What Indie Filmmakers Need to Know in 2013 About VOD Deals (Including Netflix, iTunes, Distribber, Amazon Instant, Hulu, Distrify, Apps and Cable): Sheri Candler's Google+ Group Provides Real Numbers
On March 15th, 2013, filmmaker Douglas Horn published a blogpost about the major Video On Demand ("VOD") options indie filmmakers have in 2013.
VOD is (of course) crucial to indie filmmakers because, as Douglas Horn succinctly puts it: "if you have an independent film without stars then as far as mainstream distributors are concerned, DVDs are dead."
And here is why many (although not all, see Mike Dion's story below) indie filmmakers agree that DVD's are dead: "VOD — whether it be via iTunes, online, or your cable system — is the future of home video... [W]hy make DVDs of your independent film or series to sell through snail mail when you can sell a link to a downloadable file instead? You can save the postage, fulfillment costs, inventory, and time. And your customers can watch it right away and on whatever device they wish to."
If DVDs are not (for most indie filmmakers) the road to riches - in 2013 it has become critically important to evaluate the opportunities presented by all the VOD platforms that you (the indie filmmaker) can use to distribute your film.
But how to choose the right VOD service for your film - and is there a particular windowing (e.g., release schedule) that seems to maximize revenue?
Indie filmmakers who've no experience with releasing their films through VOD can learn a lot about the features of the major VOD services by reading Douglas Horn's blogpost. But Mr. Horn's post doesn't provide numbers (e.g., how much an indie filmmaker can expect to make from a particular service) and Mr. Horn also doesn't provide much guidance about whether you should release first on one service and then another...
That's where the Google+ conversation that Sheri Candler moderated in response to Mr. Horn's post comes in... In late March 2013 Sheri Candler encouraged her Google+ circle of indie filmmakers to share their own experiences. The comments about actual revenue and real-life experience (e.g., with windowing the release of indie films) should be really helpful - and eye-opening - for newbies and experienced indie filmmakers alike.
For example, Mike Dion chose Sheri Candler's Google+ conversation to share the following about the release schedule and the numbers his film Ride the Divide was able to earn on Netflix: "We waited 1.5 years to release Ride the Divide on Netflix. 1 year deal was 4 figures. We felt it was worth waiting that long because our DVD & merch sales were doing very well from our webstore. We noticed a nice bump in recognition and sales once we hit Netflix because we opened up to an audience who would have never knew about the film otherwise. Netflix just licensed Ride the Divide for 2 more years for 5 figures. Our new films are seeing 5 figure Netflix offers for 2 years."
So, Mike Dion waited to offer his film on Netflix - while he was making money on his own webstore from DVD and merchandise sales - and then, when he released on Netflix (pocketing an advance of under $10,000 US), he noticed an increase of action on his webstore - almost like Netflix was a form of marketing renewing interest in his film that helped him to sell more merchandise...
This kind of information is critical for microbudget filmmakers.
Isn't it obvious that the budgets and financing strategies for your truly indie films should reflect the real values that films have in the marketplace?
My point? Your expectations should be realistic: Knowing that Netflix initially gave Mike Dion under $10,000 US for a one year license should temper your own expectations. It's good news that his advance has gone up for Ride the Divide and his subsequent films. But knowing that Netflix is advancing only tens of thousands of dollars for films with a very solid track record should be a big part of your financial planning. (According to Sheri Candler, writing in the same thread, some very rare films can get advances of more than a hundred thousand US dollars from Netflix - but that much has been paid only for special films with stars or significant festival heat.)
Also notice that Mike Dion's webstore sold more physical merchandise (the kind of stuff that true fans want to own - and that can't be copied as easily as a digital file - with 100% of the profits for that physical merchandise going to the filmmakers) after he made a modest deal with Netflix.
This too - the role of Netflix in marketing your merch - should also be something you understand and prepare for.
Finally, I also am fascinated by the discussion of the retail pricing for VOD that is part of Sheri's Google+ conversation.
I would love to see more data about the impact of retail price on sales volume. For example, would reducing the retail prices for truly indie films lure in more online buyers (the people who might spend 99 cents to sample an unknown film, but who would never risk $19.99 or even $9.99 for that same film)?
That's the very intriguing point that Kris Hulbert makes in Sheri Candler's Google+ conversation when he writes: "I bet my life if you make a high quality horror film (5 mil budget with real names) and you released it for 99 cent views that you would easily turn a profit. As long as it was a solid film. That is the model the indie industry should be shooting for. Universal prices are designed to screw the indie. If youre spending 9.99 on a film are you going to go with the big budget known commodity or gamble with a totally unknown product. You want people to gamble on your movie it should be cheaper. Of course there is also the issue that many people are sheep if the price is to low they think it must stink, opposed to someone just not trying to rip them off for once."
Personally, (unlike Kris Hulbert) I wouldn't bet my life that selling a $5 million film for 99 cents US (per download or stream?) "would easily turn a profit" today. I think getting millions of people to pay even a dollar for a movie might be tough (without millions of dollars of publicity - like the kind of attention Louis CK's Beacon Concert received). My best guess? When people are already paying a monthly subscription to Netflix, getting them to open their wallets again to pay for an online pay-per-view of a $5 million movie might be tough. They have thousands of other "free" choices - why should they buy your film Kris?