DIY distribution platform VHX made a big move at SXSW this week when it opened its digital doors to the public, allowing any content creator to sell direct to fans at low cost. The start-up founded in 2011 by Jamie Wilkinson and Casey Pugh had been in private beta for two years building a library of over 300 select titles from indie filmmakers and film companies including Shane Carruth’s Upstream Color, Mike Birbiglia’s Sleepwalk With Me, and Oscar nominated docu The Act of Killing. Unlike video distribution storefronts like Amazon, Hulu, Netflix, and iTunes, VHX offers technology that allows makers to sell content direct to fans via high quality streaming or DRM-free download at price points of their choosing, on their own websites. That means flinging the gates wide open to any and all content. “The goal is to close the gap between interest and availability,” VHX co-founder Wilkinson told me in Austin. Most digital distributors are selective in their content deals but VHX is a facilitator, not a gatekeeper of content.
VHX is one of a handful of rising DIY distribution companies offering content creators an alternative to aggregators by cutting out the middleman, dramatically changing traditional distribution models, territorial rights, and release windows – not just the means of delivery. “Traditional distribution thinking is that the world is chunked up into borders and information does not cross these borders, but the internet has changed all that,” said Wilkinson. VHX allows users to geofilter content by region but recommends they offer worldwide releases for maximum exposure. More than half of VHX sales come from outside the U.S. from consumers who don’t want to wait for a film to expand to their region or hit home video. “When you’re marketing or at a premiere in the U.S., people hear about it and there’s demand all over the world. We see tons of successful pre-orders because of that – there’s demand and people are Googling the film and they want to take some kind of action. You might as well offer it for purchase.”
In some cases a VHX offering can live side by side with the competition, as it did with The Act of Killing. As part of its grassroots effort to reach a global audience, distributor Drafthouse Films made the film available simultaneously via VHX and for download through BitTorrent, which has developed its Bundle program to put film and music content distribution in the hands of creators and counteract the perception that it’s an enabler of content piracy. For now the potential rivals are playing nice, both focused on promoting their respective methods and audiences while larger brands like Vimeo expand their own self-distribution programs. Vimeo On Demand debuted in 2013 at SXSW where Some Girl(s) became the first indie feature to be self-released through the service. This year Vimeo added themed and curated browsing.
VHX’s open launch is accompanied by a price drop that makes their service even cheaper at the cost of a 10% sales cut (down from 15%) and a per-transaction fee of $0.50. But the DIY route still puts the onus on marketing and awareness on the creator. That works out well for filmmakers with established fan bases like 2012′s gaming docu Indie Game: The Movie, who went with VHX rather than wait for a traditional roll out and had their film available for sale within 9 days of contacting the company. Audience-building is key in the brave new world of DIY distribution, and VHX makes its viewer analytics and sales data transparent. “VHX is the technology for running a video store,” says Wilkinson. “We’re making that technology stack accessible to anybody so they can run their own iTunes, or run their own Netflix. Everything we know we turn over to the creators.”
Greater consumer connectivity within the network is on the horizon, as is a social network element connecting users with their viewing habits, a next-step every media platform is trying to harness. VHX and its peers are banking on audiences and creators alike adapting to the digital future, says Wilkinson: “Investing in a platform like this is a way of hedging against the decline of the traditional film sales model.”