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Digital: The Final Frontier

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Earlier this week Deadline Hollywood broke the news that my debut feature film, Pulp, would be the first feature film to premiere on Xbox. The same day, HMV, a major British entertainment retailer, announced that it was going into administration, which is broadly the equivalent of filing for Chapter 11. HMV started life in 1921 and is the last great music, film and TV retailer on the British high street. Its decline symbolises a radical shift in the way our entertainment is delivered.

A number of people have raised their eyebrows when they've heard Pulp is going to premiere on a games console. Those people usually haven't seen what games consoles have become. Xbox is an entertainment and communication hub. In addition to games, users can watch films, television, listen to music and communicate directly with Xbox users around the world. With tens of millions of consoles worldwide, Xbox has a sizeable audience.

Pulp, an irreverent crime caper set in the world of comic books, has no big-name stars, and it was the production team's first feature film. In film marketing terms, that means it's a hard sell. Even though the film has been nominated for comedy awards, and screened at festivals around the world, convincing people at the multiplex that they should see a low-budget comedy instead of Skyfall requires a great deal of marketing expenditure. Theatrical distributors we spoke to said that an average UK release now costs £2 million. Those marketing and distribution costs are applied to the film, which means that unless the film is a major success, it will make a loss.

We thought about a limited theatrical release for Pulp, but there are a couple of disadvantages in that approach. The first is that there are certain economies of scale and a groundswell of awareness that comes with a wide release. The average consumer is even less likely to choose an independent film if he or she has never heard of it before and it's only playing in four or five screens around the country. The second is that even though a limited release costs less, it has even less chance of taking the film to profit, and has the added disadvantage that it will not act as a promotional tool for a DVD or VOD release.

Thirty years ago, a film that lost money at the cinema stood a good chance of eventually recouping its costs on VHS. Then came DVD, which was a bonanza for the industry as consumers not only purchased new films, they upgraded their entire VHS libraries. The bottom has not quite fallen out of the DVD market, but it is in a steady decline. Companies can no longer rely on DVD to recoup the costs of a film, which is why there are fewer and fewer low-to-mid budget made-for-DVD films.

Without the safety net of DVD revenues, a theatrical release would have meant that Pulp might never have turned a profit. A straight to DVD release didn't make sense for Pulp, because all the research we've done suggests that feature comedy DVDs don't sell well unless they've had a significant theatrical release. Having gone through the challenging process of making a film, we found ourselves in a Catch 22 situation when it came to getting the film out to an audience.

Some filmmakers don't care about profit - it's all about the art. I'm maniacally passionate about filmmaking. But it's sensible to have an eye on profit. Turning a profit means that you've reached a decent audience. Turning a profit means that you've recouped funds for the investors who believed in the project and backed their instincts in a business that is notoriously risky. Turning a profit also means that there's a good chance you'll get to make another film, which, if you love film, is what it's all about.

Our challenge was to release Pulp in a way that would reach a sizeable audience and give the film a good chance of turning that profit. After talking it through with my UK manager, we decided to approach Microsoft. It has become the norm for people to download films via their console, and Xbox has now become a significant player in the film world. But until now they've never used their network to premiere a film.

When the team at Xbox saw Pulp they agreed that it would be a great fit for their audience, so while we travelled the world showing Pulp at festivals, in the background we got to work on a groundbreaking deal. It took some time to work out the practicalities, but in the end Pulp, a tiny independent film, was able to strike a deal with Microsoft that would release the film into millions of UK households, with the potential to access Xbox's US audience if the UK release is successful.

There are those who bemoan digital releasing. For young filmmakers, it has to be the future. In the 1960s and 1970s a small, independent film could find success at the cinema. Films could run for weeks and build an audience through word of mouth. In the 1980s and 1990s, independent films could lose money at the cinema and turn a profit on VHS or DVD. Now, if a film doesn't draw a decent audience in its first week, the cinema chain will pull it. And without a big marketing investment, it's hard to make a dent in the declining DVD market.

With its low distribution and marketing costs, digital releasing offers independent films the chance to find an audience. It's very sad to see companies like HMV struggling, but encouraging that digital releasing is finally coming of age. Over the next few years I hope to see more and more independent filmmakers find new and innovative ways to reach audiences, and for there to be a renaissance in independent filmmaking as financiers realise that digital releasing offers a profitable way to back new talent.

Pulp is released on Xbox in the UK on 4 March 2013