The New Online Distribution Model

Over the past couple months, the online piracy debate raged amongst my fellow developers and filmmakers. And in a response to the issues posed on both sides of the argument I began a break down of what it would take to monetize and distribute a movie or television show, at a price point that would discourage piracy and cover production expenses.

The following link is to my white paper entitled, “The New Online Distribution Model."

http://upressplay.com/new_model/

I’m hitting a bunch of tech and filmmaking message boards with this concept. 1. To get public opinion on the model. 2. Establish technical and financial issues that would be an obstacle to a wide spread use of this system.

In the document I list the combined technologies you would need to make this happen. Along with forums to find professionals that could be added to your production team.

Please take a look. All comments are encouraged.

I think the whole streaming thing is a waste of time/effort. It's not difficult to capture and download a stream, and it only takes one person to do so before the movie is available as a torrent. It limits the quality to what a viewer's connection can handle in real time, and it costs you money in bandwith costs every time someone watches the movie again. Keep it simple, just offer a copy for instant download once someone's paid.

I also think the numbers at the end are pretty useless for any kind of estimate in this scenario. Very very few, if any, projects will interest an audience of 300-1 billion. In 2010 the number of tickets sold in north america was just over 1.2 billion for all movies released theatrically that year, with about 200 million total theatergoers. I'd guess those numbers skew very heavily towards the top 20-30 or so films released that year, all of which spent millions of dollars on mainstream media promotion. There's simply no way you'll reach that large an audience with a ~$25k social media advertising budget. To me that calls into question the original budget numbers too, as I expect it will be difficult to recoup $500k with such a small marketing budget.

Overall I think it's a good start to the analysis, and you're going in the right direction with the approach. On the tech side I'd say hosting should be on amazon's web services, paying only for the bandwidth used and leveraging their infrastructure so you know it can scale if a movie becomes popular. If you still want to do streaming it's simple to do so with their service, and you could even offer your own torrents with them to cut down on bandwidth costs if it really took off. They have some facility for limiting access to downloads as well, so it shouldn't be difficult to make it so that the link isn't useable except through your website where someone has to be logged in. I should qualify that when I say it's 'simple' to do all this with their services I'm speaking from the standpoint of a web developer - I don' t think the average filmmaker could do it themselves, but someone like me could easily make a tool to enable it for non-developers.

I'd also say there's a lot of enhanced content that could be added to a film using something like popcorn.js, content that would only be available if they were playing the film through your website. It might give an incentive to people who have already downloaded the movie illegally to come pay a couple bucks for access to the site.

Agreed on the Streaming. I was thinking just a progressive download file, contained in a flash player for desktop. And just a m4v file on tablets and smart phones. The only thing that makes Streaming a good option. Skipping to parts of the movie. I find myself stopping a Netflix stream, and continuing later on. Granted, I would rather have a high quality file. And would wait the 20 minutes for it to be ready. Budget constraints would lean towards a Progressive Download file. And under the theory of accessibility, this shouldn't be a concern.

One of the big concerns with the article is the advertising budget. More is always better. And within the model there is wiggle room with the $500,000 initial budget. Considering that base labor and production costs are around $250,000. So, the listed $25,000 can go up.

One of my goals for the paper is to flush out better details in the online advertising sections. I've built many banner campaigns, but have never really planned the budgets and placement. Realistic numbers for that section would help. I maybe should consult with DoubleClick or Pointroll.

Admittedly, 1 Billion people is a stretch. I used that mostly to illustrate my point. What do you think is a more realistic number? Let's say for a Horror movie. Hatchet 1. How many people do you think watched that film? Netflix has yet to respond to my inquiries. I was hoping to get some realistic performance numbers from them.

I've never heard of Popcorn before. Good call. This has a lot of potential. I'm going to demo this out. I will report with results. Thank you for your input.

I agree that there could be advantages to offering streaming, just not using it as a restriction to prevent illegal distribution. You can enable streaming for files hosted on amazon web services through their cloudfront service for only slightly higher bandwidth costs (pennies per GB), so it's easy enough to offer the same file from their servers for direct download, torrenting, or streaming. In fact if you were going to offer popcorn-enhanced content I think you'd have to offer streaming so viewers could jump around to the parts they're most interested in.

Market numbers are hard to estimate. Looking at Hatchet, Box Office Mojo shows it making just over $5 million in rentals in it's first four weeks of release before dropping off the charts. Optimistically I'll figure it doubled that over time, so $10 million. What's the average rental cost, $3-5 maybe? So that tells you it got probably got rented by 2-3 million people. That's probably reasonable for a small film with a limited theatrical release and some level of mainstream promotion.

I'm guessing using social media you'll have a hard time getting even a million buys. If you think in terms of typical click through rates for broad marketing campaigns you're looking at anywhere from 0.5-3%. So to get a million clicks to your site you'll probably need to reach 50-100 million people. By limiting your marketing to very targeted advertising you can increase the click through, but you also decrease the total number of people you reach. And then you need to convert those clicks to sales... so that's another small percentage of an already small percentage. So I don't think it's unreasonable to say you'll have to reach 100 million people or more just to get a few hundred thousand sales. That's a tough hill to climb with a limited budget and limited advertising experience.

Wow.
WTH happened?

Anyways...

upressplay said:

Question: Would you consider this thread as Advertising and Promotion? I consider the above link as a white paper, open to the filmmaking community as a legitimate discussion. I'm advertising nothing, other than a free concept. The indieTalk Admin flagged this and pushed it all the way down in the classifieds? What gives with this "infraction?"

Click to expand...

Since pretty much everyone enters this forum straight to the indietalk.com page, where everything is listed from most recent forty-fifty comments, the issue is moot in practical terms.

The regulars here are going to see it.
Occasional users might miss it.
Drive-bys don't matter.

It's a filing issue.

You could post it under 'Chicken & Dumplins' and just as many people would read it.

No worries.


(And FWIW, it's probably because your site promotes the films on the 'Productions' front page, like "The Art of Pain" and "Farewell Darkness", that qualify your link to your site as a promotion of your site.

I imagine a sensible workaround would be to copy and paste the information from your 'New Distribution Model' page to a google docs page - where no advertising exists - then people could discuss the issue/model as you have demonstrated a valid interest in doing - with no conflicts of interest.)

rayw said:

Wow.
WTH happened?

Anyways...


Since pretty much everyone enters this forum straight to the indietalk.com page, where everything is listed from most recent forty-fifty comments, the issue is moot in practical terms.

The regulars here are going to see it.
Occasional users might miss it.
Drive-bys don't matter.

It's a filing issue.

You could post it under 'Chicken & Dumplins' and just as many people would read it.

No worries.


(And FWIW, it's probably because your site promotes the films on the 'Productions' front page, like "The Art of Pain" and "Farewell Darkness", that qualify your link to your site as a promotion of your site.

I imagine a sensible workaround would be to copy and paste the information from your 'New Distribution Model' page to a google docs page - where no advertising exists - then people could discuss the issue/model as you have demonstrated a valid interest in doing - with no conflicts of interest.)

Click to expand...

^
Pretty much what I just explained to him in a PM. Well stated.

Of course discussion can continue here, and just as many people see it. It's just a housekeeping/categorical issue. Carry on.

Works for me!

(I try to create the illuuuusion I'm paying attention. )

I'm glad someone has decided to go this route!

There're still a lot of concepts up in the air and by no means is there a concrete standardized foundation for online distribution outside of iTunes etc., but I'm sick of this industry being one to always drag their feet until the last possible minute instead of jumping on the opportunity for a big piece of the pie.

Very interesting read and I think everyone will definitely take something away from this.

Also, in terms of CDN - services like CloudFlare offer free services which would suit smaller to middle budget productions.
If you combine this with another "real" CDN like MaxCDN you can leverage both services for a ridiculous overall price.
In the case of doing both with a wordpress site, for instance, you could get 1TB of bandwidth for $39.95.
The fact that you are using both CDNs to play off each other means you reduce the overall load for both systems, meaning you could easily drag that 1TB out to server 30-40,000 users each month for the better part of 3 years, assuming you aren't using these services to stream the actual product.

Back in 2006 you posted about your new approach to online
entertainment. You have been away since Dec of 2006. I notice all
the links you posted in the past are gone now including links to
your podcasts and movies. I take it that means many things have
changed in the past five years for your company.

So what have you learned about online distribution in this time?
What have you changed? What have you improved on?

What I've learned?

I've spent the last couple years working on Feature Films. My work on uPressplay, along with the films promotional material, led to more high profile sites, Robin Hood, Unstoppable, Lego Atlantis and my most recent is Spiderman. Web dev is how I pay the rent. Filmmaking isn't helping with my IRA. What I learned from those experiences was about mass deployment and creating intriguing environments. Along with setting up environments for international deployments. The German Umlaut can kiss my ass. That character was the bane of my existence for a good part of a year.

I produced 2 feature films and a bunch of different shorts. With varying degrees of success. Couple wins, a bunch of festivals, and 2 glimpses into the distribution process. uPressplay as a delivery tool was successful, and would actually still be viable for html5 deployment. Small alterations to the video codecs and video files would have been needed to be made. But, it's simplicity would still provide an enjoyable user experience.

What I found running the site for a good part of 7 years, is that there are a lot of internet trolls out there. Malicious jerks trying to steal traffic and jack with your system (IndieTalk Admin, I feel your pain. I am in no way trying steal traffic from this site. It's the leading filmmaking forum out there.) I was tired of being a cop. Blocking and removing spammers. No, I don't need Cialis. Nor Viagra. No, I don't want to date a 17 year old Russian chick. Along with a hundred different streaming services competing with the site, I decided to change focus on what I really wanted to do. Tell stories. Not police my site for dicks.

So, I've been in the middle of both worlds for awhile. Which I think provided me with a unique perspective on the Online Piracy debate this year.

What have I learned? Banner ads and pre roll ads don't pay out enough to finance a full production, nor a community site. Google ads don't cut it either. Unless you are getting millions of hits, which reduces profits by requiring more expensive servers. Streaming is convenient if you want to skip around, but I still prefer progressive downloads. html5 is the future for both websites and app development, but still doesn't work as good as Flash for interactive environments. And has brought back many of the cross browser issues we fought against in the early 2000s.

The biggest jump from then until now, is embracing computer programming. Once I broke into the Ether, it opened a lot of possibilities. Utilizing computer connectivity to create more than just a viewing experience, but providing a way for users and content creators to interact with each other. Which is why I have been focused on Expression Engine development for the past 2 years. It streamlines the process, and has a very supportive community willing to help you trouble shoot issues with specialized scenarios.

The New Model article is really my game plan for what I'm going to do next. Spending my free time working on script ideas. Hoping to have one concept ready by the end of spring. Take it from there. So, the document started out as my business plan for my next film. What I realized when I got the first draft done was, this would only work if the industry and internet community embraced the concept and adjusted their behavior. Spreading it around as a white paper could start a movement, or disprove my theory. Either one is good. So, I decided not to hide it. Give it out for free. Anyone embracing it, needs someone to build it. That's me, and the hundreds of Expression Engine devs that help me in the forums. Win Win.

That's about as honest of an answer as I can give. I've been at this for over 10 years. Don't plan on quitting. I would imagine that anyone reading this forum would agree, "It's what makes life worth living."

Josh. Thank you for your input. I guess we can call the next couple years, The Great Stream Wars. Netflix, CinemaNow, Vudu and the like will be battling for market share. Where I feel it's going to shake out, is each studio will have it's own service. Disney is already moving in that direction. Any of the services above will probably partner or be bought out by a studio. I'm totally fine with this. And it really goes back to my model. At least from a small studio stand point.

One of the frustrating parts of making films, is the distribution blocking that occurs. It currently isn't an open market, which caters to bigger studios. And forcing most filmmakers into allegiance with corporations. Thus degrading the quality of films hitting the market. Even Netflix is blocking entry now. And from what I found out during a meeting with a distributor last month, they pay a one time fee of about $4,000-$8000 for films similar to the one in my model. I'm sorry, that doesn't even come close to covering costs.

I just read a good article about iTunes and eBooks. Discussing the "Agency Model." You set the price, iTunes takes 30% to cover distribution costs on the system. This is much better. Still think 30% is too steep, but it's a step in the right direction.

http://online.wsj.com/article/SB100...67831767489216.html?mod=WSJ_hp_LEFTTopStories

Amazon has a decent thing going. What I don't like about it is, there is no interactive environment creating a universe around the title. DVD authoring use to be cool, but even that art form is dying a slow death. I am going to look into the web services side of things. Which may prove as a good way to host your media.

Wordpress Question: Is there a built in component that allows an admin to create membership and ecommerce items in the CMS? Integrated with Paypal?

I've been toying with the idea of giving Wordpress some dev time. (Wordpress: Free, EE: $300) When I demo-ed WP a couple years ago, I didn't like the url structure and chose to use EE instead. What's keeping me from shifting: community support and available modules for specialized tasks. I haven't found many things I can't do in EE.

Interesting. I haven't read the entire article, and I've just skimmed the responses, but I can see there's a lot to think about. Thanks.

With piracy always an issue I think the best option would be to offer SD copies of anything for free with HD copies being on a paid or subscription basis depending on what type of content it is. If you really think your stuff is going to end up on torrent sites, beat them to the punch. I've seen bands put their albums up on torrent sites with their own descriptions that read, "we make close to nothing every year and spend every extra dollar and every waking hour making this music. don't just support our music, support us as artists and if you like what you hear give a little back at URL." It's too easy to disassociate the work work from the creator when it's all just a digital file.

It'd also be ideal if movies came out digitally as they were released theatrically. There's an inherent desire to get media before everyone else. The entire concept of "leaked" games, movies, music, all revolve around this. Personally, if I can purchase a film digitally when it comes out in theaters I'm far more likely to than if it were to come out digitally months later.

Beyond that I always consider iTunes and film festivals. Indie theaters are more likely to pick your film up months later if it's already played there during their annual festival. I don't know that there's a way of avoiding fees and percentages though. Everyone wants 100% and I'll agree that it's not fair but until there's a rental/purchase app built into every television set it'll be hard to circumvent the traditional channels of distribution.

upressplay said:

Wordpress Question: Is there a built in component that allows an admin to create membership and ecommerce items in the CMS? Integrated with Paypal?

I've been toying with the idea of giving Wordpress some dev time. (Wordpress: Free, EE: $300) When I demo-ed WP a couple years ago, I didn't like the url structure and chose to use EE instead. What's keeping me from shifting: community support and available modules for specialized tasks. I haven't found many things I can't do in EE.

Click to expand...

I have some experience with wordpress - URL structure is pretty flexible now, and overall it's getting better for truly custom site development, but I still kind of find it a pain to work with. Fundamentally it's a blogging platform, and despite the fact that it's grown far beyond that it still has a lot of assumptions that are based in blogging. There's no built in component like you are describing, but quite a few plugins that can add that kind of functionality. In fact there's a huge community of developers and plugins out there that can enable almost anything you can imagine - but I often find the user interface to be poorly implemented due to wp limitations.

Are you trying to put together a recipe with pre-built components that other filmmakers can follow, or are you trying to build a platform that other people can use? I've never used Expression Engine (my framework of choice is Symfony), but my guess is if you're trying to build a platform it would be a better choice. I generally only use wordpress for simple sites without specialized needs that need to be maintained by a non-technical user.