New Methods Of Distribution, Or Decimation?

The Internet is a sword that cuts both ways for content creators, be it filmmakers or other kinds of artists. While there is a lot of possibility in the medium, it has been notoriously difficult to turn a profit via online distribution. There are three main reasons for this:

a) Technical limitations: Long-form video is not very much fun to watch over the kinds of connections most people have. Because of this the average length of video that people will watch, according to many self-proclaimed web video experts, is about three minutes. One result of this situation is that three to five minutes has become the standard length for “webisodes”. Anything that is longer than that is considered to be “pushing the boundaries”. Listening to music over the Internet used to be too much traffic for the network to reliably deliver, so this situation probably won’t last forever, but when the technical limitations for smooth streaming feature-length content will be overcome is really not certain.

b) User experience: The user experience for online film viewing is not great. Not only the technical limitations, but the viewing UI and context. Embedded browser video is often displayed too small, and surrounded by distracting advertisements and other ancillary content. The different user improvements brought to online music listening that were delivered by iTunes and Pandora, respectively, need to happen for video. Recent web-embedded players that can go full screen are a start, but the content location and management services for video are quite lacking.

c) Pricing: Torrents and other tools of the theftosphere have created the expectation in far too many people that everyone in the world will give their work away for free (except, of course, when you ask avid torrenters to give you the fruits of their own labor for free). The fallacious argument that is used for bands (that the downloads should be free so the band can make money attracting people to pay for live shows) doesn’t even have a prayer of holding up when it comes to filmmaking.

What video content creators need to do is split the difference: give away free trailers and short films that will create goodwill (because you’re playing the “give us something for free” game) and if it’s good enough also drive viewers to your premium content. Then you need to deliver to the viewer paid content that is as good as or better than the stolen goods available online (and you may be surprised at how high that bar really is — some torrentable video actually looks better than commercially available DVDs).

photo by Sasira (http://www.flickr.com/photos/sasira/3983753349/)

So far the Internet has been a good publicity vehicle, but has not been a very good place to distribute work in order to make money to support yourself as filmmaker. But progress is being made.

(read more “below the fold”)

YouTube and Vimeo may be fine for giving away short videos and trying to get “hits”, but they are basically useless in terms of (directly) making money to support your filmmaking. But iTunes, Amazon, Netflix, Blockbuster, and GreenCine are all making strides in delivering video over the network in ways that both pleases customers and provides a revenue stream for the content owners. Right now, it’s nearly as hard for true Independents to get into most of these distribution streams as it is to get a deal with a standard low-end DVD distributor (iTunes is currently the easiest), or far too expensive in terms of the cut the distributor takes (Amazon).

The lower cost of basic infrastructure for distribution means that someone with a sufficiently sizable system to be a serious contender will eventually provide distribution at a reasonable cost to anyone who wants it — but “anything goes” is not quite what a serious filmmaker wants. Lack of editorial control leads to the kind of wilderness of content that is YouTube, where a deluge of crap can overwhelm good content. Brands will need to be built which are founded upon providing a filter for users, some happy middle ground between the permissiveness of iTunes and the restrictiveness of Blockbuster. Right now, who will pull this off is unclear, though my money is on one or more of Netflix, iTunes, and GreenCine (if the latter can overcome the technical and partnership hurdles and at all catch up with Netflix).

What is especially exciting about all the aforementioned services is their various partnerships to deliver legal video content to various set-top hardware devices. Right now that market also lacks standardization, and who survives as an Internet-based distributor may very well be related to what hardware partnerships they’ve created as some companies win and some lose the hardware wars. Hopefully, standards eventually emerge to weed out the various proprietary systems that thrive in order to attempt to lock in customers to one system.

But the distribution medium that most people think has the greatest potential for short-term profitability for content creators is on-demand cable. This hybrid between traditional cable and the two-way data communications provided by Internet protocols (though it could have been done direct dial as well, and some early attempts tried that) is already in place and accepted by customers. One problem with it is that the user interface and selection of content for many on-demand cable systems is not great (and timeouts that start countdown from purchase are antithetical to current viewing trends — users prefer a system that runs the timeout clock after the start of the first viewing so they can build a queue and watch it in whatever order they want).

The other problem is that getting into this distribution stream is still difficult. It is great for mid-to-large size distributors who already have relationships with the cable providers, but useless for true Indie and NoLo folks. Once the customer experience hurdles are smoothed-out, and if the cable companies open up on-demand slots to Indie and micro-budget distributors, this could be a very good way for films that aren’t able to snag a theatrical release slot to get seen and make money in a world where DVD sales have fallen off tremendously.

Even though DVD sales are slow, they’re not quite dead yet. And an Indie or NoLo entity has the luxury of printing small runs of DVDs as needed, an option which is too cumbersome within the pipeline of a large distribuor. And especially for films with very limited or no theatrical release, landing a rental exclusive deal with Netflix or Blockbuster is a particularly a good means of distribution since those companies will then do some promotion of your title to their customers.

And in a noble attempt to try to save theatrical exhibition for non-tentpole releases, an exciting possibility is being explored by a few start-up distributors, along side digital cinema projection system providers, to deliver on-demand movies to cinemas. The idea here is to allow theaters to continue to provide the big screen, big crowd theater experience but have a more varied slate of films available without the expense (to both distributor and exhibitor) of shipping and holding prints.

Indie-friendly distributors emerging in this “digital distribution to the exhibitor” sphere promote the idea that this helps smaller audience films find a bigger audience by making it easier for exhibitors to offer longer runs (perhaps with fewer days each week) that can allow these films to “platform” over several weeks or months rather than trying to force Indies to make an opening weekend splash that their marketing budgets usually can not support. This seems quite interesting and exciting to me, but it is a relatively untested approach (some but not most arthouse and second run theaters juggle schedules in this way already, even with prints). Like any new approach, it may take some getting used to (and may not survive the start-up period, though I personally hope it does).

Even though the world of distribution online is still a mixture of user-centric chaos and the usual dominance by deep-pocketed players, it is not to be overlooked considering how difficult it is to get theatrical distribution at this time. Other aspects of the Internet are not to be overlooked, either: fundraising, publicity, and merchandising potential.

On the fundraising front, great sites like Kickstarter are creating platforms for Independent artists to bring project pitches to the general Internet public. A number of projects have been funded through Kickstarter, though naturally the majority of these are very small budget productions — I’ve yet to hear of even a $50,000 film funded entirely via nontraditional means, never mind a $5millon one. But for your early micro-budget projects, things like Kickstarter can be great.

Merchandising opportunities run the gamut. At one end is producing your own materials through a place like PsPrint, Discmakers, CustomInk, etc. and selling them through your own website (using PayPal, Yahoo! Stores, or any other shopping cart and/or credit card processing provider). On the other is on-demand services like CafePress, Zazzle, Printfection, Spreadshirt, etc. The advantage of on-demand is the low up-front costs, though what percentage of the sales price you get to keep varies from place to place, and your profits on merch sold through these sites can be very poor — so research the options and choose carefully.

Online publicity is the subject of many books, and I’ll do a round-up review posting of those at some point, but some of the opportunities here are obvious: blogging, participating in forums relevant to your film’s subject and/or target audience, purchasing ads on relevant other sites, link exchanges with other sites relevant to your target audience, and mailing lists (opt-in only, please).

Though there is some doom and gloom looming when digital copies of the films you slogged away to create are floating around the Internet, there are actually plenty of people out there willing to pay for content (and to help the little guy) if you give them interesting content for a reasonable price that is easy for them to receive and play back in some format that looks good and works with the player they already have. And with the lower startup costs offered by some online merchandising options, and services like Kickstarter, you might even be able to partially subsidize your next project.