Digital Windowing
The Sequel


The media industry today is at a crossroad. More players – like Netflix, Hulu, Amazon and YouTube – are in the content creation game, competing against legacy media for a ...
April 11, 2016

The media industry today is at a crossroad. More players – like Netflix, Hulu, Amazon and YouTube – are in the content creation game, competing against legacy media for a piece of the audience pie. All the while, consumer attention is shrinking, making it harder for content to break through.

But at the crux of this shift, is the ever-burgeoning number of channels through which consumers can receive media, be it through SVOD, OTT, freemium platforms, or even illegal downloading. And these players are changing the rights and distribution landscape on a global scale.

But there’s good news too: video content is expected to make up 80% of the world’s consumer internet traffic by 2019 (up from 64% in 2014). Demand for video is increasing. That means the companies that can get their content seen, have a great chance at succeeding in our evolving mediascape.

So what’s the best way for digital players, like SVODs or OTTs, to get their content noticed? And how do they balance the competing legacy media companies that are vying for the same windows of distribution.

For years, windowing was a relatively stable approach to distribution. In the movie business, it was standard for a major feature film to be released in theatre (usually for four to six months), before going to home-viewing 16 weeks later, different levels of broadcast windows, such as premium cable, until finally it became available free-to-air, roughly two years after the initial theatre run. Over on the TV side, first-run broadcast was usually followed by at-home media release, repeats and syndication.

Today, that formula is, well, out the window, with players like Netflix inserting themselves earlier in the distribution pipeline, and major studios like Lionsgate and Fox dusting off new strategies for digital releases all together.

Add to that the ever increasing presence of consumer-generated content on platforms like YouTube Red and Vessel, which are demanding exclusive-to-the-channel timeframes, and it becomes clear that the world of windowing is a wild west.

This wild west has been a slow build. Early on, if you knew only one thing about Netflix, you likely associated it with the term “binge-watching.” The SVOD became synonymous with people getting sucked into series, not coming up for air for days, until they’d successfully marathoned the entire show – start to finish. While DVDs and Blu-rays made binge watching possible, nothing facilitated the continuous stream quite like Netflix, which released entire seasons and series in a single bulk.

Early on, many linear players dismissed the notion of binge watching. However, the platform has said upwards of 61% of its audience binge watch shows regularly, which was a primary reason it continued to release its content in a bulk season-long format, even as it moved into the original creation space (which many believed would relieve the SVOD of the burden of having to release the series at once). That’s not to say people wouldn’t have been enamoured with Making a Murderer or House of Cards if the shows were released on a weekly basis, however both proved that shows could be insanely popular when fully distributed at once.

Marni Shulman, senior director, head of content and programming at Shomi, a Netflix-like service in Canada owned by broadcasters Rogers and Shaw, says Netflix and the binge-strategy also helped grow linear shows, such as AMC’s Breaking Bad. The series was popular and critically acclaimed, but as the seasons became available on Netflix to marathon, its popularity exploded, carried by word-of-mouth and easy access to past seasons.

And Netflix didn’t just innovate in the TV space: it has since started experimenting with day-and-date strategies, releasing feature films, such as Beasts of No Nations, simultaneously in theatre and online. While that particular film bombed at the box office, pulling in a mere $50,000 on its opening weekend, Netflix spokespeople said more than three million watched the film online in two weeks (it also said the theatrical release was designed to get the film into consideration for an Oscar.)

Some of the movie distributors, such as Fox have also been pioneering online. Fox was an early adopter with 2014’s Expelled, which put prominent YouTuber Cameron Dallas (4.4 million subscribers; 174 million views) in the lead role. The film was released theatrically on Dec. 12, 2014, before its digital release a few days later. In the span of a week, it shot up the iTunes charts.

In fact, entire companies have popped up, built on new strategies around distribution. For example, Vessel, which opened its virtual doors in January last year, is a subscription service built around the premise that superfans of YouTubers, celebrities and TV shows will pay a subscription fee for early, exclusive access to content from their favourite creators.

While it began with exclusive content locked behind a paywall for only 72 hours, over the past 12 months, the startup has tweaked its approach, and has been lengthening its exclusivity window, says Jean-Paul Colaco, SVP at Vessel.

Today, more than half of its content is exclusive to Vessel for at least seven days before it can be rolled out on other channels, he says. This is simply more enticing to super fans. As a result, it has seen its numbers climb. Going forward, he says Vessel will experiment with even longer windows, as well as original content that can only be viewed on the channel.

Digital platforms still have a number of challenges. Shomi’s Shulman says distribution windows are still often dictated by the content creators or original broadcaster, so when SVODs don’t create their own originals, it can mean the release dates are dictated to them.

For new releases, Shomi can either can take a first-run broadcast (content, such as Amazon’s Transparent, which is only available in Canada on the SVOD) or day-and-date linear releases (content such as CW’s iZombie). But both still required Shomi to wait for the original broadcast (be it online in another country, or on linear channels), says Shulman. Its third distribution option is the more traditional post-season broadcast schedule, which releases content about a month before the next season’s run on linear. (It also has an extensive back catalogue of syndicated series that can be rolled out at any time.)

That’s not say Shomi is beholden to the release dates dictated by the creators or original broadcasters: there’s plenty of room for negotiation, Shulman says, and thanks to the increased prominence of SVOD and OTT services around the world, SVODs have more weight than ever.

Each strategy has its benefit: Day-and-date distribution does really well for Shomi, as that content tends to fare best in terms of views. “I think that customers really like the immediacy of being able to follow the content on a weekly cadence,” she says. First-run content, on the other hand, provides her with the most flexibility in terms of playing around with distribution days.

With a plan to roll out a minimum of two pieces of content (either movies or TV shows) a week, that’s where older TV series in syndication and the first-run broadcasts come in handy – giving Shulman the ability to play around with the roll-out schedule and balancing the reality that some content has a more prescriptive window. “You might have restrictions on 10% of your content, but that’s still only 10% of 18,000-plus assets of content,” she says.

When it comes to film, Shulman says Shomi isn’t likely to explore day-and-date releases because the marketing and publicity built around theatrical releases is too great to pass up. But, the SVOD’s certainly keeping an eye on what the other players are doing.

“There was a time when a service like Shomi would only buy in the last window, which was the library window,” she says. “But now, we have the Divergent franchise, and that’s in the pay-one window. Although the traditional approach to windows still exists, they’re really melding into each other, becoming something new altogether.”

For more reading, check out The Canada Media Fund’s “Keytrends 4.0 Entering the age of experience” report, “Content Everywhere” study or its in-depth report Rights and Distribution.” It’s also got some interesting insight into the “Digital Only Media Consumers” and “How to Make Money with Video on Demand.” Finally, if you want a Canadian-specific look at distribution, check out its report on “The State of the Canadian Right’s Market.”

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