Mike Fleming

The longer the 2012 Sundance Film Festival deal-making stalemate continues, the more VOD-centric deals will take center stage as they did in Toronto. A lot of the movies that came in with visions of theatrical releases are considering overtures from bidders who intend to emulate the Margin Call model where video-on-demand is equal to or more important than theatrical.

If VOD is to become a viable business that leads films on the margins to being widely seen, some obstacles have to be worked out of the system. The biggest: convincing actors accustomed to seeing their work play on 2,000 movie screens that the VOD model doesn’t mean their careers are on the downswing and that they’ve been relegated to pay-per-view. The only real equivalent actors have had for this was when they made a stinker that went straight to video obscurity. Will those actors spark to the potential of VOD riches and embrace the idea of promoting films to cable delivery systems instead of the ego-boosting traditional selling system of commercials and print ads? This is a psychological hurdle for stars. When Margin Call sold at Sundance last year with the Lionsgate/Roadside Attraction distribution VOD deal, veteran actors like Kevin Spacey had to be convinced this wasn’t necessarily a step down from a traditional theatrical release.

Another consideration is Oscar eligibility. The Academy rule has been that a film that premiered on television prior to theatrical was ineligible for an Oscar. Several major talent agents I spoke to said they weren’t exactly clear how this works. For example, the distributors behind Margin Call and Melancholia protected their movies and talent by booking “stealth” qualifying runs in a theater, just in case. On the Oscar front, the Academy tells me that as long as a film opens in an LA County theater for seven consecutive days either before or at the same time it is released VOD, Oscar eligibility is preserved. If the film makes its commercial debut on VOD, it cannot be considered for an Oscar. So a VOD revolution will likely lead to a lot of unadvertised runs in LA theaters.

“As long as there is a clear line on how to retain Oscar eligibility, actors are going to have to get used to this, because this is the way that adult dramas are going to be seen,” said one senior agent. “The practical reality isn’t as bad as the perception. The people who watch these kinds of films usually have great sound systems and large-screen TVs, and most Oscar voters already watch eligible films on video in their homes. We’re all just going to have to get used to this. We’re already having those conversations. Isn’t a movie that’s seen by millions across the country on VOD better than a few people watching in ratty arthouse theaters, which are uncomfortable and screens that aren’t that much bigger than large TV screens? Enough actors have made projects they thought would get on the screen, only to see them get dumped. You hear about movies with stars that never came out theatrically and grossed $5 million VOD. This is a process that will evolve, but it will enable these movies to get made.”

Another talent agent said that convincing actors will get easier when more test cases like Margin Call overachieve on VOD. “It’s all about the economics and distribution modes and how a film reaches an audience,” said the rep. “These conversations happen after a movie has been shot and is trying to find a life. It will take a few wins and maybe a breakout success to make it easier, but it’s coming.” Also coming are the Sundance sales. Films like Beasts Of The Southern Wild, Arbitrage, The Surrogate, Lay The Favorite, Celeste and Jesse Forever are rumored to have offers, and buyers are turning out in force tonight for Bachelorette. The expectation coming in has been that after seeing the bulk of the big titles by tonight, that the deals will begin flowing.