BEHINDWOODS COLUMN

Pay-per-View

Pay-per-View is called PPV in American parlance and divided into two. PPV of movies released in theater, and PPV of movies not released in theater (Indie movies).

PPV of released movies

A week from the DVD release date, this PPV comes to effect in cable networks and satellite channels. This is instant rental, and the viewers need not go to theaters or wait in queue at Netflix. (Yes, new movie DVDs are in such a high demand that one has to wait for weeks to get his turn for getting the DVD, if he orders a little late). There is no need to visit Wal-Mart and pay $20 - $29 for watching a movie once. You can watch a film with a relatively cheaper $4 - $6, but you can view only once.

Three years back, Comcast, America’s biggest cable TV corporation introduced 2-day rental scheme for its customers. That is, if you rent out a movie, you can watch it as many times as you want for two days.

Cable TV has big names like Comcast, Time Warner, Verizon FIOS TV, AT&T. Giants of Satellite TV include names of DirecTV and Dish Network. All service providers do not follow the same style in PPV.

To cite example, if the movie is rented for viewing in Camcast, the telecast would start immediately the moment payment is done. In the case of DirecTV, the movie will be continuously streaming in a channel or start in a pre designated time. The viewer has to rent out the movie by payment and will have to wait until the broadcast starts or catch the streaming channel.

Prices vary with service provider, so is the viewing experience based on the telecast format. Standard format (4:3, 480p) is cheaper than HD format (16:9, 1080p) by $1.

PPV of Un-released movies

These unreleased are 99% Indie movies. Reasons like non-availability of theaters and suitable producers drive the Indie producers to surrender directly to PPV. By the way, lot of foreign language is available in the PPV as well.

Another mode is called Same as Theater release. That means release in PPV as the same day of theatrical release. Theatrical release does not necessarily mean 1000-2000 locations. In this case it can be even a couple of theaters. These are orphan films, which would stray from Sundance to Cannes and finally yield to PPV.  They are costlier to hire ($6 - $8). Production and distribution houses receive royalty as usual for every PPV. Validity of the PPV is a shorter 2 months.

In the PPV deal, the satellite or cable company would take the collection of 40-50% the hands over to the distributor. The distributor, in turn takes 25% - 35% of that amount and the balance would be handed over to the producer. 

Internet (IPOD, PS3, XBOX, Wii, Amazon VOD):

This is pukka youth zone. Every game console has an internet link called store. The user can pay money online and purchase the games or movies he wants to. Games can be purchased and the movies can be leased. Within weeks of DVD release, the movie can be digitally downloaded from the net. Besides, websites like Amazon.com and service providers like itunes of Apple would have arranged for internet download of the film. All you need is a high-speed Internet connection and money.    

Also movies are directly released in the internet itself (not pirated or illegal releases). To give you an idea, Deepa Mehta’s Water was released in Google videos, for only whom willing to pay and watch. The income through this Internet release would continue for 3-5 months.

Pay TV:

Akin to HBO, Starz, Cinemax, Showtime, TMC (The Movie Channel) for which we pay dedicated extra charges on monthly basis and watch their movies in India. (Regretfully, only in India we get advertisement in pay channels, fetching money to the TV from advertisers also. In overseas, there are absolutely no advertisements in pay channels).

Every week, a new movie would be premiering in these pay channels. This release of a movie would start in 2-3 months from the DVD release. There is immense competition between these pay channels to buy a film. Nevertheless, HBO is the clear winner here. Again, Cinemax is owned by HBO. Though Star wins good movies occasionally as well, HBO’s library is huge. It is just colossal in comparison.

Once the TV buys the movie for a certain amount, the telecast spree starts. A movie would start running 4-5 times in the same day (Do you still remember the way Raj TV repeatedly telecasted Michael Madhana Kama Rajan?). The occurrence gradually reduces, and the movie would continue to be aired for the next 1.5 – 2 years.

An average movie is bought for $ 1.0 - 1.5 Million. 25-35% of this goes to distribution side and the rest is the share of the production house. This price would increase or decrease based on the film’s theater collection and goes as one-time settlement. The channel can broadcast the movie, as many times as it wants until the agreement is live. 

Foreign TV:

This is an extra package to the distributors. They could not expect continuous cash flow from this package and understandably, just dispose this off to the channels. Though the agreement has clauses of number of shows and limiting them with an expiry year, it is just uncontrollable. 20-40 of this income goes to distributors as commission; the rest is for the producers.

Network TV:

This is the free television channel available in any cable network. It would take a minimum of 2-3 years for a film to reach to this medium. However, the selling price for network TV is higher as well, reason being the vast viewership and the income generated from the advertisements. Distribution Company retains 25-50% of the income generated through this sale.

Beside this, soundtracks CDs bring in additional income. Ring tone magic does not work here.

No matter which part of the world it is, the distribution side (company / individuals) enjoys the major portion of the income than the production houses, which have invested all the money and went through all the torments of movie production. On the other hand, without these distributors, all the potential of the movie business, the secret tricks of this trade would not have been invented.

It is the distributors who created exceptional business models like Hollywood. Also it is the remarkable accomplishment of the distribution houses to create so many world markets for Hollywood and guided Cinema Industry to scale new peaks and made it what it is now.

It is hence evident that without the Cinema Business, there is no Cinema Industry.