Direct-to-Video (On Demand): New Industrial and Cultural Valuations of Nontheatrical Film Releases

Abstract

following the release of annihilation (2018) on Netflix in America, The Economist published a review titled “Is Netflix the New Straight-to-Video?” (NB). In it, the author takes note of a handful of other films that were dumped onto the subscription video-on-demand (SVOD) service over the past several years, including The Cloverfield Paradox (2018) and Mute (2018), after their distributors decided it would be more financially responsible to shunt the films onto someone else's shoulders. However, the central question raised by the review's title is not addressed outside of these initial comparisons. This is curious because the question is a salient one, increasingly relevant in a post-COVID-19 world, where theatrical exhibition is on precarious economic footing. While The Economist sidesteps its proposed question, I slightly adjust it to argue that digital streaming services that rely on subscription revenue as their business model have become the new home of direct-to-consumer titles, including those that were initially planned for theatrical release.Commonly dismissed as low-quality, culturally vacuous, and artistically dubious, direct-to-video (DTV) cinema has actually been a prominent part of the American film industry since the middle of the 1980s, when VCR penetration rates skyrocketed throughout the country. During this initial ascent, DTV titles tended to cluster around the horror, action, and erotic thriller genres; in other words, the types of films released onto the DTV market were viewed as niche, morally questionable (in terms of Reagan-era American social norms), and lacking significant financial prospects. However, they were also profitable enough that a number of companies came to embrace DTV as a production and distribution norm. Indeed, as Cannon Group's Menahem Golan put it, “theatrical is not the only mouth to feed . . . There is space for the mediocre!” (Yule 85). Thus, DTV came to connote a stigmatized form of cinema, one that lacked the cultural, moral, economic, and social valence to grace the consecrated space of the theater.Despite its scarlet-letter reputation, DTV as an industrial logic is actually quite sensible. In the 1990s, an average DTV feature had a budget between one and three million dollars (Sanjek 98), while the typical budget for a theatrical feature in 1994 sat at $34.3 million, which ballooned to $50.4 million when marketing and print costs were included (Eller). Whereas studio theatrical releases required millions of tickets to be sold to become profitable before ancillary markets were taken into consideration, DTV titles needed to make only between fifteen thousand and twenty thousand sales, a relatively surmountable number considering the thousands of video stores that emerged throughout the 1980s (Lobato 24). With a low threshold to clear to enter profitability, major studios slowly entered the DTV market by the mid-1990s, usually with animated sequels to successful theatrical films, relying on proven children's franchises rather than incurring extensive marketing costs.However, as video stores and physical media began losing popularity throughout the 2000s (Herbert), the DTV market began losing its economic foundations. If there were no video stores to purchase rental copies and provide a built-in economic base, how could this particular mode of distribution survive? Certainly, basic and premium cable networks provided a safety net for certain types of DTV staples, such as erotic thrillers and action films (securing an eighteen-month exclusivity deal with a premium cable network like HBO or Showtime could generate $500,000, including the stipulation that the film not be released onto video for at least three months), but the main sources of income for producers were rentals and sell-through (Sanjek 98). Rather than think in terms of physical media, our attention should shift to the maturing SVOD market, which could serve as a replacement for the lost market of video stores and VHS/DVD sales.This article argues that DTV releases have been an important component of the media industries since the 1980s and that their business models provided alternative revenue flows for both Hollywood studios and independent producers and distributors. Furthermore, I argue that the rise of streaming services has fundamentally altered the types of films that skip theatrical release, as well as the financial calculus for DTV cinema. Rather than “lowbrow” fare meant for marginal audiences, contemporary DTV releases are quite often major studio productions that are deemed to lack adequate earning potential in the theatrical window; instead of risking an embarrassing and unprofitable theatrical release, distributors of these films are now able to sell the exclusive rights to streaming services such as Netflix, thus guaranteeing a certain amount of revenue from the film. Hence, the scope of this article is restricted to original DTV releases and films that were originally planned for theatrical release but were instead sold to streaming services by the distributor. This means I do not consider premium video-on-demand (PVOD) releases, such as the many Disney animated films released onto Disney+ during the pandemic, nor do I consider simultaneous theatrical and streaming releases, an approach embraced by WarnerMedia to generate subscriptions to its HBO Max service.I begin by defining the field of DTV, including its early history, analyzing the industrial logic underpinning it, and contextualizing the types of cinema that came to be inherently associated with the term. This is the period of time when DTV cinema was at the furthest margins of the film industry. Then I explore the interregnum period wherein DTV releases were democratized through boutique distributors and Netflix's original business model, an era that saw a decline in production but increase in accessibility. Finally, I assess how SVOD services have become distributors for films that could be released theatrically but are “dumped” by their production company for reasons related to profit potential. Whereas DTV was originally understood as the domain of disreputable cinema within American culture and the film industry, by the mid-1990s, major Hollywood studios recognized its potential as an ancillary revenue market, leading to a normalization of the release strategy through a cavalcade of children's films. Furthermore, with the maturation of e-commerce platforms and the rise of Netflix's DVD-by-mail service in the mid-2000s, DTV releases became more available to both filmmakers and audiences. Finally, DTV has seen a further shift in the past five to six years, with numerous streaming services buying Hollywood studio films intended for theatrical release. Far from the horror films and erotic thrillers of the early DTV days, DTV streaming releases are often indistinguishable from theatrical releases; the studios recognize that selling films with perceived poor box-office potential to streamers is a safe business strategy, one that offers an immediate payday rather than amortizing costs through multiple windows. This is a new business model that offers Hollywood distributors alternative revenue options and has the capability of maintaining production of potentially challenging material. Instead of direct-to-video, we should now think in terms of direct-to-VOD.The usual image conjured to mind when DTV films are mentioned falls in the territory of legendary low-budget director Fred Olen Ray, who had 161 directorial credits to his name as of July 2021. Ray and other DTV directors’ workflow is in the tradition of Roger Corman's American International Pictures, which emphasizes speed, economic efficiency, and sensationalism. Exemplary of this model is the production of The Phantom Empire (1988), an homage to Saturday serials and The Lost World (1960). Ray recounts that production began surreptitiously, with shooting taking place after the day's filming for Commando Squad (1987), a different movie Ray was directing, had concluded. Furtively, Ray and a number of cast and crew whom he convinced to work on the clandestine project (including B-movie stars Sybill Danning and Russ Tamblyn) shot six pages of the script on sets constructed for Commando Squad, ultimately finishing the film later (Ray 185). The negotiation of distribution rights for the film is further exemplary of many DTV efforts. As Ray puts it, he contracted with Film Ventures International (FVI) for the international rights in exchange for a $60,000 advance. As part of the deal, however, FVI demanded an additional ten minutes of runtime, leaving Ray to scramble his cast and crew to a California desert location to film a scene that was supposed to be taking place in the center of the Earth. Ultimately, FVI bought the US home video rights for $80,000, only to stiff Ray out of $35,000 on the deal (Ray settled out of court but claims to have lost $10,000 on the project with attorneys’ fees included; Ray 185–86).What this example of The Phantom Empire illustrates is how deeply imbricated production and distribution exigencies and logics are in the DTV realm, as well as how they impact the discourses surrounding DTV cinema. Most of the films that are released DTV are released into what Ramon Lobato calls “the slaughterhouse of cinema,” a term he has adapted from Italian literary scholar Franco Moretti's “slaughterhouse of literature” formulation, whereby “low cultural” forms of literature such as dime-store detective novels are consumed and then forgotten (32–33). Lobato is referring to the 99 percent of films that are released but never penetrate the cultural consciousness of national/global societies, arguing that these films make up the invisible majority of global cinema production. Despite the large number of films being produced under this industrial model, they are invisible precisely because they operate outside of the institutions that preserve cultural memory and bestow cultural legitimacy; consider, for example, DTV movies’ ineligibility for Academy Award consideration due to their nontheatrical distribution model (Lobato 33). In the case of The Phantom Empire, then, its production was hampered by its clandestine nature, low budget, rushed shooting schedule, and reused sets that were often inappropriate for the material portrayed on screen; its distribution was equally precarious, with an untrustworthy distributor withholding funds that could have strengthened the film's production values, as well as remunerated the film's producers to a degree such that they could reinvest that money into future productions. With “unreleasable” being the typical adjective ascribed to DTV films (Sanjek 98), such production and distribution hurdles make it incredibly difficult for any DTV film to escape the slaughterhouse of cinema, regardless of actual artistic or cultural merits.Historically, DTV cinema has been categorized in a variety of ways, ranging from content basis to distribution logic to exhibition venues. Randy Pitman, Video Librarian editor, conceptualizes DTV in five ways: exploitation genre films, including staples such as action, sci-fi, horror, and erotic thrillers; live-action and animated sequels that are deemed profitable but not lucrative enough for a theatrical release; shelved projects that studios revive when external factors elicit a release, such as a hit film with similar subject matter or an actor in the film suddenly becoming popular; movies deemed too controversial for a theatrical release; and non-studio and independent projects that are self-released, usually via the Internet (Hall 201). Cineaste writer David Sanjek categorizes DTV in a more explicitly distribution-focused way, offering three general types. The first type of DTV film he delineates includes those created by major producers with the DTV market explicitly in mind. Exemplary of this category are the works released under Roger Corman's New Horizons label, which was the distributor for his Concorde Pictures, and Charles Band's Full Moon Entertainment. Both of these companies focused exclusively on the home video market, eschewing the theatrical circuit because, as Corman put it, “video amounts to virtually the entire playing field” (Sanjek 99). The second type of DTV film for Sanjek includes films that would have been considered small for Hollywood in the 1990s (budgets under $15 million) and unable to be effectively marketed. Thus, the solution for the studios was to relegate these titles to the home video market and save on marketing and print costs. Sanjek's final type of DTV mirrors Pitman's final category: independently produced and distributed films, self-financed and usually lacking in traditional production values (99–100). Thus, the categorization of DTV films often discursively places them into a category separate from mainstream filmmaking, regardless of the artistic and cultural merits of the films.This is not to suggest that DTV cinema rejects its alterity. As evident in the Fred Olen Ray case study, DTV production design is often piecemeal, with producers and directors working any possible angle to complete the film as quickly and cheaply as possible, in order to begin work on the next feature. This drive to reduce production time and budgets means DTV work often relies on negotiating reduced union rates (some as low as 50 percent) or eschewing union labor altogether. Furthermore, the budgetary strictures mean DTV as a mode of production is geographically dispersed, which leads to a compounding effect of limiting the types of locations that are typical of DTV films. As Ramon Lobato has observed, the dispersed production leads to the mansion on the outskirts of the city being an ever-present location on which to shoot (24), along with factories or abandoned warehouses; one might also suggest that the typical DTV genres of horror, erotic thrillers, and action films are particularly well-suited to use these types of locations.Historically, then, DTV cinema has not tried to hide the similarities between films, as embracing pure genre has been an important component of its longevity. Producers have genres in which they specialize, and they know their audiences have certain expectations for the films they watch; as Lobato puts it, DTV films are destined “for failure if [they] cannot fit easily into one particular section of the video store” (25). Like the classic B-movie or exploitation cinema, DTV films are not competing with studio-released theatrical features; instead, DTV producers judge their output by how well it conforms to audience expectations. Three ways to communicate to audiences that their desires will be met, as well as pique their interest, are through poster/cover art, title choice, and the use of stars. Writing about early DTV sexploitation and erotic thrillers, David Andrews notes that classic exploitation tactics were employed to generate interest, most notably through lurid and over-the-top cassette case artwork (88). Interestingly, Andrews notes a divide between video- and cable-oriented sexploitation, with the earlier video-oriented films following the traditional exploitation artwork model, showcasing the physical assets of characters who may or may not be in the film itself, while erotic thrillers made for cable television (“corporate softcore”) opted for a more subdued approach, indicating the home video market was not the core audience (88).A second way to generate interest in DTV releases is through provocative titles. Like exploitation cinema, DTV titles usually stand out from traditional Hollywood fare. The decision on a title is often a tenuous one, with many movies existing under multiple titles (IMDb includes these beneath the official title of the film through the “AKA” indicator) and with producers considering the most marketable moniker. For example, Fred Olen Ray discusses his work on a sex comedy that was originally titled Emanuelle in Hollywood (exemplary of DTV's reliance on public domain or pre-sold titles) but was changed to Bad Girls from Mars for its 1990 release (193). The film also featured Russ Meyer's ex-wife, Edy Williams, a well-known sex comedy actress, ensuring that a “name” was associated with the film, crucial for success in the DTV industry.Including stars is perhaps the most crucial element for success in DTV cinema, particularly if the producers are looking for presale financing (Parks 23). Moreover, the stars are of the B-movie variety, speaking to the parallel industry that exists alongside theatrical feature films. Some producers suggest that depending on the star and genre within which the film is working, an established B-movie star can possibly double expected sales (Walker 219). Typical B-movie stars include such action thespians as William Smith, John Saxon, Fred Williamson, Cynthia Rothrock, and Robert Z'Dar, as well as scream queens Linnea Quigley, Michelle Bauer, and Brinke Stevens (Freibert 215); for many actors, DTV is their domain (Lobato 25). Some use it as a launching pad, and some spend the twilight of their careers working outside the theatrical circuit.In other words, rather than attempt to mimic theatrical studio releases (outside of parody DTV that arose in the 2000s), DTV producers lean into the generic aspects of production and distribution, and for some this has been a comfortable way to make a living. For example, following a decline in theatrical box office receipts for horror films in the early 1980s, DTV horror film output represented fully one-third of the eighty-nine horror films released in 1986; similarly, pornographic films rapidly embraced the DTV model, as the Moral Majority movement hamstrung pornographic theaters through zoning ordinances and public denouncement campaigns, leading video sales revenue to grow from $225 million in 1983 to a peak of $425 million in 1986 and resting around $390 million the rest of the decade (Prince 353–59). Crucially during this era, no major studios were involved in DTV releases, viewing them as artistically bankrupt and, more importantly, lacking in bottom-line appeal. This was a major boon to some independent producers, as they found they were able to fill many niches ignored by Hollywood studios, including one that embraced American culture's voyeuristic appetite, by creating large numbers of erotic thrillers.In 1993, Charles Band of Full Moon suggested the DTV industry was worth $17 billion, or roughly three times as much as mainstream Hollywood (Willens). Incidentally, by the mid-1990s, Hollywood studios did recognize the value of the DTV market, jumping into producing their own films and distributing independent fare. While DTV retail revenue may have proved appetizing for the studios, Red Rock West (1993) is generally credited as the inflection point for major studio involvement in the DTV market. Distributed by Columbia Tri-Star, Red Rock West starred Nicholas Cage, but he was not deemed noteworthy enough to justify a theatrical release; instead, the distributor decided to dump the film into the home video market, where it went on to become a cult hit on HBO and in video stores (Hall 203–04). After its success in the video market, Columbia Tri-Star rereleased the movie theatrically in select US cities, where it performed very well, ultimately leading the studio to boost director John Dahl's next film, The Last Seduction (1994), to a theatrical release after it was initially greenlit for home video (Naremore 165). Similarly, cable television networks recognized the importance of original content in the early 1990s (Lotz) and began fully embracing erotic thrillers, with Time's Richard Zoglin calling them the “hottest new ticket on the cable dial” and suggesting these lurid films were the networks’ “doughy bread and butter” (Zoglin).Finally, in 1994, Disney entered the DTV market with its sequel to 1992’s Aladdin, The Return of Jafar, signaling that children's content was the new golden goose. Disney recognized the profit potential for DTV family entertainment, but the company also started a trend of expanding the marketing of a DTV film beyond provocative titles, box art, and the presence of nominal stars. With Jafar, Disney sought to create an event surrounding the film's release in retail locations, not only to spur sales and rentals of the main title, but also to ingratiate itself with retailers and draw awareness for other Disney titles. The company further expanded the logic of DTV marketing with The Lion King 2: Simba's Pride (1998), deploying a multimillion-dollar radio, television, print, and publicity campaign in conjunction with promotional tie-ins and a merchandising push (“Retailer Friendly”). As later Disney CEO and then-president of Buena Vista Home Entertainment Bob Chapek put it, “with a quality movie and the strength of a marketing campaign behind it, [Disney has] challenged consumers’ ways of thinking and made them realize that video premieres are a viable and growing industry” (qtd. in Lerman 33). At this point, the industrial logic of DTV was changing, allowing for a wider variety of tactics that often required significant financial resources and marketing muscle.Thus, by the mid-1990s, DTV was no longer solely the realm of independent producers, with Hollywood majors recognizing that ancillary revenue streams could turn a film viewed as theatrically non-viable into a steady earner—or at the very least, could allow it to break even. Further industrial and technological developments, including the emergence of the DVD format, decline of video stores, rise of boutique online retailers, and expansion of broadband infrastructure, led to changes in the role of DTV movies within the larger cinematic landscape. Without the foundation of video rentals, how was DTV to survive? To answer this question, we must turn to the new revenue streams offered by video packaging and streaming services.While DTV and the home video market flourished in the 1980s and ’90s, by the dawn of the new millennium, economic indicators had begun flagging. In particular, the number of video rental shops in the US crested in 1989 at roughly thirty thousand and then diminished each subsequent year. The most important factor behind the decline in the number of video stores was the rapid consolidation of the industry, beginning with Blockbuster Entertainment acquiring numerous independent retail locations and small chains starting in 1986; by 1993, the company controlled almost 3,600 retail outlets in America (Wasser 147–49). One impact this retail consolidation had on film distribution was a greater emphasis placed on depth of product held within a store, or “depth of copy” according to Frederick Wasser (149), rather than breadth. In other words, with Blockbuster and similar chains controlling outsized portions of the market, a new logic of emphasizing tentpole Hollywood features over independent films (both theatrical and DTV) meant that greater resources were applied to acquiring large volumes of a smaller number of films rather than buying small numbers of a larger variety of films. By the year 2000, the number of dedicated video rental stores had declined to eighteen thousand, with Blockbuster, Hollywood Video, and Movie Gallery controlling 45 percent of them (Herbert 39). With the rental market shrinking, DTV titles were in a precarious situation.The introduction of the DVD format also represented an ambivalent development for the DTV market. While it hastened the demise of rental outlets due to DVDs’ low price (thus increasing the likelihood of consumers purchasing movies from retailers such as Walmart and Target), it also offered new revenue streams and distribution outlets for DTV producers and distributors. With DVD, film companies were able to cheaply manufacture specific numbers of titles to fit the needs of their retail clients, using the Taylorist logic of just-in-time production to minimize wasted manufacturing costs.However, the retail market was just as consolidated as the rental market, and many major retailers such as Walmart objected to the content in some DTV productions, like the work of Go-Kart Films, a company that produced probing documentaries, irreverent comedies, and horror films. According to Go-Kart president Greg Ross, not only were the company's documentaries too critical of American neoliberal ideology for the mega-retailer, but Walmart also used its size to demand pricing that was nonnegotiable for the suppliers (Hall 206), foreclosing the opportunity for DTV companies to make appreciable revenue.However, along with the introduction of the DVD, the rise of the Internet in American homes beginning in the mid-1990s offered DTV companies new distribution options. Web-based DVD-manufacturing companies such as CustomFlix, IndieFlix, and BuyIndies all offered independent film producers an outlet that could print DVDs at a professional-quality level for reasonable prices. CustomFlix, for example, could take a mastered DVD provided by the filmmaker and produce a number of dubs, which were then sold through CustomFlix's website whenever a customer ordered one; with each sale, CustomFlix took a cut and disbursed a royalty check to the producer (Hall 209). Similarly, IndieFlix offered a wide variety of titles that customers could purchase for $9.95; the logic behind the price point was that each film had an audience, no matter how small, and that there was some revenue to be earned through the long tail of audio/visual media (Anderson). In other words, companies such as CustomFlix and IndieFlix served as both distributor and retailer, simplifying the process for DTV producers while allowing them to retain more rights than if they had partnered with a traditional distributor.Despite the new opportunities afforded DTV filmmakers by custom DVD-manufacturing platforms, far more important in terms of Internet-assisted growth for producers and distributors were SVOD services such as Netflix. While the company is almost exclusively known for its streaming service these days, the SVOD vanguard began as a DVD-by-mail company founded in 1997, serving as a mail-based video rental store for a decade until Netflix InstantWatch was introduced in 2007. The early years of the company saw Netflix grow its library of films available for rental on DVD exponentially, starting with 14,500 films available in 2002, increasing to 55,000 in 2005, and reaching 100,000 by 2009 (Herbert 45). These numbers are crucial because they represent a much wider selection than normally would have been available at a video store, the previous province of DTV fare.Netflix was an ideal home for smaller filmmakers and production/distribution companies, because the company not only looked for breadth of titles but also helped viewers find the smaller, more obscure titles. As independent filmmaker Stephen J. Szklarski notes, Netflix was very effective at matching viewers with titles they theoretically might enjoy through its algorithmic recommendation system. Furthermore, “their customers watch everything and are looking for new content that is hard to find on a local shelf” (Szklarski, qtd. in Hall 207). In particular, the recommendation engine—which works by grouping viewers into taste clusters based on their viewing history and determines which titles are rated highly or enjoyed by one's fellow taste cluster members—can function as a boon for DTV titles, essentially serving as point-of-sale promotion while minimizing the need for a traditional marketing campaign. Indeed, traditional DTV marketing relied on retail displays, enticing box art, and conspicuous listing of stars and special features (Freibert 217); once Hollywood studios got involved, ostentatious retail display arrangements were created, and negotiating ideal display placement, usually near the checkout registers, was a must for success (RoseNBlum 56). In an SVOD environment, however, those practices were no longer necessary. However, it should be noted that streamers such as Netflix engage in corrupt personalization, a process where “[user] attention is drawn to interests that are not [their] own” (Sandvig). In a streaming media environment, this manifests as a streamer privileging its original productions in recommendations, thereby corrupting the supposedly neutral algorithm.Instead of figuring out the best way to catch a consumer's attention in a retail environment, DTV distributors can embrace a new marketing logic, one that emphasizes the marginality of the cinema as a selling point. Highlighting the aesthetic and narrative alterity of their films has become an even more important component of attracting viewers in a digital environment, with terms like “shot-on-video” and “low-budget horror” acting as points of entry as opposed to deterrents; rather than offering a highbrow, artistic experience, DTV films are marketed as a form of subcultural capital, films whose authenticity is judged by the level of sleaze and low production values (Walker 222–23). As film historian Eric Hoyt argues, until roughly 2010, Netflix's acquisition decisions “resembled those of a Milwaukee television station in the mid-1950s—it sought libraries of popular content but was willing to accept old, foreign, or less-demanded content for the right price” (200). Thus, while a significant number of the titles in Netflix's DVD library were traditional Hollywood features, an equally significant number were DTV titles. Moreover, whereas many Americans would have used a large chain such as Blockbuster as their main video store (thereby limiting the potential selection of films to a relatively narrow spectrum of narrative and aesthetic choices), Netflix offered any member the opportunity to check out marginalized cinema.However, as Hoyt notes, Netflix began shifting its thinking between the years of 2010 and 2013, moving away from its initial logic of acquiring as large