Independence on-demand

Curzon Home Cinema builds on the UK company’s 82-year old cinema brand.

The booming online video space has given rise to a number of independent film services that are offering an increasingly compelling alternative to mainstream players like Netflix, reports Andy McDonald.

The growing maturity of the online video space has created on-demand giants out of the likes of Netflix and Amazon. However, an interesting recent trend is the growth of independent services that are focused on offering a curated collection of movies and programming to a more narrowly defined audience.

Power of curation

On-demand movie service Mubi has taken a subscription model that limits choice to a slimmed-down collection of 30 films at any given time, while user-generated video site Vimeo has started programming its Vimeo On Demand service with a focus on premium content and original programming. Elsewhere, UK film stalwarts the BFI and Curzon both started their online efforts with TVoD stores, though the BFI also now offers a subscription option and Curzon has plans to follow suit by the end of next year. At the same time We Are Colony, a new entrant to the market, offers a value-added TVoD model that aims to take the DVD extra into the digital age.

The British Film Institute’s online transactional film store, BFI Player, first launched in 2013 but celebrated two major milestones last year. The first of these was last summer’s launch of Britain On Film – a major digitisation project that has made thousands of clips from the national and regional film and TV archives available to watch online for free. The second was the launch in November of a subscription film offering called BFI Player+ that gives users access to a curated collection of movies for £4.99 (e6.38) per-month.

“What we think we offer that’s unique about BFI Player is the diversity of choice and the diversity of models – so there is a rental, a subscription and a free-to-watch element of what we do,” says BFI digital director Edward Humphrey, claiming the BFI complements other online services. “If you look at the rise of the niche SVoD services both here and in the US, I think there’s a real emerging appetite from audiences who are happy to have a Netflix or an Amazon subscription to deliver the majority of their mainstream offer. Then they’re looking to add to that.”

According to Humphrey, the SVoD offering is a “one of the core pillars of how we think audiences will discover and rediscover the very best in classic and independent film”. Offering 300 titles, each film is handpicked and titles are gathered into collections such as ‘the art of seduction’ and ‘Italian classics’. Each week UK film critic Mark Kermode also recommends a title from the collection with short introduction video explaining his choice.

“My perspective is that one of the greatest challenges in video-on-demand is convincing people to explore a wide collection. We all know that what gets selected to appear on page one and two of most menu screens is what gets watched,” says Humphrey. He claims that “people still like guidance as to what to watch” and the Kermode introductions drive a lot of traffic to the service.

While the 300-title SVoD catalogue may grow slightly, Humphrey believes that audiences “appreciate a concise collection”. It’s a bet that already appears to be paying dividends. Humphrey claims that sign-ups to BFI Player+ have surpassed expectations and that the revenues the BFI earns from the subscription product is “already at a par with revenue that we earn from our rental service”.

UK cinema chain Curzon takes a similar curated approach to its online film offering – though its transactional model is focused around day-and-date releases in a bid to bolster its established bricks-and-mortar business.

Curzon Home Cinema director Philip Mordecai says that the 650-700 title-strong TVoD collection is aimed at a specific audience and does not cater “for everyone’s likes and dislikes”. The executive, who formerly worked at MGM Networks’  European movie channel and for then Liberty Global-owned channels business Chello Zone, says: “I’ve come from the linear TV and pay TV world and we’re curating Curzon Home Cinema, in an OTT environment, like a TV channel.”

Curzon’s independent cinema brand dates back to 1934. In 2006 the firm also acquired UK film distribution company Artificial Eye, meaning Curzon now buys, distributes and shows films. With its online presence, Mordecai is keen to stress the “vertically integrated” nature of the business – “all the way from theatrical to digital screens at home”.

“We don’t actually call ourselves a VoD platform; we call it a Curzon virtual venue; it’s taking the Curzon to someone’s house,” says Mordecai. With Curzon Home Cinema the company releases in excess of 70 titles per year day-and-date with their cinema release. The idea is to offer independent films to those that might not live near an art-house cinema, or who simply prefer not to go. It also gives an outlet to films that are “cast aside” at the cinema in favour of major Hollywood fare.

“There is no canibalisation in our eyes because films don’t get carried everywhere,” says Mordecai, dismissing the idea that Curzon Home Cinema could damage its traditional cinema business. “Actually there’s more money to be made in day-and-date films than there is in going to the cinema.”

Curzon charges £10 for many day-and-date films – the average nationwide price of its cinema tickets. Mordecai concedes that while this is higher than competitors like Amazon the company’s aim is to get people to choose and engage with the Curzon brand. “We’re competing with a lot of forces out there right now,” he says. “For us that means we have to give people access to something in a convenient way, but also in a meaningful way.”

Global aspirations

We Are Colony is a newer entrant into the TVoD market, having launched its online store last spring. While it too is looking to

Paul Thomas Anderson-directed doc Junun launched exclusively on Mubi in 2015.

capture a slice of the independent film market, founder and CEO Sarah Tierney says that the company is skewing to a younger, slightly less art-house crowd than the likes of BFI Player and SVoD service Mubi. The UK-based firm is also globally focused and already claims registered users in 115 different countries.

We Are Colony’s unique selling point is offering additional content to film lovers for the price of a rental or purchase – including interviews, film stills, deleted scenes and making-of documentaries. “I had a real sense that there is an enormous amount of content created during the process of production that goes un-exploited. That’s the traditional things that once would have been on a DVD special edition,” says Tierney. “I just felt that for the right fan that extra content gives them a much deeper experience and a deeper appreciation for the film itself.”

So far the company has released some 60 films – including a number of day-and-date releases – and Tierney says it aims to release up to another 100 titles this year. “At the moment they’re coming from the indie film sector. I think it’s worth saying that we curate for a slightly more mainstream audience. So it tends to be the indie titles that are either very strong genre or really talent-driven,” she says.

“My view is that we’re now in a market of total abundance and actually what consumers are looking for is curated, trusted, quality homes of content,” adds Tierney, claiming We Are Colony can be “picky, frankly, about the titles that we take”.

While North America and the UK currently account for 60% of We Are Colony’s traffic, Tierney says that Japan and other Asian countries are now “commonly in our top-10 by visitor and by activity” – an interesting trend given its focus on English-language content. She says that adding subtitles to We Are Colony is on its roadmap –  a move that promises to expand its international footprint further.

Mubi is another player with international aspirations. The subscription video-on-demand service dates back to 2007, when it first launched under the name The Auteurs. The firm’s unique business model is based around a 30-film offering, with a new title added to each day that users can access for a month. The focus is on international, art-house and independent films and the service is available in more than 200 countries, with China to follow next after Mubi struck a joint venture deal with Asian entertainment company Huanxi earlier this year.

With China the one notable market that Netflix is yet to crack, the move is a significant step. Under the deal, Huanxi will invest US$40 million (e35 million) in Mubi China and take a 70% stake in the business. It will also invest a further US$10 million in Mubi directly, giving Huanxi an 8% stake in the SVoD service and Mubi a valuation of US$125 million.

“China is going to be the first market where the majority of our content is going to be local. So you’re looking at 70% of the films that we show in China are going to be Chinese films and 30% foreign,” explains Mubi founder and CEO Efe Cakarel. Currently the Mubi offering differs by country, with each having its own line-up based on the rights Mubi has in that territory. However, until now, the choice of films has not been significantly tailored.

Cakarel says that Mubi’s home market, the UK, is its biggest, but is now also starting to focus on the US, having opened a New York office there last summer. The company is also in pursuit of more major studio deals, having signed agreements with Paramount and Sony in the UK last year. “The Sony deal took me three years to close, but in the end, all of our conversations with all the majors are going really well. The model makes sense,” he says, predicting that one-by-one Mubi will agree terms with all of the majors. However, broadening the available pool of movies will not alter the company’s core strategy, with the Mubi boss a strong advocate of curation.

“Choice isn’t everything. On the contrary, we think that there is a paradox of choice. There is so much stuff out there that you really need someone who is an expert to choose the best for you,” says Cakarel. “Thirty films curated well is more than most people in the world will ever need. Thirty films is also enough of a number that we can curate a very wide range of films – from classics to contemporary, from drama to comedy, from a documentary to an action film.”

Rather than compete with the likes of Netflix, Cakarel says that Mubi offers additional choice. “We see ourselves as a very compldementary service to Netflix and others. “I’m a Netflix subscriber and I actually love it. Their TV content is brilliant. But films is where they are not doing a great job and that’s where we come in,” he says.

Content is king

Similar to Netflix, Mubi is now looking to concentrate more on exclusive content after it made its first foray into this area last year by debuting director Paul Thomas Anderson’s latest film Junun – a documentary that follows Radiohead guitarist Jonny Greenwood an a musical tour around Rajasthan.

“It [Junun] did so well that we shifted gears significantly on that front. So over the next year you’re going to start seeing us premiering films exclusively on Mubi – it just makes sense,” says Cakarel. He claims Mubi will be “really active” at the Cannes Film Festival this year trying to buy exclusive film rights for select territories. Longer term, the firm is also looking to originate its own content.

“As we increase our subscriber base and cash flow we will be able to invest in films at a much earlier stage. At this point, we wouldn’t be producing the whole thing, but we would be participating in the production of it and in return we [will] get online rights and some equity participation. The films that we are evaluating right now and we will be investing in by the end of the year will be shot next year and will be released by the end of next year, or in maybe 2018,” says Cakarel.

The fact that original content can add significant value to an online video service has not been lost on Vimeo. At MIPCOM in October, Vimeo announced its first ever slate of original programming, which included The Outs, a gay-themed web series from Adam Goldman and Sasha Winters. At SXSW recently, Vimeo announced its second slate of shows, which includes a new series from longtime Vimeo creators Jake Hurwitz and Amir Blumenfeld, called Lonely and Horny; and Vimeo’s first original documentary, Wizard Mode, from Salazar Films, a company that has had its content ‘Staff Picked’ 10 times by Vimeo’s curation team.

The BFI launched its BFI Player+ SVoD service in the UK in October.

All the titles will appear to buy on Vimeo On Demand – the TVoD section of the service that allows Vimeo creators to sell access to their content alongside a curated set of ‘new and noteworthy’ Vimeo recommendations, which include a host of professionally-produced films and documentaries.

Vimeo’s head of global content acquisitions and distribution, Sam Toles, says that in the two years since he has been at the company it has “invested heavily” in content for Vimeo On Demand – even though the majority of videos on the platform are uploaded by users “while we sleep at night”. Currently, of the more than 34,000 titles on Vimeo On Demand, Toles says that roughly 3,000 are programmed by the site and are the result of the partners, production companies, networks and creators it has relationships with.

In terms of its original output, Toles says that Vimeo is keen to elevate the talent already using the site to post content. “For us it’s a little bit different than how Netflix, Hulu or Amazon approaches it. I think it’s very important for all platforms to showcase their work and to gain audience. But for us, it really is about reaching into our community and showcasing work that deserves to be seen and highlighted,” he says. “I think when you look at Netflix and Hulu and Amazon, they’re much more representative of the evolution of broadcast television. I think we’re really doing something special that is unique and native to the web by bringing creatives that are incredibly talented and impressive and showcasing them and allowing them to earn real money to continue to build their careers.”

Future models

While Vimeo’s premium curated content offering is firmly focused on transactional content, the company does allow site users, like the National Film Board of Canada, to offer their own “mini-subscription channel” using its on-demand platform. A broad Vimeo SVoD offering is not something that exists, but Toles says “we are absolutely exploring all of the options when it comes to how we evolve our business”.

At We Are Colony, Sarah Tierney says that “subscription is something that we’re looking at,” though she admits that this is “a very competitive space now” because of the might of businesses like Netflix and Amazon Prime. “I’m optimistic about the transactional model, although obviously from a business point of view the lifetime value of a subscription is more interesting,” says Tierney, adding that if We Are Colony were to go down the SVoD route in the future, it would be as an additional tier to its existing TVoD business.

“My personal view is that we’re seeing diversified loyalty to platforms. A couple of years ago, the average US consumer had something like 1.2 VoD accounts and now they have 3.6. What we’re seeing is people understanding that the Netflixes of the world aren’t the limitless catalogues they once thought they were, and they’re increasingly willing to shop around for the content that they want,” says Tierney.

At Curzon Home Cinema, Mordecai says that subscription is also in its thoughts, outlining a clear plan to introduce SVoD as part of a “value-add solution” in the next 18 months. This would again be a curated offering, featuring “around 100-200” films. “We have a membership club – Curzon cinemas membership – under various tiers. It would be attributed to those tiers – a bit like Amazon Prime,” says Mordecai. The plan is part of a wider development effort that the company has in place for its Curzon Home Cinema offering. Mordecai says there are “a lot of technical pieces coming into play to make Curzon Home Cinema more like a cinema” – subtle touches like adding film trailers and the classic British Board of Film Classification ratings cards ahead of streamed content.

The company is also looking to expand outside of the UK and Ireland. “It’s about picking the right market and picking the right partner to enter that market and those conversations are happening now,” says Mordecai. “In the next two years you’ll start to see Curzon internationally in a very meaningful way with day-and-date film releases.”

Mubi’s Efe Cakarel says it too is constantly evaluating how best to reach its audience – and would not rule out moving down a linear TV route. Though he stresses that there is no “active plan” to launch a Mubi TV channel, it has has considered the idea. “We are agnostic to the delivery channel,” says Cakarel. “OTT we think is the best, and it’s working really well, and this is where the world is going, but when you come to a certain scale we might find it attractive to reach our audience through various other different channels.”

The BFI’s Edward Humphrey predicts that audiences over time will be more comfortable taking a “porfolio approach” to entertainment, as the balance linear and on-demand TV continues to change. With Netflix and Amazon now powerful content commissioners in their own right, Humphrey believes this will bring even more upside for viewers.

“The mechanism by which people are subscribing and the means by which they’re watching are changing, but in essence there’s no real fundamental shift,” says Humphrey. “There’s much more choice in the market in the context of how you subscribe, through which type of service you subscribe and on which device you watch. That choice, I think, is benefitting everybody. For me it feels like a golden age.”

While services like Netflix, Amazon and iTunes win out in terms of scale and volume of content, the idea of the ‘global niche’ is becoming ever more pertinent in the digital age. Independent services from companies like Mubi, Curzon and the BFI may not offer an alternative to these mainstream online options, but they cater to specific tastes and are already proving there is an clear and increasingly global business case for curated content.