The ‘new normality’ drives PVOD and TVOD for movies

Dataxis held a new virtual panel on Tuesday, June 30th, entitled ‘The ‘new normality’ drives PVOD and TVOD for movies’ The event was attended by experts on the issue, such as Carlos Sanchez, VP Distribution Americas at Legendary Entertainment; Gustavo Castro, Content Manager at Movistar Argentina, and Marco Garcia de la Cruz, General Director at Cinépolis Klic.

Regarding the TVOD model evolution before the pandemic in Latin America and the US, Castro reported that the massive streaming business ‘started in 2011 in the region with Netflix, and it helped us a lot as a starting point’. Also, the executive said that ‘today, there is not much difference between content that works in cinemas and the transactional one’, and highlighted the good performance that ‘Frozen 2’ and ‘Joker’ achieved in the TVOD model for Movistar. ‘People are willing to pay to access that content at their homes’, he said. In turn, Garcia de la Cruz mentioned that, in Mexico, ‘it is very common to have weekends where a movie like ‘Joker’ is in the first transactional places, but also Mexican cinema is very powerful on platforms’.

‘The first trials of the PVOD model were made in 2010/2011, and the difference with nowadays is that there are many implications between PVOD and SVOD, depending on the content company that places the product on the market’, Sanchez said, quoting as an example, Disney’s launch of the movie ‘Onward’ on PVOD, which is also available on Disney+ under the SVOD model. ‘The consumer was used to a release rate that is breaking’, said the executive. In this regard, Castro stated that, for more emotional than rational reasons, customers are willing to pay more to access premium content. ‘At Cinepolis Klic, we have the pre-sale of movies available. When a movie is released in movie theaters, we   sell it. Many movies are very successful in the pre-sale stage, knowing that those who access do not get any discount or any different content, but the guarantee of having the movie pre-bought. I think the content moves wills and masses and leads to decisions that are often not very rational’, he affirmed.

Regarding the transactional impact on platforms from April to now, Castro stated that ‘we saw a peak tied to ‘Frozen’ in March, in all types of consumption, both linear TV, SVOD and TVOD, which, although it was attenuated , it was maintained over time’. In addition, the executive reported that ‘compared to February, in March the users who rented content increased 43% and, if we compare May with February, the number of rentals increased by 8%, and 19% more movies’. Likewise, Garcia de la Cruz stated that, during the pandemic, at Cinepolis Klic ‘we decided to focus our efforts not so much on making Klic generate income, but on making as many people as possible aware of the platform and logging in to it. We made partnerships with Uber Eats, Coca Cola and other companies, and we multiplied by 6 the number of clients that come to the platform in a week’. Also, the executive said that the number is currently decreasing, but they are selling twice as much content as they were before the pandemic, and in April and May 3 or 4 times more titles were sold than before the pandemic’ In addition, he pointed out the strong dependence that exists between Cinepolis Klic and cinema premieres. ‘We are betting on other types of content, which can be monetized via transaction’, he anticipated.

‘Due to the closing of cinemas, we wanted to continue being in our consumers minds, and we enabled some cinemas that we uploaded in Uber Eats and, when buying soft drinks or popcorn via Uber Eats, a Klic rent was included’, reported Garcia de la Cruz.

Regarding the future of film studios and producers and if they are going to launch their own platforms or choose to work with those that are already established in the market, Sanchez said that ‘in the TVOD model, it is not worthwhile for the studios to create a D2C platform, because it does not make sense at the moment. Studios are often not the fully owners of a movie. In addition, the rules of production and distribution are changing a lot’, he said.

‘Cinepolis ended 2019 as its most successful year in all its history We have never sold as many movie tickets in movie theaters as last year. Going to the cinema is a social experience. We have seen that the film industry has survived technological advances and we are confident that the cinema experience will always be predominant’, said Garcia de la Cruz. In addition, Castro indicated that ‘there are different ways for content consumption that will be maintained and will not change. In Argentina, renting a film costs less than a third of the value of a movie ticket’, he highlighted, and reported that ‘there is a whole business around the experience of going to the cinema linked to merchandising, which TVOD does not grant’. 

‘One benefit of the TVOD business is that it creates data, and that is an advantage. This information is very valuable, and can inform future business decisions, and it is a window that subscription companies do not always offer to production companies’, Sanchez said.