Perth-based Demand.film is hoping its 110,000-strong customer base will put their money where their eyeballs are, launching a seven-figure equity raise via crowdfunding.
The on-demand cinema startup, which has a catalogue of hundreds of films, predominantly documentaries alongside Australian classics such as Mad Max and Crocodile Dundee, offers crowdsourced, single event-screenings in seven countries, including the US, Canada and UK, using mainstream cinema chains as venues. Around 40,000 customers are based in Australia, delivering around a quarter of the company’s revenue. It’s been described as Airbnb for movies.
Co-founder and Managing Director David Doepel (pictured), a former producer and documentary filmmaker, launched the business in 2013 as a film distribution company before rebranding as Demand.film in 2016. He wants to double the number of countries the business operates in by the end of 2020.
Doepel hopes fans of this public unlisted company’s business model will be keen to back his vision, with investments as small as $100. The maximum for retail investors is $10,000 in return for ordinary shares in the company. The raise will be down through Birchal.com later this month. He wants to raise up to $2 million by June 30.
“Our loyal customers not only love unique cinema experiences, they understand these movies are being seen in cinemas thanks to the crowdsourcing business model,” he said.
“We operate in seven countries and possess a global network of over 2,500 cinemas – enabling us to reach a potential audience of over 500 million. Our loyal customers (almost 100,000) are in many cases regular, repeat patrons.
“Demand.film offers independent films an opportunity to be seen in cinemas by crowdsourcing an audience. We fill up the empty seats on the quietest nights of the week with movies that appeal to distinct audiences.”
While there’s no shortage of online movie screening services, Doepel sees himself as a disrupter offering a cinematic alternative to Hollywood blockbusters and believes there’s financial potential in the event cinema screenings.
“The Event Cinema business has been reported as having generated gross box office of almost $500 million AUD in 2018 with a 6% annual growth rate,” he says.
“It’s a small fraction of the overall global box office, but it is growing at a rate faster than traditional cinema and shows no sign of slowing down.”
His business model involves a percentage of the box office receipts after paying the cinema, filmmakers and for delivery of the digital file, as well as a percentage of the ticket fee. In some cases, Demand.film negotiates additional rights for the films it represents, allowing screenings in non-theatrical venues, airlines and increasingly non-exclusive streaming rights.
Doepel said that while he has competitors, he’s the only one who can release a film simultaneously in seven countries all at once.
“Our expansion plans are relatively straightforward. We will add other countries and languages – our code base makes this a realistic scalable set of tasks – first in Europe and then in Asia and South America,” he said.
“We have cinemas and people on the ground already identified.”