Distribution of films on the Internet
Online Distribution of Films in Germany

Video-on-Demand | Photo (detail): © lassedesignen - Fotolia.com

The distribution of films on the Internet in Germany is gaining more and more relevance. While turnover is on the up and up, it still, however, remains to be seen how all property holders are to profit from it. These new opportunities are above all of benefit to independent filmmakers.

In Germany film fans are making more and more use of online products and services to watch films. Fee-based downloads and streaming services are more and more replacing a trip to the video rental shop. This trend, which has been around for quite some time now, is developing into an important economic factor. “Online videotheques,“ says Michael Schidlack, and expert in digital media at Bitkom, “have finally arrived in German living rooms.” In 2012 around four million Germans either borrowed or bought the films they wanted to watch in digital form, as was shown in a survey conducted by the BVV/Bundesverband Audiovisuelle Medien (the Federal Association for Audiovisual Media). In 2013 one in every three euros made in the video/DVD rental business was spent on Video on Demand services (VoD). For the year 2014 Bitkom foresees an increase in the turnover for online films of 20 percent – bringing the overall figure to 134 million euros.

The range of online products and services is growing

Providers like Maxdome offer fee-based downloads on demand. Providers like Maxdome offer fee-based downloads on demand. | © Maxdome (Screenshot) The reasons for this are, on the one hand, of a technical nature. Due to the vast improvement of the broadband network, especially in the big cities, films can now be downloaded much faster and the quality is excellent. The number of Internet-enabled televisions, what they call Smart TVs, is also constantly on the increase.

On the other hand the number of providers is also growing. Alongside the iTunes-Store operated by Apple or Amazon’s portal, Prime Instant Video, there is a whole range of other providers like Maxdome that offer fee-based downloads on demand or subscriptions. Up to a few years ago the range of products focused on mainstream entertainment and blockbusters, but now it is becoming more and more differentiated. What is often not available are old films, because questions ranging from exploitation rights up to film music have never been cleared up. At the time the films were made there was simply no such thing as online use. A further problem is also the territorial restriction of licence rights.

A German national videotheque on the Internet

People looking for German films will find what they want on Alleskino, a portal that was launched last year. It was set up by producers, Hans W. Geißendörfer and Joachim von Vietinghoff, with the ambitious aim of filling their online catalogue with all the feature and documentary films that were produced for the cinema in Germany. It includes films from the pre-war period that are mostly from the archives of the Murnau Foundation, as well as productions made in the GDR, the former East Germany, by DEFA. They envisage a product range of up to 12,000 films, from the very early Nosferatu to the more recent Fack ju Göhte – a German national videotheque on the Internet, so to speak. At the moment there are 600 films that can be downloaded for a fee, “Every week between five and ten new films are added,” says Von Vietinghoff.

Marketing on all channels

Questionable is the idea of the flatscreen TV taking over from the silver screen as the venue for premieres in the foreseeable future. “I still see online sales as part of the secondary exploitation chain,” says Jens Steinbrenner, spokesman for the Deutsche Produzentenallianz (German Producers’ Alliance). Even if he does in fact point to a few individual cases in which the further success of a film was fuelled only by recommendations on the Internet. An example of this would be the French film Home by Luc Besson and Yann Arthus-Bertrand, which had 10 million hits on Youtube. Only after that was it able to be exploited profitably on TV and in DVD form. Youtube is altogether a relevant platform for producers of what they call original content.

Success, too, for niche products

Realyz.tv, an independent initiative in Berlin, distributes the works of independent filmmakers. Realyz.tv, an independent initiative in Berlin, distributes the works of independent filmmakers. | © Realyz.tv (Screenshot) In Germany there are also a number of niche platforms that distribute the works of independent filmmakers. Since 2009 Realyz.tv, an independent initiative in Berlin, has put together a collection that at the moment comprises 2,300 art house, avant-garde and festival films, many of which will be premiered online. Another interesting platform that has been in operation since 2007 is Onlinefilm.org – a collective plc with 120 film professionals who upload their films themselves and determine the price. It started off with only 30 films, but now it is networked with various European countries like Greece, Ireland and Latvia and now has about 3,000 films on offer. The profits are shared, with 51 per cent remaining with the property holders. Onlinefilm founder, C. Cay Wesnigk, cites the documentary film, Die Mondverschwörung by Thomas Frickel, as a good example – its total sales reached 25,000 euros. Wesnigk, however, also went on to say, “The hope of a market developing that would refinance the products has, however, been in vain.” The competition from internet piracy is too great.

Who is making the money on the Internet?

Just how the property owners of films being distributed online are to profit financially is also a bone of contention for the German Producers’ Alliance and the BVR/Bundesverband der Film- und Fernsehregisseure (Federal Association of Film and Television Directors). In Germany it is common practice for producers to transfer the rights to use the product to the television station that is co-financing the project. In contrast, in the USA, for example, they issue the licences for the utilisation of the works themselves. The fact that directors and screenwriters do not have a share in the digital exploitation of the works was very much lamented by the BVR in their response to the 2011 “European Commission’s Green Paper on the Distribution of Audiovisual Works in the EU.”

At the moment wherever the broadband network is being improved and extended, the demand for VoD is skyrocketing. In 2012 in Poland it was by 40 percent, in Norway over 70 per cent. (source: International Video Federation). The future, one might then think, is with the Internet - most definitely this applies to the realm of home entertainment, but not to the film industry.