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July 30 at 8:15am

How to Make Money in the Age of Abundance, Part 1

By Ted Hope

Part One: The Stuggles You Are Facing and How You Can Cope

By Jon Reiss

Since the collapse of the traditional distribution for filmmakers in 2007 we as a community have been struggling to figure out new solutions of how to monetize our work – in other words:  how to make money from our content and create a sustainable living.  In this two part series I will reformulate and address some of the problems we are facing – but also present some potential solutions for independent filmmakers.   These thoughts come from a creating a series of new presentations on Artistic Entrepreneurship over the past year that I presented at the recent SFFS A2E Workshop (http://www.sffs.org/Filmmaker360/A2E-Artist-to-Entrepreneur.aspx) and this spring’s IFP Filmmaker Labs (http://www.ifp.org/programs/labs/).   I welcome your comments!

While there were a number of factors that caused an upheaval of the distribution landscape in 2007 and while there have been many positive signs of improvement, filmmakers and all artists still face an enormously changed market for content.

Supply and Demand
Anyone with a smattering of economic knowledge understands that if you have surging supply and static or diminished demand, prices will drop.

As a content creator you are facing:

Supply
It is not just peer-to-peer sharing that is creating an infinite supply of product.

1. A Surge in Supply of Original Content Part 1 – Feature Films. As Ted Hope and Brian Newman have noted – estimates are that 50,000 new feature films enter the festival circuit every year looking for some form of distribution.

2. A Surge in Supply of Original Content Part 2 – Online Video Content. When I prepared this talk a year ago 236 YEARS of viewing content was being uploaded to YouTube EVERY MONTH. When I recalculated that figure for this years IFP Filmmaker Labs it is now 355 YEARS of content uploaded every month. Acknowledged, a lot of that is cat videos – but I hate to say that many people like cat videos more than independent film.

3. Everyone Can Watch Everything: Your potential customers, fans, audience do not only have all of the above content screaming for their time – they are very rapidly gaining the ability to watch everything piece of content ever produced in history: every book, every song, every film, everything.

4. Peer to Peer Sharing: Every piece of content can be shared infinitely at no cost. While the cost of digital replication is obviously less than physical production, replication of goods is only one factor of value. I think most filmmakers will agree with me that the entire cost of a piece of content should be factored into the “value” of a piece of content – e.g. the negative cost of the film. So while P2P is not the only cause of the supply glut, it does of course contribute.

Demand:

1. A static and potentially declining audience for independent film (and for all film). How relevant are previous forms of filmed media to new audiences: the feature film, the short film, the half hour and hour television show? How filmmakers can and should break free from these forms needs to be covered in another post. In addition, filmmakers need to go beyond an traditional film audience to find and cultivate their own unique audiences. I have written about this many times and won’t go into this any further at this time, however this series assumes that filmmakers are doing everything to cultivate and connect with those audiences.

2. Audiences are faced with many more entertainment choices than ever before – audiences are not as dependent on film, especially independent film for new ideas, new voices, and fresh content.

So when supply increases exponentially and demand is static or declining – price drops and films become difficult to monetize. This is one of the reasons that it will be difficult for digital revenue to replace other revenue streams even with universal broadband and global digital platforms/distribution systems.

Some ways to deal with this phenomenon:

1. Embrace Infinite Supply and Use it to Develop Audience. Again one of the ultimate defenses against increased supply is to create demand for your work through cultivating your audience. A number of filmmakers have given content away for free with the resulting affect of increased sales of scarce goods (discussed below). Nina Paley had great success with Sita Sings the Blues http://www.sitasingstheblues.com/ as documented by Sheri Candler http://www.shericandler.com/ in Selling Your Film Without Selling Your Soul (http://www.sellingyourfilm.com/) (in which Sheri also discusses other cases using this model).

A variation on the completely free model is to give a film away for a limited time to create awareness and promote other revenue streams as Mike Dion and Hunter Weeks did with a weekend long free YouTube stream of Ride the Divide (http://www.ridethedividemovie.com/) to promote their iTunes launch of the same film (documented in one of my chapters from Selling Your Film). Other examples of this abound.

A second variation is the reverse crowd funding model that Jamie King has created with VODO (www.vodo.net), in which content is offered to the peer-to-peer network pro-actively for free and people are encouraged to contribute to support the filmmakers.

2. Create Repeat Viewership Content One of the reason’s that Pioneer One (http://vodo.net/pioneerone) is the most successful program on VODO is because it is a series, and the audience is contributing to the continued support of the series.

The reason I believe that Netflix is turning towards series and away from movies is because they are ultimately similar to any other television or cable channel for years now have discovered that series provide audience retention that one-off films do not. Netflix is no different than any cable network. Films are a great way for a channel to fill empty pipelines upon launch – but it is series that bring people back to a channel. Series provide continuous engagement in stories and characters that one of films do not (ironically whether or not the series are viewed all in one sitting). This is also why I believe YouTube is investing in so many channels and seems intent on becoming an uber network. I recommend that any filmmaker download the free YouTube Partner Handbook – it is packed with helpful information.

Dickens had great luck with serialized content – which is how many of his novels (if not most) were initially released. He even received audience feedback – and incorporated that that feedback into shaping the story.

I’m not a Pollyanna as to how serialized content will monetize for filmmakers although a number of filmmakers have figured out how to make money doing this by either monetizing their own channels, creating original content for other channels, or creating original content for branded channels. A series still has to become very popular for it to directly monetize via ad revenue or reverse crowd funding. There are outliers leading the way – most notably Freddie Wong’s Video Game High School http://www.youtube.com/watch?v=1JqR3GVqib4 (who notably calls this a serialized feature). But there are filmmakers creating short regular content (not always serialized) who are not outliers, but are making a living at what they are doing – such as the folks at Zoochosis.com (www.zoochosis.com)

While I am an advocate for filmmakers to explore regularly delivered short form content, filmmakers are exploring other ways to contend with audiences increased desire for serialized content. Ed Burns http://www.edwardburns.net/ for instance connects with his audience on a regular basis via twitter – often providing video answers to their questions – as well as engaging them in the creation of his films. He has also ramped up production of his films so that they come out yearly – or almost annually. While this is not serial, it is more regular than most filmmaker’s production. I understand that film (and novel writing) is a process that takes time – but just as some writers are discovering the value of the digital short form it is also important for filmmakers. Tiffany Shlain (http://tiffanyshlain.com/) has extended her film Connected into her Cloud Filmmaking (http://letitripple.org/cloudfilmmaking/) project where she is producing more regular shorter content with help from the crowd. If filmmakers cannot increase the frequency of production, it is important for them to maintain some form of content connection with their audience whether it be social media based or other. Filmmakers who ignore this are then either faced with rebuilding their audiences whenever they produce a film – say every three years – or are at the mercy of selling their films to whatever buyers may want to take on the job of connecting their films to an audience.

3. Create Membership Those artists who have achieved a certain popularity can create memberships to either “fan clubs” or priority access to content. Some are borrowing the tech Fremium model where some content is available for free – other content is paid for. These memberships often do not give access only to digital content but scarce real experiences that I’ll discuss in more depth later in the series. I’m starting up my own version of this via the monthly conference call reward on my Kickstarter http://www.bombit2kickstarter.com page – so that I can have regular live contact with my audience. But unless there is a demand for the content – it is difficult to charge/create barriers to it.

4. Exclusive Digital Editions Crowdfunding has been very instructive in teaching filmmakers about merchandising and they have used this and other pre-sale campaigns to create exclusive digital editions of their work that are only available during their crowdfund or presale campaigns. I would recommend filmmakers consider exclusive digital editions during presales or crowdfund campaigns only available during that sales period. Because these are still digital products, I do feel that the effect won’t be as strong as other forms of scarcity – but it is a worthwhile tactic.

A caveat to the above can be witnessed with studio strategies to digital content. You may have noticed that films are available for sale a week or weeks before they are available for rent on transactional digital platforms (iTunes, Amazon, etc). The studios and digital platforms have discovered that few people re buying films to own digitally. So the ownership window has in essence become a premium rental window for people (like my daughter) who want the digital content before anyone else and are willing to pay extra for that privelege. (Ultra VOD being another version of this digital windowing). Aggregators who a year ago were advocating near day and date releases for transactional, SVOD, AVOD are now advocating again for a longer transactional window before subscription and ad supported revenue streams.

All of the above tactics will work to some extent to create revenue for filmmakers and help develop audiences (especially repeat content), but I feel it is important that filmmakers learn how to create scarce goods and and create price tiers to fully monetize their films and brand. The rest of this series will deal with various ways of creating scarce products such as through events/experiences and physical products.

I am currently running a Kickstarter campaign and you can see how I am utilizing scarcity, membership, and digital exclusivity to raise funds for my latest film, Bomb It 2, here: bombit2Kickstarter.com http://www.bombit2kickstarter.com  We have met our goal – but have added a stretch goal of $20K to help cover all of our expenses.   

Jon Reiss is filmmaker (Bomb It, Better Living Through Circuitry), author (Think Outside the Box Office) and media strategist who works with filmmakers, companies and organizations to help them utilize the most recent techniques of direct film distribution and audience engagement.


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  • daniel mcguire

    Stuggles?

  • http://outinthestreetfilms.com/ Out in the Street Films

    When you mentioned YouTube, I had a mini-epiphany (if that’s a valid concept). Here it is: Why do we bang our heads against the wall with indie film and all its conventions (such as festivals and distribution) when we could make tons of cash doing YouTube.Perhaps the world has moved on to digital platforms to leave use languish in it’s dust. Make 3 minute hits instead of 90 minute monsters that take two years to produce. It’s just a question.

    Look at this list of the top 25 YouTube stars starting with #1: Pewdiepie – $7 million (3.7b views): http://www.celebritynetworth.com/articles/celebrity/the-25-highest-earning-youtube-stars/

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