“We don’t think one size fits all,” Packer said of Lionsgate’s distribution strategy for the 40-50 movies it releases each year. He noted while some titles like the Matthew McConaughey feature Mud lend themselves to early VOD, other like the Twilight franchise’s Breaking Dawn still draw record revenue under the traditional model.
“You don’t necessarily have to tweak them, you have to find the right model,” he said in a keynote interview at B&C/Multichannel News’ On Demand Summit here Wednesday morning.
Packer noted there is flexibility in distribution that didn’t exist before; where Lionsgate is planning for up to seven windows including traditional, early viewing and early electronic sell-through. Likewise, one of the biggest changes he’s seen is the percentage of revenue derived from these alternative distribution windows.
“VOD is now 10%-15% of box office, a few years ago it was 5%,” he said. In fact 2012’s The Impossible made $6 million through on demand viewing, one-third of box office gross, a phenomenon that wasn’t happening five years ago.
The windowing strategy of course requires cooperation with theaters that pay to exhibit the films. “We are very careful to be incredibly respectful of the windows,” Packer said. “You don’t want to push them too hard.”
But he noted that in the case of Lionsgate’s Margin Call and Arbitrage, the multiple distribution strategy didn’t cannibalize each other – polling found that an overwhelming majority of people who went to theater didn’t know the films were on VOD and vice versa.
“I look at that as more of a challenge, that we hit on all cylinders and don’t miss one,” Packer said.
One way he’s found to draw new viewers to old library titles is giving them what he calls a “digital car wash” which involves redoing the trailer in HD, making it less than 60 seconds and optimizing its cover artwork for viewing on an iPad. It then re-launches it like a brand new film, resulting in a “major uptick in rental,” Packer said.