Your Thoughts On Exclusive Deals Between Studios And VOD Providers?

It seems that as of late, more and more of the larger gay studios are choosing to go exclusive with their content with VOD and PPV providers and im wondering why this is?

I can see why a VOD provider would want a studio to go exclusive but is it really in the best interests of the studio? I mean sure, studios might get offered higher percentage ratios for going exclusive but as Tim from NakedSword said a year or two back, exclusive deals actually 'lock' a studio in to one particular PPV provider which cuts their content off from hundreds of thousands of other potential customers on the other on demand sites.

I just wonder if the studios realize this or do you think the amount of raised commissions the studios get from the VOD companies for going exclusive outweighs the benefits that a few hundred thousands customers from other PPV/VOD sites would bring in if the studios werent exclusive?

Your thoughts? Is going 'exclusive' on the VOD business model a good business move for content producers or are content producers more interested in getting a quick raised payout rather than a sustained long term investment for their content?

Regards,

Lee

good question.. look forward to seeing what people think as well as i have been wondering about which way to go with some of my stuff..

I would hope that exclusivity agreements at this point aren't long-term (i.e. under a year) and that studios have a guaranteed minimum beyond just an increased revshare.

That's my vague understanding of some agreements, anyway. Guaranteed revenue can be attractive, especially to those that are just getting their feet wet.

And in a few rare cases, the content you produce might limit your options by default (like bareback producers).

Sorry, Lee, love ya, but I'm not going to give away our long term business strategy!

What's going on in the VOD market is no different then what happened back in the days of VHS/DVD exclusive distribution deals. Most content producers are really only good at making content, they are not necessarily the best at selling it. For a lot of producers partnering with someone that will take over the sales and distribution aspects makes a lot of sense.

But, if you make an exclusive deal with the wrong partner you're fucked! You still end up having to fight for attention and promotion with the other exclusive brands within the same distribution chain. Distributors focus their attention on what makes them money. If your content is making them money then you get their attention. The moment you put out a bad title and your sales drop, they are onto someone elses product that is selling.

The one bit of advise I would give anyone considering an exclusive distribution deal is....do not give an exclusive unless you get guaranteed payouts. If the distributor has a minimum monthly payment to make then they are guaranteed to push your product. If they are not willing to guarantee minimum monthly payments, then they do not deserve an exclusive on your content.

I am just not a fan of going exclusive with anyone in so far as VOD, and now DTO, are concerned.

We have a number of arrangments with VOD companies and we have never, ever considered an Agreement which contained an exclusivity clause. Seems to be working, we have the # 1 most viewed film on AEBN and HotMovies for last week.

We also insist that any Agreement contain a cancellation clause, usually not to exceed 60 days so that we can cancel at any time if we believe the VOD companyis not properly pushing out products. Fortunately, we have never had to exercise the option.

Regarding distribution, Keith is correct, most producers are good at producing, but lousy at distribution. That wasn't necessarily our situaiton and for the first 6 years we distributed our own products and did so, I think extremely successfully, to the point that we have great name recognition. But then, my background was marketing. It has only been recently that HDK decided to go exclusively with a distribution company. That decision was made so that we could concentrate more on producition and gear up to produce more, and, because, when you do your own distribution you have to first be the salesman and then, in some cases....hopefully, not many, become the bill collector and the bank for those who aren't paying.

Any producer considering going exclusive with a distribution company should always make sure that guaranteed numbers for new releases are involved and minimums for re-orders and ALWAYS have a cancellation clause in the Agreement which allows for a speedy exit if you believe your product isn't being marketed properly.

Bill

We are exclusive with PPVNetworks for VOD with a custom theatre and have been EXTREMELY happy with our revenues and their attention to us as a small studio.

For us, as the small fry, exclusive was/is a way to get the customer service that the big guys automatically get.

PPVNetworks is a great site and the customer service provided by Damian and Ted is outstanding. Simply put, they are great guys to work with. We have our films there and are very satisfied with their efforts.

Bill