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

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UK FILM COUNCIL a revenue share type Tiscali would like to use for all movie content. According to the company. Tiscali’s recent industry activity is creating trust between Tiscali and independent UK filmmakers. The ISP however views premium content as a key driver of future services. Indeed, it has been reluctant to promote its VoD partner CinemaNow due to the lack of premium content available in the UK, and the ISP believes it is important to create a critical mass for specialised VoD content in order to generate significant revenues. Tiscali is working internationally with Warner and Sony on a rental movie VoD model --- possibly coming to market in 2006. However, conversations with the latter studio and also with Tiscali itself suggest that there is a lot of groundwork still to be done, primarily because of some reluctance from certain studios (though not all) to have their content being used as a secondary ‘value-added’ product to drive another primary service (i.e. broadband). Also, Tiscali has a number of technical issues. In a hypothetical partnership with the UK Film Council, the ISP would expect an up-front cost for building out a system in the UK (as all content is currently encoded and stored in-house in Calgiari, Italy). Although server space isn’t a concern, Tiscali would prefer to store the more popular titles as the bandwidth would subsequently pay for itself. It would also require payments over and above any revenue share for encoding, DRM wrapping and bandwidth costs. The ISP would also require promotional and marketing support for the service. To provide an idea of cost in addition to the revenue share agreement, Tiscali would charge an estimated £1,000 per film to encode, upload and arrange the DRM. Tiscali would then seek 50p per download in order to cover bandwidth costs (on the assumption that a film costs £1.99 and is basically the same size file as EMR). If Tiscali were uploading films in large volumes then it might be able to find a way to give a volume discount on these costs. If there was a sell-through model, then if a film cost £9.99, the ISP would expect around £2 from the transaction. All in all, the Tiscali proposal could prove rather an expensive prospect. In Tiscali’s favour though, the ISP has been keen to put across its enthusiasm for an independent and specialised film download service, being prepared to set-up a dedicated website on its portal under the UK Film Council brand (albeit, again, for a fee). Feasibility Study for a Digital Platform for the delivery of Independent UK films and Specialised films to the Home UK Film Council © 2006 74
UK FILM COUNCIL 5. Platform Choice Assessment The diagram below represents a generic description of how a digital platform for distribution of films might operate. Below we discuss what is involved in each element. Feasibility Study for a Digital Platform for the delivery of Independent UK films and Specialised films to the Home UK Film Council © 2006 75
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