Airbnb for Movie Theaters: Has Crowdsourced Distribution Found Its Killer App?

Anime fans are showing up to theaters in droves, paying admission to watch a web series they can see online for free. But why?

For one, the popular futuristic fantasy series “RWBY” happens to inspire cosplay among enthusiastic viewers — and it’s just no fun to do that at home all by yourself.

Enter Tugg, an international distribution platform that lets people, content owners, and brands choose the films that play in their local theaters, schools and community venues.

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“It’s a marketing platform and a community-building platform,” Tugg co-founder Pablo Gonzalez told TheWrap. “It’s for a marketer looking for tools among a fanbase. It’s mainly film, but could also be music, web series and gaming. It’s a direct-to-consumer tool for filmmakers, studios, brands and marketers.”

As movie theater attendance sees annual declines and owners seek alternative revenue streams — including IMAX’s pursuit of arcade-style VR stations — Tugg aims to fill the gap. The Austin-based crowdsource distribution company, which Gonzalez has run with Nicolas Gonda, has been rolling out its platform since 2012 — mainly for cinephiles to tap into its enormous library of feature films to watch on the big screen.

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But over the last few months, Tugg has been working with the viral content makers at Rooster Teeth to bring the first three volumes of 3D animated series “RWBY” to the big screen — and to much success.

The company grossed nearly $300,000 in “RWBY” ticket sales and more than $35,000 in merchandise with events in the U.S., Canada, the U.K., Ireland, Australia and New Zealand.

The original anime-style franchise was created by Monty Oum and has been a viral hit since its July, 2013, launch, attracted loads of views on Rooster Teeth’s YouTube channel.

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Tugg tested its program with the 3D series as a prototype for how producers of digital content can lure audiences to theaters to create offline, communal experiences. Its rollout throughout the year of “RWBY’s” first three volumes came in advance of the fourth installment’s debut online, creating additional revenue from content that was already available for free.

Fans were essentially binge-watching their favorite online series in the movie theater.

“‘RWBY’ is the perfect example of how we’ve evolved,” said Gonzalez. “It’s a new monetization opportunity and builds a stronger relationship between content creator and fan.”

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Large events like those for “RWBY” and the faith-based Worship Night in America are staged via satellite distribution with the Digital Cinema Distribution Coalition (DCDC). Venues that aren’t compatible are shipped a hard drive containing content.

Gonzalez said Tugg is now sharply focused on building out more opportunities around the content spawned by MCNs (multichannel networks) like Rooster Teeth. MCNs encompass multiple YouTube channels and often offer assistance to each in areas such as product, programming, funding, cross-promotion, partner management, digital rights management, monetization, sales and audience development.

In other words, Tugg’s success with “RWBY” is just the beginning of a growing trend in which content creators build communities and connect their properties with like-minded moviegoers who are excited to come together to share their passions.

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Tugg makes money by splitting ticket sales with filmmakers and/or studios (who get 35 percent plus a flat fee) and event organizers. Theater owners are paid a flat fee for use of their locations.

The company facilitates these individually-curated events that showcase Tugg’s growing library of more than 1,800 studio and independent films, including Rooster Teeth’s enormously popular “Lazer Team,” along with “Touch the Wall,” “Poverty, Inc.,” “Unbranded,” “A Brave Heart: The Lizzie Velasquez Story” and “Paper Tigers.”

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Tugg’s partnerships with AMC Entertainment, Regal Cinemas, Marcus Theaters, Cinemark, Landmark Theatres, Alamo Drafthouse and Carmike Cinemas have helped it sell more than 800,000 tickets to more than 6,500 theatrical events since the platform’s launch at SXSW in 2012.

The company also has relationships with 20th Century Fox, Fox Searchlight, Sony, Warner Bros, Focus Features, Fullscreen Films and The Weinstein Company, which give it access to properties like the “Alien” movie series, “Young Frankenstein,” “Magic Mike,” “Moonstruck” and “Raging Bull.”

As online web series like “RWBY” continue to grow in popularity, so should Tugg — and that’s what its founders are banking on.