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The current situation of the COVID-19 pandemic has created a serious impact on the theater business. And because of lock-down and social distancing, and all over the globe, the US $40 billion business has shut down. The Virtual Cinema Model can be a big breakthrough now and become a viable business for distributors and cinema theater companies.

At SmallDay IT services, we leverage modern management skills and IT tools to optimize and manage software delivery and life cycle, and together we can explore and convert this opportunity into success.

The Virtual Cinema Model (VCM) consists of a digital platform where distributors or theater companies upload their content and customers pay for each piece on video on demand (VOD) content. Users can purchase the content after signing up for an account. The purchase enables the user to view the movie any time afterward in the library section. There can be two ways through which the users get access to the content. Firstly Electronic Sell Through (EST) in which upon purchase the customers get full access to the content theoretically for an infinite period. The second pathway to access the content is through the Download to Rent (DTR) where the users get access for a limited time upon renting. Once licensed for viewing, the content can also be downloaded for offline viewing. However, Digital Rights Management (DRM) enforces restrictions and prevents users from making illegal copies and sharing content available to them.

As the lockdown continues and even afterward the social distancing would not let cinema theaters to get back on the track at least for some more time. Thus there is a need for an alternative to keep this sector working. Therefore the VCM has great potential to sustain in the market and add on an alternate source of revenue collection.

The future of the model even after the current circumstances is very bright. In the last few years, significant developments have been taking place in the field of video streaming. As per Video Advertising Bureau (VAB), the total number of connected video devices in the US has reached over 820 million. Around 26% of the streaming media player users downloaded the online rented video whereas 25% amongst them downloaded the online purchased video.

Virtual Cinema Model with VOD

However, the Virtual Cinema contains much more perks along with an alternate revenue source method. These platforms are also independent of various physical constraints, such as:

  • The number of seats in the auditorium as there is no physical but virtual auditorium.
  • Exemption from the high-cost management of theatre auditoriums to a much cheaper and better VOD platform. That is if the company is not doing well in maintaining the physical theatre, they will still have an option to offer it online without much investment in infrastructure.
  • Based on demand, the lifetime of the movies can be longer unlike traditional theatre where there exists a constraint on the number of screens, and irrespective of the demand the replacement has to be done because of the predefined schedule.
  • And most importantly, now small physical theatres have a finite customer reach. But after the incorporation of the virtual cinema, the reach would not be limited to a specific region or community and exploring a new customer base.

Potential Benefits

The Virtual Cinema Model can also add on an additional source of revenue through the Ad-supported model (AVOD) model. Running video ad units from third party advertisement companies can monetize the model. The demand for OTT advertising has increased much faster than the TV ad revenues, thus proving out better than the TV models and a high potential source of income.
The key to the success of the Virtual Cinema Model lies in the effective and efficient marketing of the platform:

  • Search Engine Optimization: Optimizing the platform is effective at the same time inexpensive way of ranking up the platform online.
  • Social Media and Email Marketing: Keeping the existing users connected is an important key to success. Regular emails of new releases, viral clips, polls, quizzes, and image-based posts to keep the existing users connected and updated.
  • Launching Live Streaming and Premiere shows or organizing Q&A events on the platform.
    Offers and Promotions: To keep the customers’ interest alive, offering timely promotions, and offers on the platform relating a new movie release, seasonal sales, and festivals are also necessary. The subscribers’ mail IDs can be used to keep sending them a fancy mail stating the promotion.
  • Display Marketing: Advertising service on different platforms and affiliate marketing can help in getting great results.

In this era of digitization, where technology is becoming an effective method of communication, this Virtual Cinema Model can prove out to be one of the greatest breakthroughs in the marketplace. Theaters and Film distributors can leverage VOD to win over this crisis. Please touchbase with the SmallDay team, to pitch in the greatest battle of the century.