Television Rights, Streaming, and VOD
Once upon a time, it was all about DVD sales. Now, it’s far more about television rights, video-on-demand (VOD), and streaming.
For some producers, selling TV and international rights is a significant source of profit because the producer doesn't have to pay for marketing and P&A costs. Films have to leave the theater at some point, but they can remain evergreen on TV. How many times have you flipped through channels and come across “The Notebook” or “The Shawshank Redemption” yet again?
As for VOD, revenue from these deals should add hundreds of millions to a studio's bottom line. For indie films, there are several VOD release strategies: day-and-date (movies released simultaneously in theaters and VOD), day-before-date (VOD before theatrical), and VOD-only. Many films that don't have the special effects and big-name stars to lure people to the theater often profit from this model.
Streaming video is a new source of revenue for Hollywood movies. VOD revenues tend to dry up after a few years, but movie studios can still make money from older films by licensing them to Netflix or Amazon Prime. However, the success of original content on the streaming services also draws audiences away from traditional movies.
The Bottom Line
As the saying goes, nobody knows anything in Hollywood. The film industry is in flux, and ticket sales alone don't drive revenue. There’s merchandising, VOD, streaming video, foreign sales, and a plethora of other distribution channels that can help filmmakers, producers, and studios turn a profit. So who knows, the little indie that you invest in could just be the next "Little Miss Sunshine." Or not. In Hollywood, there are no guarantees.
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