Jonathan Sehring, the president of IFC Entertainment, was sold on VOD's prospects after the 2006 IFC production "Kill the Poor" failed to attract a theatrical buyer.
"We felt that the VOD platform would be able to get the movie into as wide as possible a release with as little [film print and advertising spending] as possible," Sehring said. "The new generation of filmmakers realize that the business has changed, and they realize that if their movie is going to be seen by the widest possible audience, it doesn't matter to them if it's seen on an iPod or at the Ziegfeld."
But even some of IFC's better-known VOD releases are hardly making a killing in the emerging format. The critically acclaimed Italian mob drama "Gomorrah," which IFC bought after the film premiered at Cannes last year, has grossed about $1.5 million in domestic theaters. Its VOD numbers are small in comparison, about 85,000 purchases, for net revenue to IFC of about $250,000.
When producers sell their movies to a VOD packagers like Magnolia Pictures, Sloss' Cinetic Film Buff, IFC's In Theaters or Festival Direct, it's unlikely they will get a meaningful paycheck in return -- perhaps as little as $10,000. Although the VOD distributors say they are sharing revenue with their filmmakers, they must first recoup their marketing and distribution costs, and then deduct any advance payments they've already made to the filmmakers.
Joshua Safdie, the writer-director of last year's Cannes movie "The Pleasure of Being Robbed," said he hasn't been impressed with how his film has been released by IFC, which gave the comedy a tiny theatrical release before putting it up on its VOD channel. He said he hasn't received any additional VOD revenue.
"It's doing great things for certain people, but I'm not feeling it," said Safdie, whose new movie, "Go Get Some Rosemary," will premiere at this year's Cannes festival and is looking for an American distributor.
Safdie said that unlike movies in video stores, where you can pick up the DVD box and get a feel for what the film is about, VOD shopping feels impersonal, removed.
But Matt Dentler, the former head South by Southwest Film Festival programmer who is now collaborating with Sloss on the new Cinetic VOD channel, said the key would be smart curators picking movies that can bowl over some segment of the audience -- even if they are long-forgotten library titles that deserve a fresh look.
"This is home video," Dentler said. "The same kind of thing that works at Blockbuster on a Saturday night is what's going to work on VOD."