Films for free: Lights, camera, download

Websites like Spotify and Last.fm allow us to discover new music and enjoy our favourite tunes for free. So why can’t we watch movies the same way? Tim Walker discovers why Hollywood is dragging its heels

(TM&Marvel)

After years of delay, the internet has finally been allowed to revolutionise my music consumption. I can discover new artists using Last.FM, seek out their back catalogue via Spotify and, if I have to own a song, I can buy it from iTunes.

The same services are readily available for movies. I can add an application to my internet browser that will tell me, every time I visit Amazon or IMDB, where to find the relevant film online. I can stream it straight through my laptop. And if I have to own it, then I can download the whole thing in high-definition, for free. There’s one problem – it’s illegal.

So when am I going to get a Spotify for films? An ad-supported free streaming service with a big back catalogue – maybe with a paid subscription version offering new releases or extra content like extra features on a DVD? If the music industry can get its act together, how long is it going to take the movies?

Most of the millions of people that downloaded illicit copies of Wolverine didn’t do it because they want to stick it to the man; they did it because it’s the easiest way to access the movies they love. If there was a way they could do that without jeopardising the future of film, and without risking the wrath of the copyright police, they would.

FindAnyFilm.com is a new website, funded by the UK Film Council, which points users to viewing options for a catalogue of 30,000 films, be it a television screening, a DVD outlet like Amazon or Lovefilm, or a legal download and streaming source. If the desired film isn’t available in the right format, users can request an email alert for when it does become available. FindAnyFilm was launched in January and took just 10 weeks to get its first million visits. It has proven beyond doubt the public’s huge appetite for film downloads.

A third of the 30,000 films catalogued on the site aren’t legally available in the UK in any format. Only around 1,000 of them are legally available online, from Sky, iTunes or sites like Coolroom and Blinkbox. Yet 60 per cent of the 55,000 email alerts requested by the site’s users are for downloads or streaming. The most popular search on the site is for the vampire flick Twilight. Every single alert request for that film is for a download or streaming source.

The film industry has learned from the mistakes of the music industry, and knows that the web is where the future lies. But getting there will be a struggle. Turning to lower-profit business models such as Spotify is more plausible for musicians than for filmmakers; the inherent costs of making a film are significantly greater than those of producing an LP. Then there are the funding structures that allow a film’s production to get off the ground. To generate a budget, filmmakers often have to sell the rights to a number of different companies in various global territories: one chunk to a cinema distributor in the US, for instance, and another to a TV channel for first broadcast rights in New Zealand. Switch to a globalised market, in which all those films are suddenly available via the internet, and those rights deals become worthless.

Moreover, this complicated financing structure means that licensing old films for inclusion on a service resembling Spotify or Last.FM is nigh-on impossible. “If you’ve got one company that’s the sole financier of the movie and has cleared the rights, then you could do it,” says Peter Buckingham, head of distribution and exhibition at the UK Film Council, and the man in charge of FindAnyFilm. “But if you’ve got a film that was financed by quite a few sources, a few years back, and you’re trying to figure out who’s got the rights, then it’s very difficult. Everyone balks at it, so films get left on the analogue shelf.”

Even if the industry could overcome this red tape, would an ad-supported service be sustainable? Advertising revenues have collapsed in the recession. Hulu, a US website launched in 2007, offers ad-supported free content – including a decent array of movies – streamed from 130 major content providers, including NBC, Fox and Comedy Central. Its creators are said to be considering a UK launch.

But perhaps the more attractive element of Spotify – to content providers, at least – is its premium service. Its unlimited access to content for a monthly subscription is similar to the service offered by DVD rental websites such as Lovefilm, which has a catalogue of around 65,000 titles. In 2005, Lovefilm became the first site to offer legal movie downloads in the UK, starting with pay-per-view rentals and, later, pay-to-own downloads. The service was halted earlier this year for redevelopment, and a relaunch is planned for later in 2009. Lovefilm are keeping shtum, but it’s not a vast stretch of the imagination to wonder whether the new, improved service will offer streamed films.

“The film industry has an advantage over music,” says Andy Frost, director of media at technology consultancy Detica. “Film has a well-understood rental market, which will translate easily to the internet. As long as a decent catalogue is available online for a fair price, it will work, because consumers get what rental is – in terms of films, they don’t really understand the notion of ‘free’.”

iTunes now offers a film rental and purchase service. New films, however, cost considerably more to download than they might at the cinema, and sometimes even more than on DVD. Take Ridley Scott’s Body of Lies. To rent it on iTunes costs £3.49, more than the cost of a basic monthly subscription to Lovefilm. To buy it would cost £10.99, just shy of the Amazon DVD price, and considerably more than I’m prepared to pay for a download of a poorly-reviewed film – especially when I could find it quickly and simply elsewhere online, for free.

The UK film and TV industry estimates that it’s losing almost £500m a year to piracy. Cinema profits remain buoyant, but home entertainment revenues are at rock bottom. Liz Bales is Director-General of the Industry Trust, a copyright protection organisation. “The lion’s share of the British film industry’s revenue comes from home entertainment,” she explains. “About one in 30 British films break even at the cinema, and about one in 10 break even through the whole life cycle. The other films are all funded by those few.”

Even a legal download culture would probably be unable to generate the necessary profits to maintain such a system. “The number of people that would consume any one film for, say, £1, would never be sufficient to support the current level of investment in films,” Bales continues. “In future, risky productions won’t get funding: the films that are socially and culturally significant, like Kidulthood. You can’t guarantee you’ll get much box office for them, and if you can’t sell them on DVD, where are you going to get the revenue? We’ll see a contraction of investment.”

That will be sad for film fans as well as filmmakers. While the industry fights piracy, the internet is also allowing it to interact more directly with audiences. Director Jon Favreau has been Twittering regularly from the set of his blockbuster sequel, Iron Man 2. Actress Natalie Portman has just launched Makingof.com, a social networking site for anyone interested in movies. Couldn’t the goodwill of fans be harnessed to fund film production via the internet?

When Radiohead released their seventh album In Rainbows in 2007, they used a “tip-jar” system, encouraging people to pay what they liked to download it. The Sellaband site asks fans of unsigned acts to contribute to the cost of producing an album. Donors receive a copy of the record and a small share of any profits. Since 2006, 30 bands have reached the $50,000 target needed to start work on their records. Could the same thing work for films?

FindAnyFilm’s results suggest that there’s an audience appetite for the sort of films that Bales says are under threat. Of the 55,000 alerts requested for films on the site, only 6,000 are for the blockbusters in its top 10. The rest, says Buckingham, are niche titles.“For the first time,” he says, “we have data that we can put back into the industry and say, ‘There may be a market here that’s bigger than we thought, and even movies that we thought weren’t worth anything anymore, could find a commercial market.’”

The industry is keeping a close watch on music’s new business models. But experts aren’t convinced that even the music industry’s innovations are viable in the long run. “Will there be a Spotify for films?” says Frost. “We don’t even know if there’ll be a Spotify for music in six months. And Last.FM is on its last legs – it’s started charging non-UK users. It’s a wonderful service, but it can’t get the business model right.”

“There’s no single model,” agrees Frost’s colleague, Dan Klein. “We’ll have a range of services and prices. Some people call it the Coca-Cola model: you’ll pay £3 for a small can of Coke in your hotel room, £1 from a vending machine, £5 with a Bacardi in a bar. It all depends on where you are and how much you’re prepared to pay to consume it. It’s the difference between free tracks with ads on Spotify and paying £100 for a Madonna ticket.”