Mansour’s The Perfect Candidate.

Speaking about the revenue model, CEO Eve Gabereau said: ‘At first, we just included a drop-down menu at checkout for the cinema of the viewer’s choice. For this, we offered 10% of net proceeds to the cinema. This was across new releases and library titles of our own and of some other distributors, such as Republic, 606 and Signature. Then, once we created a full listings site with bespoke screening rooms for each cinema, we increased the box office split to 50/50.

‘The success of this model relies on cinemas communicating to their audiences and driving people to watch films through their site or social channels. We supply the films and run the back-end, as well as encourage innovation in outreach and online events. For events, we plan and manage them and tie them into the related film, but we do not charge for them, nor are they geo-blocked — unlike the films which are only available for streaming in the UK and Ireland and are either priced at the £9.99 PVOD level for new releases or £4.49-£4.99 for the library films that are available across TVOD platforms.’

A still from The Perfect Candidate. Credit: Modern Films.

In general, benefits for participating cinemas are two-fold. Firstly, cinemas are still able to offer fresh content (films and online events) despite being closed. Secondly, during this period they can develop ‘a sustainable model for their reopening, where they can play a film on release for a first run in the cinema and then move it over to a virtual screen to keep it showing for a longer time within the same booking and promotional timeframe.’

Audience expansion was also recorded by Modern Films’ streaming platform: ‘We have also partnered with brands, shops, venues, festivals and other organisations on creating branded virtual screening rooms. This has been particularly successful on previews where we are seeing about 500 streams and 5000 views per one-off event. If we put that in the real world of a cinema preview screening and talent Q&A, we would be very happy!’

The feasibility of Modern Films’ streaming initiative in the post-lockdown phase, however, will depend on some crucial factors: ‘I see a sustainable business case for our new model of virtual theatrical screenings, but there needs to be full participation on the part of the cinemas that recognises this set of rights as an extension of theatrical and neither a replacement of them nor the beginning of the TVOD window,’ Gabereau concluded.

The exhibitors have their say

Finally, we had the chance to discuss the reception of Modern Films and MioCinema’s initiatives with representatives of two exhibitors: Anna Navas, director and film programmer of the Plymouth Arts Cinema, and Monica Caloffi, owner of Florence’s Il Portico Multisala.

Speaking about Modern Films, Navas stressed that keeping their audience engaged was the main benefit and added: ‘We were able to direct them to the platform to watch films that were in our programme but we were unable to show in the cinema. It was advertised to our main cinema audience of 6500+ people via e-flyer and Facebook.’

Meanwhile, Caloffi highlighted the opportunity to keep in touch with their viewers during the quarantine and the possibility to introduce livestreams with special guests free of charge. MioCinema’s selection of titles was also in line with Il Portico’s mission, where many independent films were already being screened before the lockdown.

The financial aspects and the prospect of continuing the initiative in the post-lockdown phase, however, seem to be a more complicated subject. ‘This is quite a difficult question to answer’, says Navas, ‘as our main marketing focus when things return to “normal” will necessarily be directed at getting audiences back into the cinema again to watch as much as possible on the big screen. That is the only way we, as a small independent venue, can survive and income from this distributor-share model is going to be negligible in helping build financial resilience.

‘Maybe at some stage we would be interested in exploring it to direct people to see a film they might have missed in the cinema and is now available to stream, or a film we haven’t been able to screen. If people chose it over Amazon or Netflix as a way of watching it might be a good, easy way to support us too. Having said all of this, which might sound quite negative, I do want to say how grateful we have been that Modern Films has thought about offering this during lockdown. It has clearly been a difficult time for every aspect of the sector and it has been a very welcome gesture to help keep films alive.’

While both exhibitors agreed that income derived from initiative was very far from covering the incurred losses, Caloffi sees some potential for the future of these partnerships: ‘We will continue to work together. The catalogue of MioCinema is very rich, and the price range for the titles vary from €2,99-3,99. I believe this could be a good proposition.’

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