Business Models: Twilight Time vs. Other Boutique Labels

[eerik]

<wishfulthinking> I'll definitely pick up the 30th anniversary edition of Body Double that Sony releases in Europe next year for third of TT's price. </wishfulthinking>

[Moe Dickstein]

3000 copies - if you go over this figure, then certain deals with union residuals kick in, which is why soundtracks are limitied to this figure usually as well. I don't see them going over the 3k on any titles because this would hugely increase the upfront costs.

This is my understanding as well -- it's the residuals kicking in at copy 3,001 that's the real bar. (Aside -- I find this screwing over of the talent which enriching the studio the most problematic issue with TT.)

So as I noted above, TT will need to decide whether it wants to become a real label or not. Because if there's money to be made by going over 3,000 on these titles, someone will do it if TT won't.

So better the films go unreleased?

Consider this - for some films where TT proves a market, when the exclusivity expires then they may get a larger run where those people would see residuals, and also TT releases may be one element inspiring the overseas releases where people would see residuals.

Nobody is being "cheated", those are the deals their unions made it's not slimy to honor contracts, sheesh.

[knives]

It's a nasty loophole though.

[matrixschmatrix]

It's slimy in the same way that artificially restricting the size of your workplace so that you don't have to pay healthcare for your employees is slimy- it's obviously not illegal, but it's exploiting a loophole with the explicit purpose of avoiding giving people something they've got every right to. The "Twilight Time will show that these titles can sell!" argument doesn't seem to hold up any better than the "torrenting increases visibility" one- that's all well and good, but it doesn't excuse the fact that the single largest market for whatever title is now being sold at the request of the studios in many cases in such a way that the creative team behind it doesn't get residuals.

[Moe Dickstein]

I disagree. I think it's smart to be able to get things released - the whole point is that at a smaller release volume the musicians aren't being screwed out of some big release deal - when there are bigger profits to be made then they are compensated, when nobody is making big profits at least the work gets out there.

This is why a lot of things don't get released on home media - music rights being too expensive.

And I doubt very much that Sony asked them to release As Good As It Gets to avoid paying residuals to the session musicians from the score. I think people are looking for reasons to justify being offended at not getting a discounted price or having things sell out.

[matrixschmatrix]

Well, let's be clear- the movies we're talking about aren't things like Rapture where there's no other release, and where obviously everyone behind it's delighted that people can see their work. That is absolutely a good thing and TT's model seems unproblematic there.

Where it does seem problematic are for movies like this one, the 80s horror releases, and the big Hollywood stuff, where obviously the movie itself is widely available, and TT is offering a premium blu edition to collectors. The work is obviously already out there- you can get a DVD of Christine for about $6.50 shipped on Amazon right now- and TT isn't so much getting something out there for people to see as tapping a specific and in some cases quite sizable market, one which self evidently could sustain a much larger print run. Now, maybe on the company's end, the idea is that those movies are there to support the Rapture releases- which makes sense, sure- but it's hard not to see it as a situation where they're artificially limiting the supply to drive up prices and avoid paying royalties, and that does seem pretty shitty to me. Particularly if they also pull shenanigans with the number left in the run.

I mean, I personally profited from the whole Christine thing, and I've got about half a dozen TT releases- it's not like I'm going to go burn their headquarters down. But in terms of the boutique labels we discuss on here, they seem to be the most objectionable in maybe half a dozen ways, while falling short of anything I would actually boycott their product for.

[bainbridgezu]

TT will need to decide whether it wants to become a real label or not. Because if there's money to be made by going over 3,000 on these titles, someone will do it if TT won't.

Could anyone clarify how Twilight Time's arrangements with these studios work? If their contract is to release 3,000 copies of a given film, what happens once that stock is sold-through? Do the rights revert back to the studio, or does Twilight Time retain the license (despite having no intention of producing further product/profit)?

[Moe Dickstein]

While stopping short of speaking for them, I know the guys behind this label are passionate about films and what they do. You can listen to any of Nick's commentaries to know that.

A big part of the dynamic of a small label and their relationship with the studio is having good faith on each side. Now that the relationship is stronger Sony is allowing them to have extras that they didn't before on some titles. Part of that relationship entails releasing titles that Sony, for whatever reason, asked them to, even if they are outside the scope of the label's original mission, in the interests of being a "good partner" to Sony.

And I can absolutely say that these bigger sellout type titles 100% "pay for" the smaller films - in the sense that they allow the label to keep operating. The thought of "pulling one over on residuals" is the farthest thing from these guys' minds - they just want to be able to keep getting stuff out there for people - none of them is making the sort of money from this that would even allow them to operate it as a full time job so when I hear the accusations of venality on their part it really sticks in my craw.

[Moe Dickstein]

TT will need to decide whether it wants to become a real label or not. Because if there's money to be made by going over 3,000 on these titles, someone will do it if TT won't.

Could anyone clarify how Twilight Time's arrangements with these studios work? If their contract is to release 3,000 copies of a given film, what happens once that stock is sold-through? Do the rights revert back to the studio, or does Twilight Time retain the license (despite having no intention of producing further product/profit)?

They have a 3 year exclusive on their titles in the US market - after that time the studio can release the titles themselves or re-license for another run of 3k with TT.

The way you phrase your question is disingenuous, as if TT could produce more copies on a whim but decided to be churlish and sit on the title. The model they are operating on is designed to be limited to 3k units for many reasons, union deals as well as that being a proven figure in the soundtrack market. When the items are sold as "limted" and suddenly more get made that just makes everyone feel cheated and would be bad business.

As to what happens after the exclusivity period, it's a bridge that hasn't been crossed yet, as they haven't been around 3 years yet.

[bainbridgezu]

When the items are sold as "limted" and suddenly more get made that just makes everyone feel cheated and would be bad business.

As opposed to when the items are sold as "limited" and previously-withheld copies suddenly reappear?

[vsski]

None of these calculations are abitrary for many reasons already mentioned. And I agree with Moe, this is not done to screw people out of royalties in order to pocket a nice profit and the so called inflated price point is not an arbitrary number either, this is all based on a clear business case given the financial limitations of the founders and the licensing agreements with the studios.

And I do think people here simply don't understand how few BD titles are sold for the average studio movie, let alone titles like Swamp Water or Wayward Bus (why are these titles despite a 3,000 print limitation still available even though I'd argue the vast majority of the intended audience knows exactly where to buy them - price of course, but also overall demand).

Take Mondo Vision for example, from all comments here they have produced some of the most beautiful limited editions of any label worldwide and despite having a limited edition run of 2,000 they are still available years after their release. Yes, I know they have the regular editions of course, but what that tells you is that very few people are willing to pay over a certain price point no matter how great the extras or how beautiful the A/V quality.

And do you really think CC would sell the same amount of titles if it weren't for the B&N sales and the occassional flash sales.

Based on the current cost for TT (~ $15 per title assuming the break even point is correct) in their model they have to sell the title for at least more than $15 to make any money at all, and if you have to bear the cost for the entire run upfront and publish titles like Swamp Water, there is no way to recoup your cost if you sell them for only $19 a piece unless oodles of people are buying and that is just not going to happen no matter what price you set.

Why was it that CC charged $100+ for a laserdisc, when the same title was available on a cheap VHS version. And why are studios not publishing their catalog titles on BD, surely there will always be a few thousand people to pick them up somewhere.

While I'm sure TT could have handled many things better, especially when it comes to customer service, first and foremost it was an attempt of two individuals to publish titles nobody else would have put into the market on BD any time soon. And the alternative is that we would not have many of these titles today.
So if you don't like the business model for whatever reason, don't buy their titles, but I fundamentally disagree that there is malicious intent on part of the TT team - they tried to do what they felt might work given their limitations.

According to this board they obviously have failed.

Edited for clarification!

[Brian C]

The way you phrase your question is disingenuous, as if TT could produce more copies on a whim but decided to be churlish and sit on the title. The model they are operating on is designed to be limited to 3k units for many reasons, union deals as well as that being a proven figure in the soundtrack market. When the items are sold as "limted" and suddenly more get made that just makes everyone feel cheated and would be bad business.

It's bad business anyway, just by virtue of their one-size-fits-all approach.

If a company is doing a run on a title limited to 3000 copies, then "good" business would be to pick titles that have a demand for them that is roughly equal to 3000 copies. So far, it seems that something like The Big Heat roughly fits the model - there's substantial demand for it, enough to make the title clearly worth putting out there, but it's not overwhelming. Putting aside one's thoughts on Twilight Time specifically, it makes sense for the studio to license to a company that caters to that kind of market.

But if Twilight Time can't come close to selling out a title, releasing that title is obviously bad business. It might make sense from the label's perspective as a labor of love, but you're the one talking business here. It would have made sense, from a business perspective, to either lower the price or print fewer copies. Twilight Time is just like any other company - if you have an excess of unsold stock, that's a mistake from a business standpoint.

And if these titles are selling out so fast that Twilight Time literally can't keep up with how many they're selling, that's bad business, because the company is obviously leaving a lot of money on the table. Then it would make better business sense to either print more copies or raise the price. Again, just like any other company, being unable to fulfill demand is bad business.

In my opinion, you're doing better at defending the label without bringing "business" into it. Because what they're doing is downright absurd from a business standpoint.

[pointless]

But if Twilight Time can't come close to selling out a title, releasing that title is obviously bad business. It might make sense from the label's perspective as a labor of love, but you're the one talking business here. It would have made sense, from a business perspective, to either lower the price or print fewer copies. Twilight Time is just like any other company - if you have an excess of unsold stock, that's a mistake from a business standpoint.

One might argue this is no different than Criterion releasing The Rock, Armageddon, and RoboCop to help finance less mainstream titles. Would that be bad business as well?

I'm sure I've seen reports where many Criterion titles have had extremely low sell rates.

[Brian C]

But is Criterion printing the exact same number of copies for all their titles? I doubt it.

[pointless]

But is Criterion printing the exact same number of copies for all their titles? I doubt it.

You are probably right. They most likely make an educated guess based on past experience. I'll bet they've been surprised at being way off more than once however, though I'm sure that also happens to the major distributors.

[vsski]

I do know that Peter Becker once said the first version of Salo had a print run of 2000 (unfortunately I can't find the link anymore).
In TT's case I do believe that if they continue they will not use the one size fits all model either, but they only started and I'm sure have learned a lot in these past 2 years (especially of what not to do).
Prediciting a movie's success or lack therefore is guesswork at best and the same can be applied to the home video market (leaving a few obvious titles like Batman, etc. aside). Did TT think Christine would sell well, probably, did they think it would sell in one day, I doubt it.

[Moe Dickstein]

I think Fright Night was the watershed moment - because they have to go through that "scalper bait" phase. As has been noted elsewhere, the limited edition soundtrack business went through the scalpers for a while until they started losing money on certain titles and now they're mostly gone and real collectors are getting everything again.

[tenia]

One might argue this is no different than Criterion releasing The Rock, Armageddon, and RoboCop to help finance less mainstream titles.

But in this case, since TT isn't doing a lot on the releases, is it comparable ? Is it needed ?
I mean, I can understand how you might want to use Ben Button to finance lots of 4K in-house restorations, but TT doesn't seem to be doing this kind of work. They don't also make their own extras (if any...). So what would they need so much money for ?

It's bad business anyway, just by virtue of their one-size-fits-all approach.

I always despised numbered limited editions, because that's just plain elitist, limiting the visibility of the movies you're releasing and creating an artificial black market just because that's what you decided to do. No wonder they're getting beaten all over the world, either by the ones they are licensing the movies from (like Sony, releasing almost the exact same discs in Italy for 7€ apiece), or competitors like Arrow or Carlotta.

I might be wrong, but TT seems to me to just be a couple of guys buying a couple of stuff from studios happy to find some suicidal guys to release the movies they have in HD but don't know what to do with, with close to no-added value.

I don't know. I don't understand that kind of market and business, I guess. They could sell more, but choose not to. They almost never throw any extras. They are hard to buy. They are expensive.
Almost everywhere, the end consumer is the loser (except, of course, the fact that without TT, these movies might never be released at all in the US).

[Moe Dickstein]

One might argue this is no different than Criterion releasing The Rock, Armageddon, and RoboCop to help finance less mainstream titles.

But in this case, since TT isn't doing a lot on the releases, is it comparable ? Is it needed ?
I mean, I can understand how you might want to use Ben Button to finance lots of 4K in-house restorations, but TT doesn't seem to be doing this kind of work. They don't also make their own extras (if any...). So what would they need so much money for ?

Because unlike every other label - they pay for the rights for the entire run of 3k titles UP FRONT. That's where the $ goes.

It's bad business anyway, just by virtue of their one-size-fits-all approach.

I always despised numbered limited editions, because that's just plain elitist, limiting the visibility of the movies you're releasing and creating an artificial black market just because that's what you decided to do. No wonder they're getting beaten all over the world, either by the ones they are licensing the movies from (like Sony, releasing almost the exact same discs in Italy for 7€ apiece), or competitors like Arrow or Carlotta.

I might be wrong, but TT seems to me to just be a couple of guys buying a couple of stuff from studios happy to find some suicidal guys to release the movies they have in HD but don't know what to do with, with close to no-added value.

I don't know. I don't understand that kind of market and business, I guess. They could sell more, but choose not to. They almost never throw any extras. They are hard to buy. They are expensive.
Almost everywhere, the end consumer is the loser (except, of course, the fact that without TT, these movies might never be released at all in the US).

I wonder if you've read the thread? There are SEVERAL reasons (very recently pointed out as well) that the issues are limited and it has nothing to do with creating a black market or being elitist. If you prefer to pick up the discs overseas, what's stopping you? If a title sells out you can bet that after the 3 year license something more will be done with it.

It makes no sense for TT to create added value which they will not continue to own. That would be spending their limited capital to benefit Sony or Fox - does that make sense? Before anyone calls me an apologist I only just bought my first TT disc for that very reason, extras are very important to me, but I wholly understand why at this point in time they are not making new extras for the titles they release - unlike Criterion who owns what they produce and can consider it an investment, they cannot.

The point of TT for the studios is that it is streamlined - they get their entire fee up front, no keeping up with what was sold, no accounting oversight. TT saves money/time by only having one distributor to deal with (even TCM buys their product from SAE to re-sell).

They're not "hard to buy" It was the same process at SAE when I bought Body Double as any other online retailer. I know some of the shipping problems people have talked about being overseas - but 1, nobody is forcing the extra insurance etc on you and 2, these are US releases geared to the US market you're always going to have some extra baggage when buying internationally, just as I would if I bought UK Region B releases.

[matrixschmatrix]

I'm not really sure I care about their reasoning behind, for instance, not creating new features for the releases they put out- I'm not arguing that they're doing things in an irritating way because they're crazy, I'm arguing that the end result is a mediocre product with a sky high price tag that you have to rush to get if it's a popular title. Whatever the logic behind how that came to be, it's really annoying, and suggests that the TT model (whatever its benefits for the business) is a seriously flawed one.

[Moe Dickstein]

That's certainly a valid argument, and it comes down to how much do you want the particular title for just the movie? I myself have had several that I've wanted but just not quite bad enough to pay the price (Bell Book and Candle for example). De Palma is a special case for me and even then I didn't get The Fury. But the fact is, none of us have a "right" to these movies on the terms we prefer. They are assets owned, and the people that control them will release them or not release them as they see fit. If this model works for Sony, Fox and now MGM, then I expect it to continue. Hopefully as things mature there can be some way found to add value to the releases, but so long as the enterprise is self-sustaining (I don't believe it's terribly profitable) it shall continue.

[Taketori Washizu]

It will only stop when companies like this put out subpar releases at 30 bucks a pop. Sorry TT, you aren't the Criterion Collection. If they are going to enter a niche market like this, they better add a little more to justify these prices. It's that simple. Otherwise stay out of the game.

[Moe Dickstein]

So vote with your wallet.

[tenia]

I wonder if you've read the thread? There are SEVERAL reasons (very recently pointed out as well) that the issues are limited and it has nothing to do with creating a black market or being elitist. If you prefer to pick up the discs overseas, what's stopping you? If a title sells out you can bet that after the 3 year license something more will be done with it.

It makes no sense for TT to create added value which they will not continue to own. That would be spending their limited capital to benefit Sony or Fox - does that make sense? Before anyone calls me an apologist I only just bought my first TT disc for that very reason, extras are very important to me, but I wholly understand why at this point in time they are not making new extras for the titles they release - unlike Criterion who owns what they produce and can consider it an investment, they cannot.

I've read it but still don't understand how it benefits any end-consumer to release bare-bones titles at the price of an overload disc even with a brand new transfer. Don't misunderstand me : I get your point, but in the end, again, the end consumer is getting the bad end of the stick. It's hard to justify a $29.99 product with close to no extra value, especially when the equivalent are from 7€ to 15€ everywhere else, that's all. And please, don't tell me "then, go where it's 7€". I will. But 95% of the US consumers won't. And that's TT market.

Everyone complains about the Disney vault, but TT is just no better. If the title sells out, that's 3 years of unavailibity, and anyway, when it's not sold out, I have yet to see some discount of these titles.

But we'll see what happen to Fright Night next year, I guess.

They're not "hard to buy" It was the same process at SAE when I bought Body Double as any other online retailer. I know some of the shipping problems people have talked about being overseas - but 1, nobody is forcing the extra insurance etc on you and 2, these are US releases geared to the US market you're always going to have some extra baggage when buying internationally, just as I would if I bought UK Region B releases.

Any exclusivity makes it hard to buy. It's just not the same wide availability.

[Taketori Washizu]

I thoroughly understand the business acumen behind studios like Fox and Sony not wanting a general release for a lot of these titles. If infinite copies of Swamp Water and The Sound and the Fury were pressed and put on the shelves of Best Buy, Target, Wal-Mart etc. they wouldn't sell many. I get that.

However, if studios want to worry about a return investment and high overhead costs on a lot of these "obscure" titles, then make a streaming service available online for everything. Just don't deny it outright to film fans or reduce it to "middle men" like Twilight Time or Olive Films that do not have the resources to spend, to give quality releases or can't lower the prices because they can barely stay afloat.