The Video-on-Demand market in Australia is growing steadily but apart from the US majors and the larger independents, almost no one is making serious money from that sector.

The returns for most Australian and other small-to-medium independent films are very modest, according to an IF survey of producers and distributors, none of whom wanted to be quoted.

For Australian films that are released on 6-20 screens, VoD revenues typically range from as little as $1,000 to $10,000.

Wider theatrical releases can generate anywhere between $100,000 and $250,000 on VoD and $25,000- $75,000 on electronic sell-through (EST).

Direct-to-video titles can be expected to earn $50,000-$100,000 on VoD and $10,000-$20,000 on EST.

Those are sobering stats for producers who are looking to forego theatrical release and recoup from home entertainment, particularly as DVD and Blu-ray sales and rentals continue to decline faster than the growth of the online market.

However anecdotal evidence from The Mule’s co-director/co-producer Angus Sampson suggests the tactic of releasing the black comedy on download-to-own platforms last month, followed by online rental, DVD and Blu-ray on December 3, may be a new path for Australian films.

Consumer revenues from online film and TV transactions, excluding the nascent Subscription VoD sector, are projected to increase by about 15% to $165 million, excluding GST, this year.

In 2013  the digital business grew by 22.4% $143.6 million, according to the Australian Home Entertainment Distributors Association (AHEDA), which tracks about 90% of the market. EST accounted for $71.2 million while VoD posted $72.5 million.

For the year through August, the film and TV digital market expanded by 14% to $104.2 million. For movies, VoD generated $53 million (up 13.4%) and EST contributed $22.1 million (up 27%).

TV content rang up $28.6 million on EST, a modest gain of 4.6%, chiefly because Game of Thrones wasn’t available on iTunes until the end of the season rather than the day after each episode screened on Foxtel. The negligible TV VoD category contributed $462,000.

It’s estimated that iTunes controls as much as 85% of the EST market and perhaps around 60% of the VoD market.

Films that achieve a B.O. of $5 million-plus can reap $300,000- $500,000 from VoD and $100,000 from EST. Online revenues represent 10%-15% of total home entertainment sales.

AHEDA CEO Simon Bush tells IF he expects the digital market to expand by 15%-16% this year. “The growth curve starts to flatten when markets mature,” he said.

Bush wonders how the emerging SVoD services Stan and Netflix will impact VoD revenues next year. AHEDA has not gathered data on SVoD, where Foxtel’s Presto and Quickflix are the only significant players, but hopes to start doing so after more services enter the market.

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  1. The writing was on the wall 12 months back for OZ movie titles, mine included.(WILLIAM KELLYS WAR)but to qape the film one had to theatrical release and burn 100K of ‘P & A’…Where that could have been spent more wisely on promoting the film as a Premiere P.P.V title..
    V.O.D and sVOD is the future. This article verifies it.
    Wake up Screen Australia.
    Its a total waste of time & tax payers money pushing producers to release an OZ film on 5 to 20 screens in this country.
    A movie is a movie….it can play as a Movie Of The week, A PREMIERE movie on DVD….or PPV….Lets get with the times.
    Phil Avalon

  2. This is hardly surprising. The general quality of Australian films, and the devotion to marketing and even simple honest film reviewing in our nation is below second rate.

    When we begin to take film seriously, and strive to protect the national industry, and generally leave the individual components of good film making to the best individuals and companies, and therefore those suited to the job, the sooner we will have what we all deserve; a film industry that people actually want to be a part of.

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