‘Margin Call’ changes VOD picture

Following up on yesterday’s discussion of Ed Burns’ new ultra low-budget movie Newlyweds, here is a recent Variety article about the movie Margin Call which has offered another variation on the traditional model of marketing and distribution:

“Margin Call” takes a harsh look at Wall Street economics, but in the smaller world of independent film, returns have been bullish.

Bizzers are calling the Roadside Attractions/Lionsgate release a game-changer: In eight weeks of release, the Kevin Spacey-Zachary Quinto drama has become one of the biggest day-and-date video-on-demand releases yet, seeing VOD revenues of well over $4 million while the pic was playing in hundreds of theaters. And the theatrical performance has come as a surprise to many who thought the film’s potential was limited: Pic’s taken nearly $5 million in box office, considerably more than most day-and-date VOD releases.

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Likely not seeing that much box office potential in “Margin Call,” exhibitors didn’t put up the kind of opposition they did when Universal planned to release “Tower Heist” on VOD three weeks after its theatrical release. But there are still roadblocks to doing a day-and-date release: The only NATO member that will book a film that’s opening the same day on VOD is AMC, while AMC and Landmark require the distrib to four-wall theaters — at a cost of more than a million dollars. The rest of the theaters that booked the pic, which played at 199 locations at its highest point, were independently owned.

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Interestingly, exit polls two weeks into the film’s release showed that 98% of theatrical filmgoers didn’t know the pic was also available in their living rooms for $6.99, so it seems that VOD didn’t significantly cut into theatrical.

It’s not surprising, since “VOD has a very lousy marketing machine at the moment,” Cohen said.

Nevertheless, video-on-demand returns a much higher percentage to distribs than theatrical rentals do, and the physical costs are much lower, making it an attractive option for distribs.

This is yet another salvo in the battle between studios and exhibitors we have discussed previously including here. While it would seem that offering movies on VOD at the same time they are in theaters is a response to the sense of consumers’ mentality the last several years — we want our entertainment how and whenever we can get it — it’s hard to shake the feeling the real driver here is the studios’ push for profits. That vision they’ve had for decades of debuting movies to consumers in their homes while bypassing at least some or even much of theatrical exhibitor costs is emerging into view as the technology has finally caught up to the fantasy. Now it’s just a matter of testing the waters, seeing what works with consumers, then figuring out how to coexist with movie theater chains.

For more of the Variety article, go here.

Margin Call is currently available on my VOD for $9.99. How about your system? Have you seen the movie yet? Where: Theater or VOD?

And in a somewhat related article, filmmaker Ti West writes an open letter re his new movie The Innkeepers. His movie hits VOD a full month before its theatrical release. The letter is a plea to people not to bit torrent it to death.

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