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Warner Brothers used Vancouver startup Reelhouse to try distributing its marquee films straight to viewers, including the blockbuster Gravity. (Courtesy of Warner Bros. Picture/Warner Bros. Picture)
Warner Brothers used Vancouver startup Reelhouse to try distributing its marquee films straight to viewers, including the blockbuster Gravity. (Courtesy of Warner Bros. Picture/Warner Bros. Picture)

Disruptors

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Do filmmakers need another option for distributing their works online? William Mainguy, CEO of Vancouver-based video startup Reelhouse, says yes, and he’s attracted the attention of one of the world’s biggest studios.

There’s no shortage of places to host a video on the Internet. YouTube remains the globe-straddling gorilla it’s been since its launch eight years ago. In its shadow, a collection of video-hosting sites has emerged, including recognized names such DailyMotion and Vimeo – which has been pursuing independent filmmakers – and giants like Amazon, iTunes and Netflix distributing films on the studio side.

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Reelhouse is venturing into this crowded marketplace, offering filmmakers more than just a way to play movies for the online crowd. Its concept is to offer a constellation of features that cater to the challenges and opportunities of movie distribution, and to make it easier for filmmakers to make money.

Viewing a movie online, Mr. Mainguy says, “should be different than just clicking on a movie poster and viewing a particular file by itself.”

For example, filmmakers can put a paywall in front of their movies to charge admission to view them, and Reelhouse is also built to bundle merchandise with the purchase. A movie could be sold alongside its soundtrack, for instance, or a ticket to watch a Batman film online could come with a free T-shirt. The service is designed with the influx of Kickstarter-funded movies in mind – it supports pre-ordering, which can help build momentum for an independent film, and it can accept coupons issued to crowdfunders who helped pay for the venture.

The service also focuses on rights-management issues that are dear to studios: Films can be geo-blocked, so they can only be seen by viewers in certain parts of the world, and encrypted to Hollywood standards to hamper piracy.

These days, Mr. Mainguy is spending more time in Los Angeles. Reelhouse started out focusing on independent filmmakers, but its platform caught the attention of major players. The company is open to allowing studios to use Reelhouse as a “white-label” platform – to put their own branding on the service and treat it as their own. In 2013, the company was accepted into Warner Brothers’ inaugural Media Camp accelerator, and from there, the studio used Reelhouse to try distributing its marquee films straight to viewers, including the blockbuster Gravity.

This meant circumventing more established digital resellers such as iTunes, Netflix and Amazon, but going direct to consumers had its appeal for Warner Brothers. “When you rent a movie with iTunes, you don’t have that relationship with the studio, and there’s no way for the studio to know who you are,” Mr. Mainguy says.

Apple sits on both the customers’ demographic information, and all the data about their tastes in entertainment that goes with it. More prosaically, the party who does the selling also sits on customers’ contact information and credit card numbers, both of which can be used to encourage future purchases. By going direct to the consumer, studios become the custodians of all of this. “They got to own the relationship with the viewer,” Mr. Mainguy says. “It’s something that’s really meaningful to them.”

Reelhouse also offers studios a way to link their promotional efforts through a film’s life cycle, as it moves from movie theatres to the home-rental market. Typically, after the theatrical distribution and marketing campaign ends, a whole separate campaign by a separate team is mounted to promote the DVDs, often losing some of the energy around a film in the process. But an online campaign could seamlessly bundle theatre tickets with ownership later, or with merchandise, such as the soundtrack, into a single seamless marketing push.

For all that, Hollywood can’t up and abandon its old distribution model just yet. Mr. Mainguy says Reelhouse spent much of its tenure with Warner Brothers learning about the studio’s relationship with its Byzantine distribution model, through which a movie finds its way into thousands of individual movie theatres, motel rooms, cable channels, and airline in-flight screens.

Even today, the market for physical media such as DVDs is vastly larger than the online distribution market, so studios can’t throw their existing methods to the wind. Even as Reelhouse forges ahead, change remains an incremental process.

“It’s harder than you may think to disrupt and untangle it,” Mr. Mainguy says.

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