Historically, the film industry has been obsessed with one principle data point: the Theatrical Box Office.

Theatrical Distribution has so much power in our industry;

• Press attention & reviews are more likely if your film is theatrically released.
• Opening Weekend Figures are crucial to ensure you expand to new theatrical cities. You have 3 days to make your mark.
• Total Box Office Gross might trigger a set sales figure with a streaming platform. If you can’t prove your interest in theatrical, you might not secure additional deals.
• Certain theatre chains require a theatrical holdback excluding any other exploitation for a period of 90 days to 16 weeks depending on the territory.
• You are required to have a theatrical release to qualify for certain awards (including the Oscars & BAFTAs). (However, in theory, in previous years you could have qualified with $0 in Box Office…).

IN LIGHT OF THE REALITY THAT WE MAY NOT HAVE ANY THEATRICAL BOX OFFICE TO REPORT FOR 3, 6, 9, OR MAYBE EVEN 24 MONTHS, HOW IS OUR INDUSTRY CHANGING, AND WHAT CAN WE IMPROVE FOR THE LONG TERM?

When we measure the merit of a film based on a single point (the total Box Office Gross), does the film still have significance if there is no box office to monitor? With the rise of the virtual theatrical experience, how do we monitor if these experiments are productive and meaningful for the films taking part and if audiences are supporting them in big numbers? What other measurements should we be conducting to give a more rounded view of film titles?

Since the arrival of VOD, we have neglected as an industry to create any form of monitoring and analysis in a standardized form across the sector. It would require an industry-wide acknowledgment that this reporting analysis would be helpful for everybody. It would also require both platforms, distributors, and filmmakers working collaboratively to share key data points.

For a virtual theatrical release, we are using the language of the ‘virtual ticket’. We are creating or adapting platforms to bring forward a ‘cinema-like’ programming schedule online. This includes timed screenings launching at particular moments to encourage a collective viewing experience as we would have in a cinema.

HOWEVER, THIS ISN’T A CINEMA, IT’S A NEW VERSION OF VIDEO ON DEMAND (VOD) WHEREBY CONSUMERS ARE ASKED TO EITHER RENT OR PURCHASE A DIGITAL COPY OF THE FILM DURING THE THEATRICAL WINDOW, IN COMBINATION WITH LOCAL THEATRES.

We are therefore in the grey zone. If we are marketing to our audience members and booking films under the provisions of a theatrical release pattern why then are we not releasing the data as to the performance of these films in the same manner?

IS IT NOT TIME TO RADICALLY RETHINK HOW WE RECORD DATA ACROSS OUR INDUSTRY? DO WE NEED NEW STANDARDIZED REPORTING METHODOLOGIES TO CREATE A TRACKING SYSTEM SIMILAR TO THE COMSCORE BOX OFFICE TRACKER TO MONITOR PERFORMANCE ON VOD PLATFORMS & OTHER RIGHTS CATEGORIES?

With the likes of the Universal claiming that Trolls World Tour was the ‘highest grossing film on VOD in history’, how do we know that? When the data is not publicly accessible across the sector we are not able to all benefit from that revelation.

When certain distributors claim that ‘this many views would have equated to X thousand dollars at the box office’ we are not using accurate data analysis abilities. Who is to say that someone who paid $5 or $10 online would have paid $15 and took the time to travel to a live cinema and therefore equate to a gross box office amount when that is not what they did? They sat at home, opened their laptop, and paid a small figure to consume the film at home.

It is great to see that the Art House Convergence network has started a data project whereby independent theatres can share their #VirtualBoxOffice results. If you submit data, you can see everyone else’s. This is a great start and we would encourage all theatres to take part.

But there needs to be more. ComScore is the industry standard for Box Office monitoring, but there have been no announcements to date about capturing #VirtualBoxOffice data. Various groups monitor some VOD metrics, but not all data points because there is a lack of standardization across the sector. You can’t compare like for like, therefore you can’t correlate accurate analysis.

When comparing the transition to digital in the film sector, with the music industry, we see very different approaches. The music industry started to include digital purchases information in the official charts as early as 2005 and launched an ‘audio streaming’ chart in 2014.

You can literally see the number of streams alongside tracks you are listening to on Spotify. As both industry and consumers, you are aware of the scale of reach & revenue for each track. How can the film industry learn further lessons from the transition to digital performance tracking in the music industry, and no longer rely on our ‘compact disk’ era of physical revenues…?

Surely now is the time to radically rethink how we process data across our industry and adapt our thinking as we enter a new hybrid virtual landscape.

ALONGSIDE FINANCIAL TRACKING FOR ‘VIRTUAL BOX OFFICE TICKETING’, WE SHOULD ALSO RADICALLY RETHINK HOW WE COLLECTIVELY USE AUDIENCE DATA SO ALL LEVELS OF THE VALUE CHAIN CAN THRIVE.

Previously cinemas had all the power over marketing information to their audiences. Many were told ‘we can’t share this data it is owned by the cinema and therefore no one else can access it’. As part of data protection laws, they were absolutely right. GDPR wasn’t created for no reason; we need to process audience data correctly, with expressed opt-in approvals.

However, when was this restrictive for the long term financial health of a film. Take for example a filmmaker who presented work at a Film Festival who would like to know who bought a ticket for their film in the hope that when the film is officially launched in cinemas they could re-contact them to let them know to spread the word. There are very few organizations that currently allow this data flow, or who have set up the data protection clauses to process it.

Now that we switch to a virtual world the tables are starting to turn. We have already seen theatres requesting access to audience data through the distributor’s virtual theatrical release platforms. This is a valid request. If a virtual theatrical release has been planned in partnership with the theatre the theatres wish to send thank you notes to those customers during this crucial time. Who’s to say that a distributor didn’t also want to say thanks when an audience member came to see all of their films in the theatre previously?

How will the dynamic between Exhibition and Distribution change in the future in regards to our responsibilities around marketing efforts and data collection/access as we transition back to a hybrid virtual physical space after COVID?

How will we create new versions of data analysis that doesn’t obsess over the physical box office number and instead correlate multiple different data points to show the films’ true performance? Will enough members of the film industry collaborate on standardizing the reporting processes of all right categories? Can we find more mutually beneficial ways of sharing audience information across the sector (with the permission of the audience members each time) in order for us all to thrive?

With NEON announcing a hybrid Theatrical & Non-Theatrical Virtual Release for Mat Wolf’s Sundance hit Spaceship Earth, this also breaks open the ideas around theatrical holdbacks. NEON announced that they are partnering with “movie theatres, museums, book stores, arts, and cultural organizations, nonprofits, restaurants, and other severely impacted small businesses to participate in the release will give them the opportunity to stay connected with their communities”.

This level of partner coordination is common with Impact Distribution titles (films that aim to promote some form of social impact upon release), where many distributors in the past have been reluctant to allow ‘non-theatrical’ engagements until later in the release. This move from NEON is a welcome statement that we can convene a variety of partners to drive audiences, not just theatres, as part of a cohesive virtual strategy.

The interesting question is how & where they will publish the results of this strategy, and what will constitute ‘Virtual Theatrical Box Office’ and what will be VOD…

AS WE ENTER THIS NEW WORLD, WE FEEL THAT CLARITY IS REQUIRED ACROSS THE SECTOR.

We launched our #DigitalPerspectives webinar in the first week of the lockdown, and have featured speakers from those organizations leading the charge on the new ‘Virtual’ world including Kino Lorber, Film Movement, Picture Motion, YouTube and Eventive.

We believe that we need clear definitions of the new emerging rights categories as the first step towards a radical rethink of data analysis across the sector.

Let’s look at the definitions for the new categories and how this will apply to technology choices and revenue allocation. Crucially to move away from the grey area of theatrical / VOD that is currently taking place.

We must establish these principles now so that when venues start to reopen, we can activate hybrid virtual/physical strategies where required.

Virtual Theatrical Rights Classification (ThVOD)

Definition: A virtual screening in partnership with a traditional ‘theatrical’ venue, powered by a Transactional VOD (TVOD) platform, for a timed collective screening where marketing and revenue are split between distributor & theatre.

Rights Properties: ThVOD

• The ‘Virtual Theatrical Screening’ takes place in partnership with a traditional ‘theatrical’ partner who ‘books’ the film as part of their existing programming strategy.
• The screening takes place at a coordinated time, in the same way in which the physical venue would book events. Multiple screening times can be booked, with authorization from the distributor.
• There is a cap on the number of audience members who can buy ‘tickets’ for the event, similar to the size of the existing venue.
• Patrons buy a single ‘virtual ticket’ to watch the film at the time listed on the ticket. (Allowances of 2–3hrs are provided for any technical difficulties in starting the film).
• Revenue is collected either by the distributors ‘virtual theatrical’ platform or the theatres existing ‘box office’ ticketing site. The report must include the Capacity of the screening, Number of Tickets Sold & Gross Ticket Value.
• Revenue is split by % between distributor & exhibitor based on pre-agreed terms.
• Minimum Guarantees are offered by theatres where possible (vs Virtual Box office splits) once commercial activity returns to more regular figures.
• Virtual Box Office figures are reported to parties on Mondays as per regular events, whether delivered by theatres or distributors.
• Virtual Theatrical Box Office Data to be shared with the industry for monitoring purposes.

Virtual Non-Theatrical Rights Classification (NTVOD)

Definition: A virtual screening in partnership with a non-theatrical partner (any venue other than a traditional theatrical venue), powered by a Transactional VOD (TVOD) platform, for a timed collective screening where marketing is shared between the distributor and non-theatrical partner. Revenue is either generated via a fixed Non-Theatrical Screening Fee or Box Office split between the distributor and non-theatrical host.

Rights Properties: NTVOD

• The ‘Virtual Non-Theatrical Screening’ takes place in partnership with a ‘non-theatrical’ partner who is not linked to a traditional theatrical venue.
• The screening takes place at a coordinated time, in the same way in which the partner would book events at a physical venue. Multiple screening times can be booked, with authorization from the distributor.
• There is a cap on the number of audience members who can buy ‘tickets’ for the event, similar to the size of an appropriate venue that the partner would have access to.
• Patrons buy a single ‘virtual ticket’ to watch the film at the time listed on the ticket. (Allowances of 2–3hrs are provided for any technical difficulties in starting the film).
• Revenue is collected either by the distributors ‘virtual non-theatrical’ platform or the partner’s ‘event ticketing’ site. The report must include the Capacity of the screening, Number of Tickets Sold & Gross Ticket Value.
• Screening License Fees are paid by Non-Theatrical partners OR revenue is split by % between distributor & non-theatrical partners based on pre-agreed terms.
• Virtual Non-Theatrical Box Office figures are reported to distributors within 1 week of the virtual event.
• Virtual Non-Theatrical Box Office Data to be shared with the industry for monitoring purposes.

Virtual Film Festival Rights Classification (FTVOD/FSVOD)

Definition: A virtual screening in partnership with a Film Festival, powered by a Transactional VOD (TVOD) platform, for a timed collective screening where marketing is shared between the distributor and Film Festival. Revenue is either generated via a fixed Festival Screening Fee or Box Office split between the distributor and Film Festival.

Additional Definition: A time-limited FSVOD right, to allow subscription streaming access to Film Festival Passholders for a time-limited period during the duration of the Film Festival (up to a maximum of 4 weeks from launch).

Rights Properties: FTVOD

• The ‘Virtual Festival Screening’ takes place in partnership with a ‘Film Festival’ partner.
• The screening takes place at a coordinated time, in the same way in which the Film Festival would book events at a physical venue. Multiple screening times can be booked, with authorization from the distributor.
• There is a cap on the number of audience members who can buy ‘tickets’ for the event, similar to the size of an appropriate venue that the partner would have access to.
• Patrons buy a single ‘virtual ticket’ to watch the film at the time listed on the ticket. (Allowances of 2–3hrs are provided for any technical difficulties in starting the film).
• Revenue is collected either by the Film Festivals ticketing site. The report must include the Capacity of the screening, Number of Tickets Sold & Gross Ticket Value.
• Screening License Fees are paid by Film Festival partners OR revenue is split by % between distributor & film festival based on pre-agreed terms.
• Film Festival Box Office figures are reported to distributors within 1 month of the virtual event.

Additional Rights Properties: FSVOD

The alternative is a ‘Film Festival Pass’ is offered to provide ‘steaming availability’ to festival audience members, the following may apply;

• The title is available within a Film Festival Library, accessible to all festival pass holders during the duration of the festival (plus an additional 4 week period if pre-agreed with the distributor).
• Audience members can choose their viewing date & time within the Film Festival timeline. Viewing is limited to up to 2 views per login.
• The total number of views is limited to a pre-agreed figure with the distributor. If views exceed the pre-agreed figure, the distributor is further compensated for the additional views based on a pre-agreed figure.

Required terms across all new rights categories:

• Geo-restrictions are required to a Country level (as a minimum) and refined to a State level, or City level depending on the capabilities of the technology platform.
• All technology platforms must adhere to Studio Grade DRM to ensure that the films are presented in the safest way throughout.
• Additional ‘Livestream’ content can be programmed around virtual screenings, with the distributors’ approval on the theme and/or speakers.
• Livestream content is owned by the party who produced the content (paid for the technical services, booked speakers, and marketed the Livestream event). Use of the Livestream content to be used by additional parties (distributor, theatre, film festival, etc) with express permission from the producing party.
• Data on audiences to be collected under data protection laws (and in line with EU GDPR) with the option for audiences to select to be contacted by the theatre or/distributor. Data only to be shared with the other party with clear ‘opt-in’ provisions.

Required terms across all new rights categories:

• Geo-restrictions are required to a Country level (as a minimum) and refined to a State level, or City level depending on the capabilities of the technology platform.
• All technology platforms must adhere to Studio Grade DRM to ensure that the films are presented in the safest way throughout.
• Additional ‘Livestream’ content can be programmed around virtual screenings, with the distributors’ approval on the theme and/or speakers.
• Livestream content is owned by the party who produced the content (paid for the technical services, booked speakers, and marketed the Livestream event). Use of the Livestream content to be used by additional parties (distributor, theatre, film festival, etc) with express permission from the producing party.
• Data on audiences to be collected under data protection laws (and in line with EU GDPR) with the option for audiences to select to be contacted by the theatre or/distributor. Data only to be shared with the other party with clear ‘opt-in’ provisions.

Final thoughts

There are many more conversations to be had and many more questions to be answered before we come to a place that the entire industry can agree on. However, we hope that you all agree that there is some radical thinking here that could positively affect how we understand our audiences and our performance in the new world.

We need to review how we can balance reporting across theatrical, non-theatrical, VOD, and more to present a more balanced view of the performance of film titles.

We invite you to join us for the #DigitalPerspectives webinar every Monday at 2 pm ET.

We also welcome your thoughts and feedback on the presented terms above to build towards a consistency for the sector during this time. You can reach out to our team at digitalresources@togetherfilms.org.