Tuesday, September 28, 2010

Making a Business Plan Part 7 - VOD Technology

So we just have to increase the amount of money we make for each picture. Because we have to increase the amount of money we spend on each picture in paying people. And other things. The only way we can increase how much we SPEND however, is to increase how much we get PAID. We have to make more revenue per picture. Have to. Must. Do.

If we were able to bring in $35,000 on each movie we might be able to (egads!) actually pay people. Ha! No, of course we wouldn't do that. But we would have a little soundstage in Jersey City where we could keep our sets built. At least for the duration of a particular movie's shoot.

The real number is somewhere around $100,000. If we could bring in $100K per picture we'd be able to have an actual editor assigned to each picture. We'd be able to pay minimum-wage salaries. Cigars and hottubs. If we were doing 3 pictures a year like that we'd have what we might laughingly call "good times and financial security". If we did 10 pictures a year we'd gross a million a year.

None of those things are likely to happen any time soon. So let's figure out what we can do realistically.

The big trick is to increase our North American distribution money.

Now the big ol' Interwebs was supposed to do that for us, but that doesn't seem to have panned out for indy filmmakers (or really anybody other than Joss Whedon, and there really only the one time for him.) The other thing which was supposed to change the game (er, like 12 years ago) was Video On Demand. VOD exists, but the numbers I'm hearing are that you're lucky to get like $2400 a year with VOD.

The other option is cable TV. [But NOT in this post.]

So we'll look at cable TV and VOD (which is also "cable TV" but let's not get confused between the two of them.) But we'll look at cable TV (SyFy) in a future post. Just remember that.

Now, I heard of what I actually thing is a good idea for VOD. That is that there are ads you can buy on cable TV which have a bit of text above and/or below which say "for more information, press 'select' (or whatever) now."

So you have a trailer or a commercial for your movie, and all someone who's bored watching "Manoctapus" or whatever's on TV has to do is: press one button to see your movie.

This requires three things:

  1. Having a decent trailer for your movie.
  2. Getting your movie onto the VOD of the cable companies.
  3. Having a cable company which has that service where the remote can select stuff depending on the commercial which is running.
  1. Now the first of these things we manage to get by not cutting our own trailer. By and large the filmmaker makes a terrible trailer editor. The purpose of the trailer is to sell the damn picture*, not "show some pretty images and not tell anybody what the plot is" (which is what filmmakers typically do when they cut their own trailers). Now, sometimes we have to cut a special version of a trailer -- but we wait 'till a professional trailer - house (which cuts trailers for movies that get sold for big bucks) cuts the first version.
  2. Getting onto cable VOD. Hoo - boy. Well there you're just arguing with them all day long as far as I can figure. Maybe, just maybe, if you tell them you're spending a few thousand dollars on ads with them it'll help. Nobody knows. 
  3. But the third one is the kicker. I believe that out of the six big cable companies only TWO of them have this technology. Aargh.


OK, so can you actually make any money putting ads on cable TV to direct viewers to your movie which is running on that cable system's VOD? Well, I heard an anecdote about an unsubstantiated rumor that once a non-pornographic film made $38,000 gross doing that. Yeah, I know. But that's the best intelligence we've got right now.

Note that cable TV ads are not terribly expensive. A few thousand dollars gets you a couple hundred of 'em. So as an experiment, this is certainly worth trying. Because even if we end up splitting some $30,000 extra bucks with a distributor well... at least there's something to split.

By the way "Why don't the major studios do this?" That's the question you're asking, right? The answer is, they do.


*Interestingly, there are typically two kinds of trailers for movies: the ones aimed at buyers, and the ones aimed at the general public. By putting commercials on Cable TV you're actually aiming at the consumers.


DAVID FREY said...

I use my parents to gauge the effectiveness of a trailer. If we had cable at home, they are the type of people that would rent VOD all the time, so if they dig the trailer, I figure I'm heading in the right direction.
Do you have any trailers cut by a trailer house that weren't meant for Canes, because I'd be interested in seeing them.

Andrew Bellware said...

I figure even MY parents could figure out the VOD services on their box if it was as simple as "press here" during the commercial.

No, I don't have any specific direct-to-consumer trailers for any of our pictures. Although many of our trailers really could be used for both buyers/distributors AND actual consumers.

DAVID FREY said...

I tend to agree. If I were a distributor/buyer, I would screen trailers based on what would sell to the consumer, which implies that the trailer/presentation of movie would appeal to the end consumer.

I'm not sure if that made any sense, but I think you know what I mean Drew.

Andrew Bellware said...

I don't think that's really the way the system works. But with the majority of our trailers it just works out that they can be used for both buyers and consumers.

The reality is that a (say) German distributor, who presumably knows his market, will look at the trailer you make and say "Can I sell this picture to my customers?" The buyer's customers aren't even the consumers -- they're the video stores which would carry the movie. But those guys have very specific needs (like "monsters" or "swordfights" or "explosions" or whatever.)

So there's still some distance there and different agendas working. But I think there's a fair amount of crossover...

DAVID FREY said...

I'd imagine there are crossovers. I would think a compelling trailer to a distributor would have some key elements that were compelling to the consumer, and again compelling to the end comsumer (mom and dad).
I could be wrong though.

Andrew Bellware said...

Yes, the issue is simply that they have different agendas. A buyer's agenda might be "I need an erotic thriller with action elements to fill a hole in our schedule on June 22nd." Because they know that with the right artwork they'll get x number of rentals with a title like that.
So they're not thinking about whether they'd rent the movie themselves, they're just thinking if they can market the picture in such a way they can rent it.
It's just a difference in focus.