The action sports video industry has been on a serious roller coaster ride for the last several years, both with internal changes, including the elmination of major players VAS and WAX, and perhaps more importantly, with the constantly changing landscape of digital media.
Almost a year ago, The Orchard launched a new division, The Orchard Sports, focused on digital media distribution within action sports and lifestyle films. It tapped former VAS GM Danny Grant to fill the same role, and the company has exploded, helping endemic film makers take advantage of a wide array of emerging digital channels for their new projects, as well as their existing catalogs—creating numerous new revenue streams from existing assets.
After hearing Grant speak at The Meeting 8 on content distribution, we caught up with him to learn more about the evolving world of video production, distribution, and consumption.
It’s been almost a year since The Orchard Sports launched as a digital distributor and a lot has gone down in the film industry over the year. What do you see as the highs and lows for action sports content in 2012?
It's a crazy time for action sports content in general. The model has shifted. There are so many avenues for content to be seen. These films, for the most part, are marketing spends to showcase a team, sell a board, or communicate a brand’s culture. With the format shift from DVD, I think a lot of brands, out of desperation for just wanting something to be seen, put premium content on free places like YouTube and Vimeo. That's not sustainable, so we're seeing that shift back to a paid model where there is revenue to offset the expense. Its good for the producer community and the brands who fund them.
A look at some of The Orchard’s analytics:
The word "madness" comes to mind. I thought this is what producers and brands wanted, but the response has been a little overwhelming. It has taxed the resources a bit, but it has also helped us fine tune the model. Aside from this year’s releases, which the Torstein film will probably be one of the bigger, I think it’s the films that have been "green lit" for 2013 that are the true testament.
The model of action sports film distribution was completely fragmented. Sponsors were pulling out, films weren't getting funded, and indie filmmakers we're thinking of finding another line of work. What we've brought to the table has reinvigorated the whole game. Producers can now clearly communicate to sponsors which stage their project will be seen on and the results show. Its an awesome mix between eyeballs and revenue that has pumped major life back in this genre of filmmaking.
You’ve been focusing a lot on helping producers digitize their catalogs. What’s that process like and what kind of benefits are producers seeing? Got some examples?
Along with all the new releases that come out, we've worked hard to bring the catalog titles to the digital world. Its been challenging to say the least, but we've made a lot of progress. Assets from years back aren't always in the best shape, and with today’s delivery specs what they are, often a lot of extra work is needed. We've got an expert team on hand that works with these type of issues everyday. Just one of the many ways The Orchard Sports is positioned as more of a partner—we want to see these films for years to come.
What kind of revenue streams are you seeing coming in from old titles?
Its been truly rewarding to see older catalog films that might be out of print on DVD or just MIA start to turn revenue for a producer digitally. It's not much compared to a new release, but it’s growing each year and the shelf space is exponential. Producers aren't going to get rich, but it’s not zero, which 12 months ago it was. We've brought so many films back to life that may have just been sitting on a hard drive somewhere doing nothing. Maybe they only generate $1,000 a year each, but again that's better than zero and is further exposure for the sponsors.
There's no reason to say these won't continue to generate like that for years to come. The Hulu platform has turned into the greener pasture for a lot of catalog releases. Many producers including Matchstick Productions have embraced Hulu because of its high penetration into web-enabled TV's. Search around, you'll be surprised what’s available there.
What other digital revenue streams are you focusing on with your clients and what opportunities do you see on the horizon?
We're staying pretty focused on Download, VOD (Video on Demand), and Subscription VOD models. We want to do it right and better than anyone else. There is a TV component brewing for 2013 and a large YouTube channel initiative ramping up now. All this will benefit our producers and the sponsors of the films.
Where should producers be trying to market and sell their digital assets? What do you see as the most important channels at this point?
Everyone starts at the core with a media partner and moves to sponsors and athletes. You'll get the highest concentration of fans that will likely want to watch you film.
Avenues like YouTube, Twitter, and Facebook are great to spread the word about a release. There is a print and digital component to the marketing too. One of the angles we work hard on is the retail marketing side. Getting the film featured, or under the “New & Noteworthy” sections. Anything we can do to help point people to the purchase. I've got a laundry list of "best practices" that I work on with producers to make sure we're covering all the bases.
What viewing platforms, Playstation, AppleTV, etc., do you see becoming most important and why? How can producers prepare for that?
It's a really exciting time for sure. There's an incredible race shaping up. You have giant companies like Apple, Google, Sony, Microsoft, and Amazon all spending tremendous resources to get people to use their device/ service to consume content. I've been advocating for a while to filmmakers and brands to just go with the flow. As long as the model makes sense, which in this case these are not fly by night companies or start-ups, provide them the film, and let them fight it out. In the end, the consumer will decide which platform they want to purchase a film on. And it’s usually the one with the credit card info already on file. Consumption through convenience is the name of the game there.
What are the biggest trends you’re seeing on the digital distribution front?
Pricing and release date are two trends that have shifted quickly in the last 12 months.
We're seeing a lot more films release with download and VOD rentals on the same day. They are no longer windowing a later VOD date. I think a lot of producers were afraid that fans wouldn't pay full pop when they could rent at $4.99. In reality, and I think the sales analytics data we've provided helped with this, producers have seen that VOD is a small fraction of the sales and are typically outnumbered 10 to 1. In this market, core fans prefer to own and watch a film over and over. The VOD rental crowd is typically people that are on the fringe of the sport. It's a win-win for brands and filmmakers to expose both sides. When it comes to pricing, we’re seeing the model move upwards to be more on the level of Hollywood releases. A+ premium banger films are now releasing for $12.99 in HD on iTunes and there have been some tests at $14.99HD. That's a long way from when the Forum video was released at $1.99 back in 2007.
I'd also add that if a DVD is being released as well, more producers have found that making download available the same day has no effect on the other. There are digital customers and physical customers. They are separate. I believe holding back the digital release only equates to more piracy—your digital consumers will get frustrated and resort to a torrent. Which means less DVD sales and less Digital sales. You can look at someone like Red Bull Media House which releases everything on the same day… digital, physical, theatrical, they're even experimenting with live streams on street date. I like the trend and the exposure. If the film is good, it’s equating to better sales.
The Orchard Analytics seems to be one of the things producers and brands really like. What are some of the features?
It’s one value add that I am really proud of. We get mountains of data supplied to us from the digital retailers. We make all of that available to our clients. The data is used in so many ways from tracking performance in a specific region to comparing download to rentals. You could spend all day in there slicing the data in different ways. We have a dedicated team that works year round on coming up with improvements and new features to the dashboard. We just rolled out integration with Facebook that lets you track fan engagement data with digital sales activity. The entire mission of the analytics package is to provide the producer or brand with information they can use to make smarter marketing decisions and evaluate release strategies in real-time. The data is truly priceless and we're happy to share it.
Tell us about this service you have called Concentrated Music.
Music is always one of the more challenging parts of filmmaking. It can get expensive to find and license. The Orchard has a massive library of digital music available. They've put together a portal called Concentrated Music for our producers to log into, and peruse at their leisure. Its got an incredible search function where you can filter by things like mood, BPM, genre, et cetera. You can create playlists, select similar artists, select filters and so on. It also has a “Pandora” like feature where you can have it playing in the background. Producers can even upload a video file to quickly overlay a song to see if the track is working. When you’ve found something you like, click “license” and one of the nice people in the music department will get in contact with you. The service is a great value-add and something we're proud to provide everyone that works with us.
Producers have some options in the space; tell us what differentiates The Orchard Sports from the others?
There's a couple guys in the action sports’ space and plenty in the overall film distribution world, but none that do exactly what we do. You have consultants that act as agents managing a producers rights and then there are encoding houses that will charge filmmakers a hefty fee to get to a few platforms, but that's it. They have no vested interest in your film actually selling. Only that you deliver more films so they can charge you more fees. When you compare apples to apples, The Orchard Sports is a different caliber all together. With us there are no ingest fee's and we have dozens of value add services that we provide our clients. We set out in the beginning to position ourselves as partners, and it’s something I'm really proud to say we've achieved. Many of the indie filmmakers are so focused on the creative and production side, that the business side of things slips. We've come in to lend an honest hand and look out for their best interest in maximizing reach and monetizing the content. The trust is earned. Nobody offers the worldwide reach we provide on all the major digital platforms with the technology to support. Retail merchandising muscle, real-time sales analytics, impeccable royalty payment track record, seamless encoding and ingest, the list goes on and on and sums up why we quickly have become one of the largest suppliers of sports content digitally worldwide.