Getting Traction in Internet Distribution

Series: The Market

Climbing out of the bargain basement

Internet distribution on the major movie supermarket and subscription sites has given Independent filmmakers a short window of opportunity. There is no guarantee that they will continue picking up Independent movies. But for now, each can fight for their place in the market. But it's the same battle Independents had with DVD releases.

Everyone remembers two years ago the DVD bargain bins that you could sort through in the supermarkets - $1.00 movies that no one was buying and there was no profit in. They were old movies, low quality movies, nothing a discriminating audience would want. In essence this is what we have today with supermarket and subscription sites. Sounds great - your rep can get you on Vudu®. Sure, they will all take your movie. Can any viewers find it? How do you rise to market viability when you live in a giant bin of movies where no one can find your movie and mostly no one wants to see it?

It isn't a market problem

If you made a movie that potentially would have a good audience, then the market is not the problem. Two movies grossed over $1 Billion at the box office in 2010. Every market indicator says that the market is hungry for new movies and will pay to see them, and in my research this is consistent across most age demographics.

There were over 15 million US Internet searches last month for new movies. That doesn't even begin to count the people who went to a gaggle of movie finders like Moviefone®, or MOVIEWEB®, or Fandango℠, or Movies.com®, or to their favorite movie download/streaming Web site, now totaling 9 US major supermarket sites, to search for what's new. (These will eventually settle out to around 3, plus a couple of niche market sites, that will be a lot more discriminating about the movies they take.)

If you made a good movie that people would want to see, there is a substantial and exciting market for it.

Next page: It's a visibility, overhead, and competitive problem

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It's a visibility, overhead, and competitive problem

It's a visibility problem

Getting your movie noticed is not about bucking a plot by the big merchants to keep little people down - they really want movies that sell. The problem is the natural order of things. The "noise" in the consumer marketplace is overwhelming. People have so many advertisements and bids for their attention thrown at them, it is very difficult to get their attention. The biggest problem is the sheer number of new releases.

There were 615 US movies released in 2010, according to Way Too Indie. That's around 12 a week. The Numbers puts the total at 886 (17 per week). In 2007, 12,000 DVDs were released, flooding the market. Every year, these DVDs are now going to the supermarket and subscription Web sites. These new movies, DVD releases, and years of older movies, are all fighting for viewer's attention in the marketplace.

People don't watch a lot of movies, and when they do, most of them want high quality entertainment. The average theater movie goer ventures out around twice a month. In general (discounting teen TV VOD), people tend to stream one or two new and old movies once a week, and the ones they choose are more likely the movies that get their attention.

Hollywood is very good at getting people's attention, even if the movie deserves to die. Guess who gets their movies watched. Not you. You're not visible. People can't see you because of the overwhelming number of choices and the lack of your attention getting activity.

It's an overhead problem

Who is going to get attention for you? The supermarket and subscription Web sites will feature those movies that are in high demand. Supermarket sites make their money selling views - high demand. Subscription sites make their money by offering a flood of choices. Neither one gets you noticed. Can they advertise you? Nope. It doesn't make economic sense for them to do advertising for their movie catalog - there are way too many movies and they won't make enough profit.

Here's the thing with big companies. They make their money on volume. Corporate overhead is usually equal to the operational costs of the business, and that only leaves around 8% corporate profit, and they can't squeeze out more money because they are in a very competive price sensitive market. There is no room in that mix for advertising a flood of specific movies, and if they did flood the market with advertising, you would have the same problem of too much noise thrown at potential customers.

It's a competitive problem

Netflix®, Hulu®, YouTube, and AOL®, have all announced plans to offer original content. Who will this compete with? Your content. Who will they feature? Their own content.

Next page: The value of Internet distribution

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The value of Internet distribution

The theater marketplace had a limited number of screens, so a movie had to have a guaranteed audience number to get on the screen. Either the movie had to have a wide audience, or had to be highly promoted by the distributor, and most likley had to be made by a known producer and director who had a reputation of filling seats. It was a frustratingly limited market.

DVDs opened up opportunities, but most movies simply couldn't achieve market viability. Internet distribution has also opened up opportunities. There are even fewer obstacles to distribution. Getting distributed is now the easy part. But market dynamics have changed very little. Quality and visibility get movies seen.

Market Analysis

In 2001 I did extensive research on the potential for movie distribution on the Internet, and on the development of technology for distribution. It was obvious from my research that this was the future of movie distribution. It's happening and it's accellerating. Netflix began streaming in 2007, and it was so successful that by 2011 they changed their business model to streaming, separating out DVD distribution. Netflix now often uses up to 80% of Internet bandwidth.

In late 2010, I again analyzed the market. This time I could see that the movie market would divide into segments, and in 2007 I wrote The New Movie Distribution Paradigm. We are mostly there already and 2011 isn't even over. The part that hasn't appeared yet is the Premium First Release in the Internet Venue. Emphasis is on Premium.

Apparently those producers not afraid of Internet distribution, ill-advised, have excitedly rushed to the supermarkets and subscription sites, where the entry barrier is low, thinking that they are going to earn money. My market analysis today is that producers unfortunately are about to miss the boat, swimming in the wrong channel.

To be profitable, producers and distributors with high quality movies need to advertise. There is a lot to be said for being on Independent Web sites with high visibility, rather than being buried on supermarket and subscription sites.

FlixStreamer.com

FlixStreamer.com was started to release Movie Stream Productions premium titles, mostly movie franchises (movie series). These will be advertised movies. The business model has been optimized for exactly this. We decided it wouldn't hurt us, and would help everyone, to open distribution up to other premium movie producers, particularly franchises. The emphasis is on top quality story and production for Home Theater streaming viewing. We are particularly interested in movies that are franchise opportunities, meaning that they will be a regularly recurring series.

Producers who elect to distribute on FlixStreamer, if their movie qualifies, will get their movies featured, and potentially advertised. We do our homework. Movies are tested before an audience to see what kind of market potential they have. We don't "buy" movies, or retain distribution rights for over a year, and we don't offer distribution to everyone - just the ones the audience selects. It's an 80/20 deal with no hidden costs. It can't get more fair than that.

What does it take to make it on FlixStreamer? A producer with a market focus, doing what he loves - making good movies. Other articles on the MSP Insider hint at how to do that. These are generally movies that cost below $300,000.00 to make.

Have you produced a good independent movie or short (at the quality that would be shown in theaters)? Get more attention for your shorts on FlixStreamer.com. Rent your movie on FlixStreamer.com for more profit.

- Dorian

Trademarks

  • AOL® is a Registered Trademark of AOL Inc.
  • Amazon.com® is a Registered Trademark of Amazon.com, Inc.
  • NETFLIX® is a Registered Trademark of NETFLIX®, INC.
  • BLOCKBUSTER® is Registered Trademark of Blockbuster L.L.C.
  • CINEMANOW™ is a trademark of BBY Solutions, Inc.
  • Fandango℠ is a proprietary service mark of Fandango, Inc.
  • HULU® is Registered Trademark of HULU®, LLC.
  • Moviefone® and Moviefone.com® are Registered Service Marks of AOL Inc.
  • MOVIES.COM® is a Registered Trademark of Fandango, Inc.
  • MOVIEWEB® is a Registered Service Mark of MovieWeb, Inc.
  • Sony™ is a Trademark of Sony Corporation
  • The Numbers Web site is owned and operated by Nash Information Services, LLC.
  • YouTube is used in trademark names of Google Inc., such as YouTube Direct™
  • VUDU™ is a trademark of VUDU, Inc., a Wal-Mart Stores, Inc. company
  • Way Too Indie (unknown)

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