Business Models: Twilight Time vs. Other Boutique Labels

[Jeff]

Even funnier will be when Sony watches this one-day sellout and decides to release it in the UK, and it goes on sale for £10 or less, possibly with extra content.

That will almost certainly happen, and I'm sure there will be a U.S. Sony release will when Twilight Time's window is up too.

It should be noted though that this disc, like many recent Twilight Time releases includes all the bonus content from the studio DVD release (commentary track with John Carpenter and Keith Gordon, three featurettes, deleted scenes, theatrical trailer).

[Gregory]

Even funnier will be when Sony watches this one-day sellout and decides to release it in the UK, and it goes on sale for £10 or less, possibly with extra content.

That will almost certainly happen, and I'm sure there will be a U.S. Sony release will when Twilight Time's window is up too.

I've read that the licenses don't expire for three years. So if the whole run sells out quickly, there's a three-year lapse, during which time no one but ebay gougers and file-sharers can make the film available in 1080p. It seems like this contract was drawn up by people with very little business savvy.

[Props55]

I'll be brief here as I really don't have much more than passing interest in about 90% of the TT catalogue thus far. But aside from the contentious and defensive attitude on the part of TT (and the somewhat unprofessional use of FB as if it were an individual personal account rather than the public face of a business enterprise) I'll make two observations:

1. The idea that the rapid sellout of CHRISTINE was somehow unexpected defies belief. The fact that all four of the previous releases to sell out were horror/sci-fi/fantasy titles cannot possibly have been lost on the decision makers at TT. It's almost a dead certainty that CHRISTINE was chosen for release specifically because of its genre alone.

2. The distinction made between TT and SAE is disingenuous at best. They are joined at the hip. The former is the production platform for the latter distribution arm. Nick Redman has been producing content (original film music CDs) for Craig Spaulding's Screen Archives Entertainment for most of the last quarter century. The idea that TT is somehow at the mercy of some marketing "suits" at SAE is laughable.

[peerpee]

If they're selling out this quick and folk simply are unable to buy them on release day, then they need to up the amount they press from 3,000. I don't see how the current set-up benefits film fans who want to buy one copy and keep it.

Furthermore, it all seems very cynical of TT when Olive operate the exact same set-up (licensing great studio titles for Blu release) without TT's self-enforced limited edition / high price mess.

[TMDaines]

I don't understand why people are mad at the scalpers really. TT are doing the exact same thing themselves by selling a limited amount of their product at an inflated price. It's inevitable that third parties will then try and make some money out of this in a collector's market - and why shouldn't they? If I was US based then I'd do the same. As I've said repeatedly, this model (paying royalities up front for a limited print run before vending them solely through a single independent retailer) sucks for the consumer who just wants a decent Blu-ray of a film at a price that reflects its quality and content. It's great for those looking to make a couple of easy bucks by playing the field. It's great for the major studios who make profit with zero risk. And provided TT have no cash flow issues and have well planned their business model out, their is little risk on their part long term.

[Graham]

So maybe it's time to pose the question: why did Christine sell out so quickly when The Fury didn't and is still available? Both are horror films, by respected directors, and each falls short of each filmmaker's best work by some margin. Clearly the cult for Christine is larger than for The Fury, but both are horror movies so should, on paper, appeal to the same collector-oriented fan base. Or am I missing something?

[doc mccoy]

So maybe it's time to pose the question: why did Christine sell out so quickly when The Fury didn't and is still available? Both are horror films, by respected directors, and each falls short of each filmmaker's best work by some margin. Clearly the cult for Christine is larger than for The Fury, but both are horror movies so should, on paper, appeal to the same collector-oriented fan base. Or am I missing something?

Because it's possible that some people are aware that France's Carlotta is also releasing the Fury on BD this year.

[Jeff]

TT's self-enforced limited edition

According to the two guys that run Twilight Time, they're just hobbyists and it's easier and cheaper for them to only license the rights to produce 3,000 copies. They pay the entirety of the licensing fees and the royalties for all 3,000 copies to the studios up front. There is no sales data or ongoing payments to keep track of, and the studios love it because they aren't taking any risks. They get all of their money for 3,000 sales right away, regardless of how well the title ends up selling. This risk-free, cash-forward strategy theoretically makes studios more willing to part with just about any title they have a high-def master for but don't think they'll get around to in the next three years themselves.

[peerpee]

So what's stopping them doing 5,000 or 10,000 for certain titles if there's clear demand?

[mfunk9786]

Perhaps the studios will become concerned that TT is becoming a more threatening entity to do business with and start upping their asking prices?

[EddieLarkin]

They've mentioned before that the 3,000 number isn't pulled out of thin air, but rather a quantity low enough to be termed the "magazine rate" in the limited edition industry. Apparently this means licensing costs are lower than usual because royalty payments to cast and crew are not required, were as they would be if the number was greater. Or something.

I think what's clear is that these guys have no interest in these 80s horror films, and would rather not be putting them out (I recall them admitting during the NOLTD debacle that they had never actually seen the film). This venture probably is a labour of love for them, but only in regards to the majority of their titles: old and forgotten Fox and Columbia studio titles. The 3,000 rate is more than enough for stuff like Pony Soldier and Swamp Water, and their decision to release titles like Christine extends only to the fact the title will bring in guaranteed revenue that they can funnel back into their "real" titles.

It's still completely shoddy business, but if it's the only way to get stuff like Rapture and Picnic on BD then so be it, I guess.

[Thomas Dukenfield]

So maybe it's time to pose the question: why did Christine sell out so quickly when The Fury didn't and is still available? Both are horror films, by respected directors, and each falls short of each filmmaker's best work by some margin. Clearly the cult for Christine is larger than for The Fury, but both are horror movies so should, on paper, appeal to the same collector-oriented fan base. Or am I missing something?

This has already been talked about, but I'd say the rabid portion of the Carpenter fanbase is bigger, and there is also the rabid Stephen King fanbase and the general horror fanbase, where as The Fury tends to be viewed as more of a conspiracy thriller than a straight horror film. Christine is already regularly selling for $80-100 on eBay, so the scalpers judged correctly that this would be a popular title.

[vsski]

They've mentioned before that the 3,000 number isn't pulled out of thin air, but rather a quantity low enough to be termed the "magazine rate" in the limited edition industry. Apparently this means licensing costs are lower than usual because royalty payments to cast and crew are not required, were as they would be if the number was greater. Or something.

I agree that the 3000 number isn't pulled out of thin air, but rather based on some very detailed calculations. I'd be very surprised, however, if actors and crew don't receive any royalties at all, but then again I don't know the licensing contracts. But having worked for a music licensing company I can tell you that a lot of money was spend on developing ever more sophisticated tracking systems to not miss a single instance of IP being used.

The main advantage of their business model is that they precisely know their cost going into a project. Everything from licensing to production to distribution can precisely be calculated, which imo is also the key reason why they use SAE as their only distributor - they know exactly what it will cost them, where if they deal selling through multiple sources unless they precisely restrict the numbers sold through each channel is not possible with the same exactness.
They also stated in the past the number of units they have to sell to break even (I forgot the exact number but think it was around 1500 or 2000) and of course they have insights into which type of titles move approximately how many units.

Do they include titles like Christine or NOFLD to even out their cash flow even though they personally may not be big fans of it? Very likely, but then again do we really believe Criterion published titles like Armageddon and Benjamin Button purely for their artistic merit or because they are corner stones of film history?

While I dislike what is happening with resellers buying up their titles purely for profit gains, last I checked it wasn't illegal. And imo the best way to stop this is by not buying their titles, but given how few catalogue titles still get published I'm not sure if you are a fan that you really take the risk of hoping someone else will publish them in another territory or after 3 years.

However, I do agree that for titles like Christine where it's clear that they will sell quickly imposing a 2 title sales limit from the get go would clearly show that they value their fans and after the current debacle and the imo foolish reaction on FB they do have some mending to do.

[Gregory]

The notion of a collectors' market for blu-rays is so alien to me that I looked at some recent ebay activity from the well-heeled collectors. A reasonable number of sealed recently-produced limited editions sell for over $200 on up to $975 for a Japanese Thor steelbook. In some other collectors' markets there's some element of deliberate manufactured scarcity and I'm surprised that doesn't happen more than it already does with cult films on blu-ray (beyond the usual limited steelbook editions).

[zedz]

I'm not trying to demonize anyone, but it seems to me that even swo's decision to purchase is motivated largely by profit.

Despite how my post might have read, my purchase was not at all motivated by profit. More like fear of being gouged in the future should I eventually decide this is something I want to own. I love The Thing, so I'm willing to give this a chance, and the $35 price tag becomes easier to swallow knowing that I shouldn't have much of a problem getting that back if I decide it's not worth owning after seeing it. While it would be nice to make a profit in reselling it, I'll be perfectly happy just breaking even on the deal. And if I decide I want to keep it, I was never going to get it for anything less than what I paid, so I feel like a responsible shopper in that sense.

NB: I bought only one copy.

Don't try to convince us that you're not Evil Personified, swo.

(Burn the Witch! Burn the Witch!)

[Jeff]

I saw Goodman swo dancing with the devil!

[captveg]

So maybe it's time to pose the question: why did Christine sell out so quickly when The Fury didn't and is still available? Both are horror films, by respected directors, and each falls short of each filmmaker's best work by some margin. Clearly the cult for Christine is larger than for The Fury, but both are horror movies so should, on paper, appeal to the same collector-oriented fan base. Or am I missing something?

This has already been talked about, but I'd say the rabid portion of the Carpenter fanbase is bigger, and there is also the rabid Stephen King fanbase and the general horror fanbase, where as The Fury tends to be viewed as more of a conspiracy thriller than a straight horror film. Christine is already regularly selling for $80-100 on eBay, so the scalpers judged correctly that this would be a popular title.

Also, having watched both for the first time a couple weeks ago to determine if I wanted to order either of them on BD, Christine is simply the better movie.

[Feego]

Actually, there is a fair number of people (not all, certainly) who would rank The Fury as one of De Palma's best films. I don't know that many would rank Christine among Carpenter's best. Like others have suggested, I think it is the combination of Carpenter and King's names that generated more interest in that specific title. De Palma is generally considered a director of thrillers rather than horror films, so his name doesn't conjur the same sensation among horror fans as the director of Halloween, The Fog, and The Thing does. Which is all perfectly fine for me since The Fury is the title I was after.

[peerpee]

They need to stop allowing sales of upto 10 copies per person. Even if they stop doing that with 500 to go, it's still a possibility that upto 250 people are getting the first 2,500 copies. Thus denying a possible 2,250 people and directly being responsible for the unfair and ugly scalpers' market.

That's one thing we all have a "divine right" (TT's words) to be angry about, and that's what stinks here.

[mfunk9786]

I think they want to leave that market open for titles that are having trouble selling through their runs, hoping that scalpers are willing to take a chance and sit on as many copies as possible.

[swo17]

They need to stop allowing sales of upto 10 copies per person.

The limit of 10 was just for Christine (initially). They normally have no per-customer limit, and yet the majority of their catalog is still available.

[kingofthejungle]

I think they want to leave that market open for titles that are having trouble selling through their runs, hoping that scampers are willing to take a chance and sit on as many copies as possible.

I think this is exactly right. I guarantee that there are folks out there with multiple copies of Enemy Mine and The Fury because they were expecting quick sell-outs. I can't really blame TT for wanting to take advantage of that.

It might be naive, but I think the scalper problem will eventually correct itself after the speculators get burned a few times. Horror fans should consider calming down and not paying ridiculous prices for the discs, as well. I mean, there are 36 copies on eBay right now, and it hasn't even shipped yet. That isn't exactly a scarcity, and the market will probably be even more saturated once the discs are actually in hand.

It would be wise for TT to limit purchases of these quick-selling titles for a defined time period, though (something like 2 per customer for the pre-order weekend). Fast sellouts might result in some quick cash -- but if Sony gets the idea that these titles would be better suited to a less limited release, it endangers the TT business model that's worked reasonably well so far.

[triodelover]

...and yet the majority of their catalog is still available.

Which is a commentary on the quality of their catalog relative to their pricing structure, not on the existence or absence of purchase limits.

[Zot!]

If I bought all 3000 copies of their next release, and I destroyed 2999 copies, I could create the ultimate collectible and rule the world!

[mfunk9786]

I think they want to leave that market open for titles that are having trouble selling through their runs, hoping that scampers are willing to take a chance and sit on as many copies as possible.

I think this is exactly right.

Well, it's exactly right aside from the fact that I typed "scampers"