Thursday, April 9, 2009, 6:53 AM ET|Posted by Will Richmond
Babelgum, the ad-supported broadband/mobile video aggregator and platform has recently embarked on an expansion into the U.S. market. A discussion I had with Karol Martesko-Fenster, the producer of Babelgum's film channel about the company's recent deal for exclusive worldwide Internet and mobile distribution rights for the new documentary film "The Linguists" reveals how Babelgum is seeking to succeed in an already crowded market, and also provides an outline for how independent content creators can tap the broadband medium.
Karol explained that Babelgum is focusing on premium-only content that fits within its half dozen curated channels. Babelgum's focus is the "Internet Free on Demand" (IFOD) window and it always seeks worldwide distribution rights, since it targets a global audience. A window of exclusive distribution is also important. To find new films, Babelgum has an acquisitions team that scouts film festivals and also works closely with digital rights aggregators such as Cinetic Rights Management, Content Republic, CAA and others. In addition it often deals directly with the content creators.
That was the case with The Linguists, a new documentary film from Ironbound Films which Babelgum spotted at the 2008 Sundance Film Festival. Karol noted that the producers had been careful about retaining all of their rights. Babelgum secured a 4 month IFOD exclusive window for The Liguistics in exchange for an advance payment and a 50-50 split of ad/sponsorship revenue. Karol wouldn't specify the size of the advance, but said it's typically in the 4 to 6 figure range and is fully recouped before the splits kick in.
Karol believes Babelgum's willingness to pay advances is a key differentiator relative to competitors who he said are mainly focused on pure revenue-sharing deals. His experience is that for most creators who are even somewhat established, revenue-sharing alone won't be appealing.
Of course to make this model work on ad/sponsorship revenue alone requires Babelgum to be pretty careful about which films it acquires. Karol explained the variables that go into calculating the advance. Among other things, how exposed the film is, the length of exclusivity period and the ad sales team's projections. Then there's the traffic expectations. Babelgum pursues an aggressive online campaign including distributing excerpts to social media sites like Facebook and also distributing the film via an affiliate player to film festival sites and on mobile platforms (iPhone only today).
Karol acknowledges that there's some risk involved here, and that it's still very early days in figuring out the formula for how ad-supported only films will work online. However, Babelgum believes the IFOD window augments other distribution (theatrical, DVD, paid online, TV, etc.) and that the industry has recently begun to understand this. Babelgum's progress will be well worth following.
It's no secret that there's a huge amount of interest among independent content creators to exploit the emerging broadband medium. Karol's advice for independents is to get talks started with online distributors simultaneous with hitting the film festivals, clear all the worldwide rights, and be willing to carve up distribution rights into many different slices (with or without the help of digital rights aggregators).
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