November 22, 2020
It may not be possible to build a better mousetrap, but the folks at ROW8 insist they’ve built a better digital movie distribution system.
It’s tailored to current market conditions, with movies increasingly being released to theaters and, with little or no delay, to home viewers through premium video-on-demand (PVOD) due to the COVID-19 pandemic.
John Calkins, CEO of the upstart transactional video-on-demand service, says ROW8’s proprietary technology platform was built with PVOD in mind, “so it has already implemented the studio-required higher level of security.”
And now that PVOD, due to the pandemic and consequent shuttering of movie theaters, has evolved from Hollywood dream into a necessary reality, the ROW8 platform’s ace in the hole is a unique “geo-locator” that allows movie theaters to participate. It works like this: In areas where a new movie is playing theatrically, digital sales or rentals can be blacked out, but in areas where theaters are dark or a movie is either not showing or has concluded its run, consumers will be able to buy or rent the film digitally through the ROW8 platform. Exhibitors and distributors can negotiate market-specific trade arrangements, based on exhibitor marketing support and the degree to which the home availability potentially is near a playing location.
“We know how close a customer is to their local theater, and we can choose what movies they can see at home, based on what is playing in that theater in real time,” says George Christoph, who founded ROW8 four years ago. “We can geo-fence the local trade area for certain movies, or share the in-home revenue with the nearest theater — it all depends on the terms of the partnership agreement struck by the distributing studio with the local exhibitor.
“Our technology is already patented and we believe that this business model is particularly valuable for smaller to mid-size films, as those have struggled to find a path to theaters over the last few years, and even more so now, during the pandemic.”
Based in Los Angeles, ROW8 is run by Christoph and Calkins, an entertainment industry veteran who has held key digital distribution posts at Sony Pictures Entertainment and Warner Bros. The company launched two years ago with exclusive U.S. digital distribution rights to foreign and independent films, but last year veered toward the mainstream through the signing of licensing deals with four major studios: Paramount Pictures, Sony Pictures, Universal Pictures and Warner Bros. Disney/Fox licenses were added earlier this year.
ROW8’s core service is digital movie sales and rentals, much like FandangoNow, Redbox On Demand, Google Play and Microsoft Movies & TV. But with windows on shaky ground due to the shuttering of movie theaters during the pandemic, Calkins says, he sees an opportunity to do things a little differently.
“As in many business areas, we continue to see the unfortunate pandemic as an accelerant for digital behaviors,” Calkins says. “Certainly, there is more of a spotlight on digital consumption, and an acceleration of consumer shift to OTT services. But even more interestingly, we think the market challenges are really forcing the discussion between studios and theaters about how to best create value for films through integrating windowed theatrical releasing, and eliminating any ‘black periods’ for consumer availability, which we think is a relevant question at a local level, not just a national one.
“The inefficiency of having films largely out of theaters in 30 days but, somewhat arbitrarily, not allowed in homes for 90 days, has really come under scrutiny. And having theaters closed has put everything on the table.”
This “inefficiency,” he adds, “is only magnified when we look at the smaller films.”
“There really are two different flavors,” Calkins says. “One is blacking out availability of a wide theatrical release, by market, if it’s in theaters there, or if theaters are open. But the other is for smaller films that aren’t getting a wide theatrical release. We can protect their theatrical platform release, but still open up availability, digitally, in other parts of the country they might not otherwise get to. Take a small, art-house film — there might be no art-house theaters in Montana, so the film will be available digitally there on day one. But in a market like Los Angeles or New York, the film will be blacked out until much later in its run.”
Post-pandemic, Calkins says he expects PVOD to continue to be a viable business model — and the digital distribution of movies, both during and after their theatrical runs, will continue to be a growth business.
“People will still go to theaters on date nights or to see a hot new event movie on the giant screen,” Calkins says. “The theatrical market might shrink a bit in terms of overall size — admissions, after all, have been trending downward for the last 20 years — but there is no reason to believe that all of a sudden everyone will want to stay in their living rooms 24/7 indefinitely, particularly once we have a vaccine. Talent, too, will still want to see their work on the big screen, and having that distribution capability as a major studio will be a key point of differentiation over the large streaming services.
“The only question, then, is how do theatrical windows again create the best economics for films — not just for tentpoles but even more so for the smaller ones that drive frequency and product breadth? That’s where a more dynamic approach to making films available to home audiences could be a key capability for both distributors and exhibitors.”