There Is No Online Rental Business

As I write this The Weinstein Company's top rental on YouTube is Michael Moore's SICKO, with a whopping 151 views.  In reading PaidContent's article on the TWC/YTube alliance, you can't help wonder if there IS any business to be had in online rentals.  Is the online one-off transactional content-rental business completely non-existent?  And if so why?

I think we are starting to move away from the impulse buy mentality. It just doesn't fit with the world we are living in.  Even with the convenience of online rentals, there is not enough value in it. If we are going to offer films in a single transaction, we need to offer more than the film.

My netflix queue, or rather my family's queue, is almost 2500 strong, including the WatchInstantly.  I know what I want.  I know what it is on the queue.  I also have at To Watch list at home that is close to 500 titles.  I recognize that those that don't try to earn a living in the film biz may not have such a robust list, but who in their right mind would rent a film that might be mediocre, when for twice the rental amount they can have unlimited streaming for the month.

A world of surplus and access require a different business model from one of scarcity and control.  Single transactions -- without a richer context -- are an old world model.

If we build a social world around that film, it may be enough to jump me from my already planned choices of viewing.  If we build a ramp of consistent discovery to that film, it may divert me from what I already scheduled.  If you offer me additional rewards for my viewing, I may opt in.  But if you ask me to fork over my hard-earned cash, all you give me is a film, particularly if it is not guaranteed to be great, and you ask me to watch it all alone, I will go elsewhere.  And evidently everyone else is too.  Well, everyone other than those 151.

Addendum: The failure of TWC titles to gain traction on YouTube has caused much reflection.  What other factors contributed to the dismal performance?  Scilla Andreen blogged the other day that the fit between content and platform was off.  What else?

Addendum 2/10/11:  LA Times reported a few days ago that downloads in US are up 40% to $385M/yr.

How To Make Money With The New Independent Film Distributors’ Business Model

Guest post by Sheri Candler. Yesterday we ran part one highlighting the problem.  Today, Sheri points to how distributors will benefit financially from the new model.

It may be that while you are in audience building mode, you will be spending more than making to develop a truly exceptional experience for your community. If you start this now before your entire business collapses, you will fare better.

-Create an online experience that makes the lives of your community better, easier, richer and be the number 1 site they visit for news, information, resources and community tailored to what interests them.

-Fill the vacuum of the lack of curation. People are confused by where to find things they like and overwhelmed by the choice. In a sea of content, be their favored destination. In this way, you can take on the likes of Netflix, a company that offers a huge range that makes finding content specific to personal interests nearly impossible because they don’t intimately know who their customers are. You will know this.

-Lock in the community by maintaining a dialog that will turn their initial attention into a revenue stream for your brand. A subscription model is what you should aspire to, but you cannot rush to that without first showing what you have to offer and reeling them in. First offer the ability to sample, share and then buy.

-Innovate in the online experiences you build to keep the community engaged and interested in making the circle bigger for you and for them. Incentivize those who are the most active at enlarging the community. Take the money you would have spent on outside marketers and use it to think of interesting incentives for your tribe.

I fear the problem for all of you will be waiting to see if another business model becomes successful before you decide to reinvent your own. This is extremely detrimental because waiting only results in being that much further behind. The first ones to embrace a new model win. It is why Netflix beat out Blockbuster. By the time Blockbuster conceded the model Netflix forged was legitimate, they could never catch up. Entrenched companies usually misjudge the speed with which change happens. Now is the time.

Sheri Candler is an inbound marketing strategist who helps independent filmmakers build identities for themselves and their films. Through the use of online tools such as social networking, podcasts, blogs, online media publications and radio, she assists filmmakers in building an engaged and robust online community for their work that can be used to monetize effectively.

She can be found online at www.shericandler.com, on Twitter @shericandler and on Facebook at Sheri Candler Marketing and Publicity.

The Ever-Growing Filter Crisis (aka Is Too Much Too Much?)

Whenever I walk into a grocery store, I can't help but wonder if people really want so many choices.  But does the same applies to tomato sauce or frozen waffles also apply to art, literature, music, and movies?  Sure Pandora can source new music for me based on my prior expressed preferences, but music also works as a background pleasure.  The same is hard to say for movies.  And man, do we sure have a lot of great stuff readily available to us.  What are we going to do to filter and search through all our choices? My NetFlix  WatchInstantly queue has 275 titles in it currently.  Since at best I do two such titles a week, I am pretty much set for the next three or four years for the $108/yr I dole out to them.  And I think I add to that queue faster than I subtrack.

Snag recently mentioned their ambitions to aggregate over 100,000 documentaries (up from the current 1,500.  I recently heard of a VOD experiment utilizing something like 50,000 titles.  My consumer side loves even the mention of such volume.  But my filmmaker side starts to get the shakes as I wonder how the hell will people find my movies.

We've all heard that titles that begin with the letter "A" do better on VOD than any others.  Viewers have a hard time investing much search time in the current interface.  The Netflix algorithm for finding what I like is a nice tool for adding to the queue, but it an anonymous source and sometimes I want to know more of the "why" that than "just because you liked X".  I was excited to stumble upon WhichFlicks.com the other day and added ten more titles to my WatchInstantly queue as a result.  Yet they were all generally well known titles.

If the annual film production number estimates I was given recently by Chris Hyams of B-side fame were even 50% accurate (7000 films in the US, and 45,000 films produced worldwide per year), every filmmaker's most pertinent question is not "How do I get my movie made?" but "How am I going to get my film seen?" .

Who wins in the volume game?  The same folks who win in the limited supply game.  Who has the most money at the end of the game?  The same folks who had the most money at the start of the game.  Who gets their story told in the history books?  Those that write the history books.  Wait... I'm off point.  Okay, just sort of, but... you get the picture.

If we can't get attention for the work, how is it going to get seen?  I know many out there believe that the cream rises to the top, just like their are many that believe that hard work and a good attitude can bring you all you dream.  Me, I feel that the exceptions to those stories are what we must all work to prevent, that with effort and support, we can make it better together.

I don't think it needs to just be volume and quantity of the message that gets your work noticed, but that is still how it is all working.  Sure design is still effective and originality scores points too.  And occasionally we see the underserved community come up and respond to a direct address (remember FAHRENHEIT 9/11 and THE PASSION OF THE CHRIST) or even a well served community respond to something that even just smelled authentic (BLAIR WITCH, PARANORMAL ACTIVITY), but what about good work in general, good stories well told, how can we find those and make them a priority for people again when they are being assaulted with choices from every sector under the sun?  Call me an optimist, but I am confident it can be done.

We lost an incredible service when all the film critics lost their pulpits at the national and local papers.  Individual blogs don't work the same way papers did.  Now you want sports news, you go to sports sites, and the chances are you aren't going to find news on some obscure indie film gem.  Sure you may get personalized ads on your social network and your thousands of friends and all those you follow have an opinion about what may be important that minute, but it isn't the same as a long standing relationship with a critic with a history of well thought out opinions -- you know how to judge the critic's taste against your own.  I know you can go to MetaCritic or RottenTomatoes but I personally find the aggregated opinions don't deepen my relationship with a critic or a film; they feel generalized, even after I drill down to the individual.

Even those friends whom I know whose tastes resemble my own, I don't know what they are watching.  Or listening to.  Or reading.  Or where to easily get those things even if I did know.  And when I get a recommendation, what do I do with it anyways?  Why can't I have one list that keeps it altogether for me, whether I am going to find it in a theater, or on Netflix, or VOD, or whether I want to purchase it?

Some solutions are also a bit terrifying.  If I let my tastes known about all things, if we have a set of common tags that I can like or dislike, even to varying degrees, presumably my next new favorite thing can be effortlessly found and delivered in this glorious digital age.  But when IT could happen here, when civil liberties are consistently ignored, do I really want to share my data?  Maybe such specific personalization is not such a godsend.

And what is it that we really want from such filters anyway?  It's not just what to watch, but also when to watch what we watch.   Doesn't eveyone miss those water cooler conversations about last night's Seinfeld episode?  Isn't the pleasure of going to the movies, largely about seeing it with other people?  We want to watch what are friends are watching so we can discuss it easily with them?  And not just really our friends, but also those we hope might become our friends too.

Really, when we all have over 1000 films on our To Watch list, how do we begin to make a choice?

Maybe It Shouldn't All Be Free

I find the current debate regarding micro-payments for print journalism fascinating.  Each morning, I work to talk myself out of a panic that we will soon be deprived of all the great newspapers, writers, and journalists.  A friend chimed in that after the papers fall then next up is the free internet.  The line of dominos is really easy to imagine. 

But maybe it shouldn't all be free.  I, like all my film friends, are looking for a model of survival, no longer success.  Reading Steve Brill's defense of micro-payments makes me wonder if there is anything that film fans and workers are really committed to paying for.  Variety & Hollywood Reporter start to feel like real luxuries these days.  Guilds and unions, like membership in IFP and Film Independent, are crucial in the same way that if you want a vaccine to work, virtually everyone has to partake -- but my son still screams with every shot (maybe if vaccines had a networking attribute like these organizations my son would respond better...). 
But what will we pay for?  My Netflix subscription seems like a better value with each new film that is available for streaming, even if I still prefer DVDs.  As they just hit 10 Million subscribers it seems that everyone will pay for access to every film.  As a devourer of new international film, I need a festival diet of projected new work from around the world every two or three months.  It's one of the reasons I can never leave NY.  Jaman may offer it online but I need to see it large in a room full of people.  And as much as I like to see it, I like to talk about it, read about it.  So what will I pay for?  I honestly don't know.
Anyway, read Brill's suggestion, and ponder the applicability to our world of film.  I am.

Hope For The Future pt. 3: The List #'s 9-13

9. Plenty of DVD manufacture & Fullfillment places (see sidebar).

10. Plenty of places to place your content online for eyeballs to find (anyone want to generate a comprehensive list to share?).

11. Things like Netflix and Blockbuster.com make it possible for anyone with a mailing address to see any movie he or she wants. A lot of viewers who haven't had access to theaters or even video stores that stock smaller films can now get them if they know about them. (thanks Semi!)

12. The Major Media Corporations retreat from the “Indie” film business. This will open up distribution possibilities for entities not required to produce high profit margins or only handle films that have huge “crossover” potential and necessitate large marketing budgets.

13. A new turn-key apparatus is evolving for filmmakers who want to “Do it with others” in that they can hire bookers, publicists, marketers – all schooled in the DIY manner of working. Instead of hoping for a Prince Charming to arrive and distribute their film, TFFilmakers are seeking out the best and the brightest collaborators to bring their film to the audiences.

Finally: Instantly

So much to celebrate today.  Besides the obvious, I found this.  As a Mac user and lover, this also brought me real joy, albeit not quite equal to the election, but still substantial.  Now if only I could find a way to expand my day to 48 hours.

Repeated exposure to ambitious films improves the audience's taste.  The longer someone is a member of Netflix, I have been told, the more their taste gravitates to auteurs.  Perhaps the revolution has begun and no one has noticed.
Thank you Film School Rejects!