Industry Dialogues: VOD vs SVOD

Sunday September 7 was D-Day at the Toronto International Film Festival. Yes, it was a day dedicated to distribution, but between the hours of 2pm and 3pm at the CBC’s Glenn Gould Studio, the ‘D’ also stood for ‘decisive’, as in who will have a decisive victory: (transactional) VOD or SVOD?

The Industry Dialogues session, moderated by filmmaker and Adopt Films founder Jeff Lipsky, united Killer Films co-founder Christine Vachon, Vimeo vp of content acquisitions and business development Sam Toles, Creative Future executive director Ruth Vitale and the BFI’s digital director Edward Humphrey to discuss, among other topics, transactional versus subscription-based platforms.

The intersection between art and commerce, navigating digital mediums and the legal implications of creative decisions were also on the agenda.

Lipsky opened the discussion by expressing skepticism about whether SVOD helps filmmakers and producers. For Toles, digital platforms are an eventuality. He explained that in the overall history of content distribution, “digital is a replacement technology for things that already exist.” He continued: “VOD is the natural progression of home entertainment. Conversely, SVOD is the natural progression or replacement for broadcast television.”

And beyond that? Toles had a prediction for that too: “The watershed moment for SVOD will be when HBO GO ultimately uncouples from their broadcast carrier agreements,” which, according to Ruth Vitale, is already a reality in Scandinavia. “You see? It’s already beginning. If I could access that quality content without having to pay for everything, I would definitely do it,” said Toles.

The discussion then turned to those who would access quality content without paying anything – pirates. Vitale, the former co-head of Paramount Classics (later Paramount Vantage) who now heads the anti-pirate group Creative Future, was understandably the most vocal as she cited a recent example.

“The Expendables 3 is an unusual circumstance,” she said. “If anybody read about it, that leak was somewhere between the lab and the courier of the studio. That doesn’t happen very often any more because there is security. There are people who are being arrested. Not any of that has been announced because it’s still an ongoing criminal investigation.”

Apparently there’s even an art to the way these bootlegs are made. “They are filmed within 24-48 hours of the movie being in the theatre and uploaded to the internet,” said Vitale. “They use hi-def cameras, take the audio from a hearing impaired jack [in theatres], and they marry the tracks.”

Relating the story of how she found a “pretty lovely, pristine version” of World War Z, Vitale even identified those whom she claimed might be behind such leaks. “Advertiser-supported and often by Fortune 500 companies. It’s organised crime.” For her, the source is “not two kids in a basement saying ‘Screw the man.’ It is Russian mob. It is people in drug trafficking, gun trafficking, child pornography, human trafficking, and piracy. It is just another business vertical.”

Another hot topic was DRM (digital rights management), namely the technologies that act as safeguards to control how content is being used. According to Toles, Apple is probably the number one pirated site online. “If you type into Google, ‘rip iTunes movie,’ you will have 20 solutions that cost $20 or less, some free, that give you the tools to remove DRM from an Apple download. Apple got rid of DRM on music because it was not effective.”

For Vachon, the challenge that producers and theatrical distributors face isn’t just pirates who want to have their film and see it too, but consumers who are content to remain at home and await the film’s digital release. “Most of our movies earned their money theatrically. Now, when something comes through the door and we decide to do it, we have to take into account what makes something theatrical. What does that even mean now? Is it something that has a story or bigness to it that will make you say, ‘OK, I am going to leave my house and go see that this weekend and have that collective experience with other people?’”