Feasibility Study of a Digital Platform for the delivery of UK ... - BFI

UK FILM COUNCIL
Sky’s negotiating power and ability to control the market is a vital consideration. The general response from the rights holders
interviewed definitely indicates that there is a clear hierarchy in place amongst the existing platforms in the on-demand space -- with
Sky, which can offer the greatest financial incentive and the widest access to an audience in the PPV and pay-TV environment, at the top
of the tree. Other services, such as Front Row and FilmFlex, which offer PPV and VoD respectively over the NTL/Telewest cable platforms,
and VideoNetworks’ Homechoice VoD platform in London, tend to be less dominant in the role that they play.
However, some distributors are seeking alternative routes. Pathe has made five titles available for download to a broadband Internet trial
operated by a company called KeyCom --- which is offering its service to 25,000 users in student halls of residence. Metrodome,
meanwhile, has been experimenting with a hotel VoD service.
One of the emerging issues, however, is a continued discrepancy in where distributors believe on-demand rights should be situated and
defined. Although the general trend seems to be that on-demand rights fall within the TV windows, it appears that some rights holders
have tried to argue with broadcasters that they are more akin to video rights and should therefore contractually be treated as such. So
far, this line of argument has been unsuccessful and the view remains that on-demand rights are a further development of existing
television windows.
The problem of Internet Rights
The most significant obstacle to the development of VoD over the Internet in the UK for independent and specialised titles is the major
ambiguity surrounding Internet rights.
Currently, UK distributors tend to generally take all rights (with some exceptions) for any length of time between 1 year and 25 years
(depending on the title and the position of the distributor in question). However, most film licensing deals struck by domestic
independent distributors prior to 2005 have been silent or vague on who specifically holds Internet rights during this timeframe. This has
been largely because deals were struck before the Internet was seen as a viable medium for commercialising and exploiting
entertainment content. Although some of the more cavalier distributors view this as an anomaly and are prepared to take a ‘publish and
be damned’ attitude, the general sentiment seems to be that where contracts are silent, then the rights remain with the original
filmmakers and will have to be renegotiated.
Although the proportions vary considerably, we estimate that independent UK distributors at present hold approximately 25-30 per cent
of the Internet rights of their libraries. If this 30 per cent ceiling is applied to all UK independent and specialised titles released in 2003 in
the UK, this would mean that of the 243 titles released, Internet rights on only 73 titles would be held by the relevant distributors. More
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