Read Blue Glow: First evening with the Netflix Roku box.

Well, this is officially the first time the word "Boffo" has been used in conjunction with B-Side. Richard Horgan of FilmStew wrote a nice piece last week on B-Side’s Roll Your Own Screening program for Super High Me. The very generous subtitle reads:

Although Super High Me’s grassroots exploits are of an entirely different nature than Indiana Jones’ imminent record-busting totals, they deserve to be celebrated just as loudly.

The story includes a good summary of the numbers behind the program:

From April 20th through this past Tuesday, May 20th, there were a total of 1,576 grassroots screenings in 975 cities (with 1,076 of those taking place on opening day). Events ranged from private parties for 20 people to public screenings at 2,000-plus seat auditoriums.

… as well as an interesting analysis we did comparing the attendance for our opening day (4/20) with the opening weekends of the top-grossing documentaries of all time:

"Our opening weekend attendance is greater than six of the top ten grossers of all time (including March of the Penguins, Sicko and Winged Migration), which had more typical platform release patterns. It’s worth noting also that Super High Me’s opening attendance is tallied from one day, and primarily single screenings, compared to three days with 4-5 screenings per day for traditional exhibition," [Hyams] continues. "Considering that the vast majority of films spend more on marketing than they earn in gross theatrical revenue, this level of attendance for a documentary is unprecedented. Even before taking into account the marketing budget for Super High Me, which was less than $5,000."

The last point is really the key behind B-Side’s exhibition model, what we call Groundswell. Yes, our screenings are free, so there is no box office. However, according to the MPAA’s annual research statistics, most — if not all — movies lose money during their theatrical run.

In 2006, the theatrical marketing costs for the average studio film was $34.5 million. That same average film grossed $32.7 million at the box office. Once you factor in the 50/50 box office split with exhibitors (theater owners), you have a pretty unattractive business. And while you’re at it, factor in the $65.8 million production cost for that same average film. That leaves the golden ratio of $4 spent on production and $2 spent on marketing for every $1 in gross theatrical revenue. Yikes.

So why is it that studios even bother releasing films in theaters? Trust me, it’s not because of the magical communal experience of sitting in a dark room together. Sure, that might be why we go, but to these guys it’s just math. 2/3 of industry-wide revenues are from DVD sales. Most films generate gross DVD revenues roughly equivalent to box office — but without the pesky 50/50 split with theaters (retailers take less than 25% of DVD sale price). The rub, of course, is that no one has figured out how to sell $100 million worth of DVDs without first doing $100 million at the box office. (Forget for the moment the Disney straight-to-DVD machine).

So for us, the idea was pretty simple. If everyone else loses so much money trying to make money at the box office, what if we just tried to not lose money? Could we get the same benefits without any of the risk?

By turning exhibition over to fans — the community — we have found a way to get some of that dark theater communal magic, plus a whole bunch of press and buzz, without spending all that money. And the results have been pretty amazing so far:

• widest ever single day opening of a documentary (1,076 screens vs. Fahrenheit 9/11’s 868)
• higher opening weekend attendance than more than half the top-grossing docs of all time (see above)
• peaked at #29 on Google Trends Hot 100 searches across the US.

And then there’s this:

Meanwhile, over on Netflix, whose Red Envelope Entertainment was a producer on the film, Super High Me is, according to Red Envelope exec Liesl Copland, "tracking better than some of the best reviewed films of the year [that we've been involved with]."

So the real proof will come on June 17, when the Super High Me DVD streets. Until then, I’m flattered to hear Richard describe our campaign as "nothing short of groundbreaking."

Check out the full story here.

One of the key reasons we all don’t have 100 megabit broadband connections to our homes is what is known in the telco industry as the last mile. The last mile is the gap between the fat, fiber-optic network pipe that runs through every city and your home.

In the digital entertainment world, the big problem is what I like to think of as ‘the last 10 feet’ – the distance from your computer to your flat screen tv. The problem is not a technical one — a trip to Best Buy is all anyone needs to get hooked up — it’s a business problem. For digital distribution to go mainstream, there needs to be something as simple and easy — and ubiquitous — as the iPod / iTunes combo was for music. Best Buy is not the answer for my mother, which is my general litmus test.

So why is it a business problem? Studios and other distributors who control licensing are sitting tightly on the digital rights to their films. The pipes are empty without Spiderman and Pirates of the Caribbean. And the people who own the spigot want to make sure they are the ones who control things like pricing and windows — and not the plumbers (Apple, Microsoft, Netflix, etc).

The issue is the content owners don’t actually understand (or care) about how people want to consume entertainment in a digital world. Since the plumbers already spend a lot of time in your home and day-to-day life, they have a much better intuitive grasp for how you want to watch, listen, and pay.

So it’s a business problem. That is, until someone comes along with enough market share to really throw some weight around, as Apple finally did with music. And while they have way more than half the market in the digital world, that market today is still very, very small.

The contenders to date have been Apple, Netflix, Amazon, and recently Hulu. At the beginning of 2008, all were primarily small-screen-only solutions (TiVo members can watch Amazon Unbox titles on their TV, but that is a very small part of the very small market). Then, in January the Apple TV finally got real with rentals and HD. Everyone (except Hulu) followed suit with announcements of impending big screen solutions.

The problem now becomes that everyone is going to want to be the one to sit between your computer and your TV. I say the one because if I already have a DVD player, cable box, and Wii, I’m running out of shelf space and HDMI inputs to my TV. This is partially why Vudu is in trouble, and also why TiVo, having not won the war, is going to lose.

Interestingly enough, the folks out in the lead here are at Microsoft. As of last month, there have been over 19 million Xbox 360’s sold. Each one is both broadband and HD-compatible, and the online store sells feature films on demand. Microsoft’s problem is that they’re not Apple, who clearly gets my mom in a way that Microsoft never, ever will.

Which brings us to Netflix. Yesterday, Netflix finally made the last 10 foot leap with the Roku Netflix Player, a $100 set-top device that lets Netflix subscribers stream any of the 10,000 Watch Now titles available on Netflix to their TV. Early reviews are extremely positive. Saul Hansell of the NYTimes Bits has a good breakdown of why here.

What’s smartest about Netflix’s move is that they decided to stay out of the hardware business themselves. The last 10 feet will be a bloody battle, and aside from the one winner, the real beneficiaries will be those with a) great selection and b) the ability to guide audiences to discover what they want. Which is what Netflix does just about better than anyone on the planet.