Cinemas, films and the digital world

As the Berlin Film Festival celebrates the best of European and world film – a blog about the opportunities for cinemas, films and the digital world.

In so many areas, I see digital tools disrupt longstanding practices.  That disruption brings challenges – but many opportunities, too, with new innovative ways suddenly available to meet specialised consumer needs. The overall effect is a benefit for consumers, for our economy, and our society – as long as you can adapt properly to digital developments.

The film sector is a very good example. Currently some rules and practices in that sector restrict flexibility – like rigid ‘release windows’. (‘Release windows’ set out when films can be released in cinemas, on DVD, online and so on – so that, for example, a film can’t be shown online until a certain number of weeks after the cinema release. Such “windows” can be based on regulation, public funding conditions, industry practice or individual negotiations). For me, while such “exclusive” periods may be important to finance some films, or get the most out of them, rigid and uniform rules can make it harder for the sector to capture digital benefits.

This lack of flexibility troubles me. Because, in fact, different outlets for films – cinemas, TV, DVD, online – all have their strengths, and each can respond to different consumer needs. After all, the advent of cinema never stopped people going to the theatre; TV coverage doesn’t stop people attending live sports. Call me old-fashioned, but I can’t see digital channels beating the magic of cinema: like as a way to spend a first date, or a fun social evening out.

Yet others may prefer digital channels – like busy commuters, or the parents of young children (assuming that first date went really well!). And, let’s get real, for many of those people, the lack of a legal digital channel won’t make them go to the cinema instead: it will mean they won’t see the film at all, won’t recommend it to their friends, or maybe they’ll just resort to online piracy. Then they’ll miss out – and the film industry misses out too.

If there’s no one-size-fits all for audiences, nor is there for films: while some films might be better served by a first exclusive cinema release – like blockbusters with a big audience appeal – others may do better by going online earlier. And the lower distribution costs online may especially suit low-budget, niche films which have limited access to cinemas. Indeed some films have gone online first to generate a “buzz” – before building on that success with a cinema release.

Social media can give new films a huge publicity “buzz”. And there’s already evidence that experimenting with release windows boosts all sales and paves the way to cinema success: look at Bachelorette, released in the US via Video on Demand a whole month before the cinema release; it topped the iTunes Movie chart.  Plus, digital channels offer an important way to shore up home-viewing sales, at a time when DVD sales are declining. The US has seen big progress by releasing films earlier on VoD – earlier than on DVD or even before cinema release – to meet changed consumer expectations.  And maybe there’s a new way to finance production here: like through TV sequencing, or even by direct investment from online movie sites.

In just one year, US digital sales of film and TV went up 35% to over $800m; beating all expectations. Here in Europe, we could not just boost revenues; but also bring our own films to a wider audience – after all, how many of the 915 European feature films made in 2011 did you see; and how many were you able to see?

In short, the opportunities of digital are huge. To seize those opportunities, all parts of the film ecosystem need to be able to experiment: those who stick their heads in the sand will miss out. One illustration: one recent film was boycotted by cinemas because it had already been released online. What interest does such a boycott serve? It’s cinemas shooting themselves and their audiences in the foot. After all, 6000 people had watched that film online: but around 400,000 had watched the online trailer, and maybe were looking forward to seeing more in the cinema.

Don’t get me wrong. I do not want to impose anything on the industry: not simultaneous or near-simultaneous release, nor shorter windows. And I see cinemas as important parts of our communities and cultural lives, they are rightly supported by the EU’s MEDIA programme and national funds, and should continue to be. But as one film-maker put it to me recently in Cannes, “we make films for the audience – not for the silver screen”. And I know that many in the industry are just as frustrated as I am by the existing lack of flexibility, the opportunities we are missing, and the damage to the goals of cinema overall.

It’s frustrating particularly because so many of us share the same objectives: to stimulate and reward the creation of new films, and to benefit everyone in the chain – from filmmakers, to cinemas, to audiences. That’s certainly my goal. And I’m convinced that the best way to achieve it is with the flexibility to use new, exciting digital channels to the full.

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