Thread

The following link is a page I set up to start a general discussion of best practices for a cost effective way for Filmmakers and Musicians to monetize and distribute their content.

I’ve been using Expression Engine for a couple years now and find there isn’t much I can’t get it to do for me. And that the community is great about support. Props EE.

I’m a filmmaker and a web developer. So, I felt like I was caught in the middle of the SOPA debate last month. Both of the feature films I produced where pirated before we recovered our expenses. So, I took this debate very personal. And what I have concluded is that the file sharing community and filmmaking community both had valid points.

After weeks of message board ranting, I decided to write up a solution rather than continue to complain about it. Or trying to educate the file sharing community that what they are doing is negatively effecting the film, music and app community. Many phone calls and emails later, I have a white paper of sorts. “The New Online Distribution Model.” Or “Paid once.”

It’s my attempt to find a middle ground between Hollywood and Silicon Valley. And what I’m hoping to get out of posting on this forum is real world advice on some issues that would pose problems for a large scale release of a major motion film. At the core of the model is the Expression Engine CMS. If this becomes a widely accepted model, it could mean a lot of business for EE developers.

http://upressplay.com/new_model/

I am also going to post what I have initially here. Not trying to poach traffic. But I will be updating the above as more data comes in. At the bottom, I have listed several questions that I would like this community to give their opinion on. Thanks in Advance.

Jones

Introduction
There has been much debate about the entertainment distribution model. And it would appear the general public has the desire for easily accessible content at a modest price. And have the release of the content, coincide with any theatrical release. The price level and accessibility depend on the budget level of the project. But, in this case let’s put our initial budget at $500,000.

From modest estimations, total labor on a production comes in around $250,000. Actor salaries and star power will make this number grow. This leaves a couple thousand left over for advertising and promotion.

Rather than looking for the traditional route, of expensive TV spots and billboard advertising, spend a modest budget on online advertising. Specifically Facebook. Using Facebook users selected interests. Example Films, Movies, Action. Kung Fu. Along with movies they have liked, that are similar in nature to the project. Coinciding with campaigns on genre specific blogs and websites catering to those genres.

The goal should be to provide the project in as many ways as possible. Netflix, CinemaNow, Amazon, DirectTV onDemand and iTunes. At an inflated rate. Along with providing a more cost effective alternative on your website. There is an effective way of monetizing a distribution process, eliminating the middle men in the process almost completely. Focusing all traffic towards your own website, taking payments via Pay Pal.

Site
The site will be constructed with html5, insuring compatibility with all smart phone, tablets and desktop devices. Entertainment sites will normally have an about, cast, crew, video, gallery, blog and downloads sections.

Content Management System (CMS)
Utilizing Expression Engine, a php based admin tool will be installed to a web server. This provides a web based interface that can be maintained by someone with very little web skills. Tech notes will be provided to assist in administration.

Monetizing Content
The CMS has integration modules with Pay Pal. It allows you to create product and membership related items, take payment, report back to the web site and confirm payment. Providing rapid access to the content they purchased.

Streaming
Ideally you would want to use a streaming server for all content. This won’t stop people from recording their screen, but won’t give instant access to the main video file. Reducing piracy efforts. There are streaming services out there, but they look to be a little expensive. Budget would determine this option. You can also utilize a progressive download file, from a standard web server. This is more cost effective and easiest to set up. But, it reveals the video file which could be downloaded, and distributed to the online piracy outlets.

The New Model
Under the theory of accessibility and cost effectiveness, revealing a downloadable file shouldn’t be of concern. Because the system provides a better delivery service than a file sharing system, at an affordable price. Forever, theoretically.

Paid Once
There are many who will argue that they paid for a pirated item already, seeing it in the theater or buying a VHS copy back in 1994. Fair enough. During the theatrical run, when you buy a ticket, you get an activation code for the streaming version. Leading to a future $5 sale for the HD version and extra content. And more importantly, actively including a user into the universe of your project. With newsletter and blog options for continued communication with them. Ripe for cross promotion for other vehicles. And going back to the theater, the user already spent $10 to see it. With potential for future sales.

Downloads
This is a comfort level issue. You can set a higher price for the HD version of the file, that users can keep. But, this increases the likelihood of online piracy. On the flip side, you could charge a higher price and look for returns on initial purchase. Rather than be concerned with the effect of a long term file sharing issue, reducing 1st purchase sales from other users.

Videos
Utilizing m4v and mp4 file formatting, Quicktime for iTunes will result in the broadest device compat- ibility. iPhones, Androids, iPads, any Tablets or Desktops.

Members
A Member Admin is built into the CMS, and the levels of content accessibility will be based on their member level. See Pricing. This could also grant them access to behind the scenes content. Including games and apps as part of membership features. Items users cannot purchase or view on other media networks. Value added content contained in the productions realm of influence. I.e. No Middle Men. Driving traffic to your site, a centralized location for the project. Along with instant options, globally through the site, pointing to the project on the other media networks.

Blog
The CMS also provides a blog. Interacting with your audience is very important. Providing a blog to all members, to collect feedback and communicate with your audience about film festivals, releases, updates, etc. Membership features will allow Members to comment on blogs, videos, and photos. With a large array of share options for social networks.

Heavy Traffic
If the project takes off, and is garnering millions of users simultaneously, it may require an upgrade in service. Especially for the streaming video files. Having a streaming service selected prior to launch would be a good back up plan.

Release Date?
I don’t think you want to spoil a festival run, about a year. Maybe 6 months in, with a couple festival selections and/or wins, some quotes, release it on the site. Launch an online ad campaign. Most festivals will have already committed. And you can make some money on the tail end of the festival run. Play it off, we are not a big studio, help us get the word out, etc. Keep pestering movie blogs to do a write up. Interviews. More banner ads. I would imagine cable, theaters and TV will still want a popular title. With real stats for online performance. Doesn’t that make the better case for getting your film distributed in the major film markets? Or at that point, who cares. Hopefully the buzz will garner 500,000 people to buy the movie once, for a dollar. In a market of billions, only 500,000, once. Not counting the returns on other media networks or markets.

Pricing
$10 iTunes Download

$2 iTunes Rental

$5 onDemand

$2 Amazon, CinemaNow Streaming

$1 Website Streaming

$5 All Access - Website Download, Streaming and Special Content

Expenses
Website
$300 Expression Engine License

$100 Expression Engine Plugins

$200 Web Hosting 2 Years

$50 Domain Name Registration

$650 Up front Expenses

Design and Promotion
Web Site, Poster and Banner Ads.

$2000 Design

$2000 Production

$1000 Admin

$1000 QA

$6000 Design and Production*

$6650 Total Production Cost

Advertising
$18,000 Facebook
$2,000 Blogs and Websites

$26,650 Estimated Self Distribution Model Initial Expenses

*Pricing is based on median freelance rates. Agency rates have been estimated at around $50,000 for full service design and development.

Post Launch
Initial returns on online purchases will be paid to Total Production Cost. There after to the production company alone, with the potential of a maintenance and update fees for continued work on the site through out the life cycle of the project. Re-investment for initial returns into continued online advertising, for 6-12 months, is advisable. Depending on budget needs, revenue distribution could be negotiated in the statement of work. Covering initial production costs on the campaign, in good faith for a percentage of earning over the first 2 years of the project. Up front money for design and production, and no percentage. Terms could be negotiable.

Internet Rights
Maintaining internet rights for a project is key to long term returns. This shouldn’t stop any other distribution efforts in foreign, theatrical or TV. Which from most accounts, doesn’t really garner enough of a pay out to cover the initial costs of production. This isn’t always the case, but it’s becoming much easier to reach a mass audience without binding yourself to traditional contractual agreements. Over time, maximizing your long term returns and control of the project.

onDemand and Theatrical
Theater owners rejected the plan for Tower Heist to release in both Theatrical and onDemand. Many users do not desire, or cannot go to the theater, but still want to see a new release. Tower Heist’s $50 price point is way to high. $20 would work better for the public. Normally, it’s you and your girlfriend. 2 people, $10 a person. Looking for a reason to make out. Not a group of 100, just seeing it for free. Or it’s a married couple with a baby, who can’t go to the theater. Who normally pirate movies? A normal business dude, because he can’t leave the house for a movie. Sammy’s sick again. Those are missed sales, that would justify an inflated rate of $20. Movies in the budget of this model would do well to keep onDemand around $3-$5.

Conclusion
This model would grant studios greater control of their titles, over the long term. Making them essentially their own Netflix or iTunes. With huge advertising benefits from collecting user data, integrated with social networks.

As for overall revenue performance in the context of a big studio. Out of billions of internet users, Lets say everyone wanted a copy. 1 billion people pay $1. That’s $1 billion dollars. Made your money back, and some. Granted, the US market is only 300 million. For larger productions, that average $1 goes up to probably $5 or $10. $10 x 1 billion users… You can argue the numbers and age groups, etc. But still the math adds up. A lot of money. It’s making a switch of mind set. Not the initial value, but what a mass consumption can really do to the bottom line. Where you can get everyone to pay a little, not just small groups of users to pay more. What’s that saying about the Father Bull says to the Son Bull…

With current technology, there is a cost effective way to monetize an entertainment project, outside of traditional distribution channels, reduce costs, reduce piracy, make it’s money back and continue to have long term revenue. Louis C.K. and Kevin Smith have both successfully used this model.

Questions
Cost effective streaming service?

Cost effective hosting service?

Pitfalls of Expression Engine in regards to mass daily traffic?

CDN options for site hosting?

Potential solution for encrypting or hiding the url for a progressive download file?

Is it necessary to stream the video?

Performance data for streaming on Netflix? Traffic and revenue return.

Best Hosting performance for Expression Engine CMS?

So, I was trying to set up a way for Members of the site to have multiple memberships, granting them access to different content. I have not found a way to do it with Simple Commerce and the Member Management module. But, I found EEmember.

http://www.eesuite.com/products/eemember

It’s $75, a little steep. There is one negative revue on Devot:ee.

http://devot-ee.com/add-ons/eemember

Any one use this before? Or know of away to allow Members to have multiple memberships in the built in EE Membership module?

Nice thoughts and project idea!

Here’s a few things to think of.

1. Hosting - I find using a quality VPS to be ideal. Most companies that offer a VPS are actually offering you junk, so just be careful. I’d recommend Linode.com.

2. Member management - Have you thought about doing the member management using a channel? Also, check out these addons:
http://devot-ee.com/add-ons/user
http://devot-ee.com/add-ons/freemember

Thank you for the suggestions Paul. Question, how would you attach the channel entry to a Member Profile? That would probably work the best, giving me the greatest control. I didn’t see any options.

And Continuing the Discussion:
The following link is to a great article discussing many of the issues in my New Model article. One conclusion I’ve made during my discovery, Digital Rights Management (DRM) on iTunes movies you supposedly “own” will not allow you to play it on multiple devices. A real argument on the side of the Pirates. Which is stupid, because I can convert it with $40 software. Why have it in the first place? And at a price of $18, for a 25 year old movie? That’s ridiculous. Score 2 for the Pirates. The more I read and test, the more I go back to Expression Engine Memberships.

http://www.huffingtonpost.com/2012/02/18/online-piracy-youth_n_1286911.html

Perhaps along the lines of the User module:
“Easily display other features in a users profile page such as their recent weblog entries, photos, comments, favorites, and more!”

Why not get in touch with Solspace for suggestions on their module might be used to do what you need.

Yeah, Big Media just keep shooting themselves in the foot!