Perth-based cinema on-demand startup Demand Film has expanded into North America, in a move that will see the platform’s films available on more than 20,000 screens across the continent.
The expansion increases Demand Film’s potential audience to half a billion movie goers, with the platform already available in Australia, New Zealand, Ireland and the UK.
Described as the ‘Airbnb for cinemas’, Demand Film utilises low yield nights at the cinema, crowdsourcing audiences to those cinemas with niche offerings of independent documentaries and films.
“We were acutely aware that distribution was problematic for anyone except the studio — documentaries and independent films always struggled to find a place,” co-founder and managing director David Doepel tells StartupSmart.
“At that time there were huge amounts of empty theatre spaces early and mid week …We thought this was an elegant solution.”
The expansion comes as part of the growing trend of ‘event cinema’ where customers are seeking alternative content and movie-going experiences.
“Our business model is now averaging 129 people per movie screening on quiet nights such as Mondays and Wednesday, when cinemas would be lucky to get even 10% of that number,” Doepel said in a statement.
Previously known as Leap Frog Films, the company re-launched itself as Demand Film in August 2016.
Revenue for the company reached $1.2 million in the 2015-16 financial year, and Doepel says Demand Film is on track to reach a similar revenue turnover this financial year.
Demand Film plans to hit $4 million in global turnover in the coming year with the addition of the new North American markets.
Doepel notes a North American expansion was crucial for Demand Film to scale its business model, with the continent dominating 50% of global cinema sales.
“This is true for any business in Australia: to do anything at scale we are not a sufficient market. We always thought of ourselves as needing to be larger,” Doepel says.
He estimates the theoretical limit for top-line revenue in Australia in the crowd-sourced cinema sector is about $12 million, and the global business is at least 10-15 times that amount.
Doepel notes that in the US, the projected revenue for the state of Florida alone is equivalent to the estimated revenue for Australia.
So far, the response from North American audiences has been positive.
“I’m really pleased with the response around these films. There’s been a really positive response from cinemas too,” Doepel says.
“Already we’ve had 50 requests for screenings.”
Demand Film plans to be in the top 20 global markets within a couple of years, with the exclusion of China. The company is planning its expansion to Singapore next, and has a German language platform built and developed. South American markets are also in their future sights.
“The business is moving so fast that if I looked back three years to now I could not predict this is what we would be doing,” Doepel says.