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MillimeterRevenue Expectations of Digital Distribution
Mar 18, 2009 10:48 AM, Craig Erpelding
Today's filmmakers and distributors make most of their money off of box office and DVD sales, but with many viable digital distribution models available like iTunes, Netflix, Hulu, Amazon VOD, Juiced and others, is there money to be made by filmmakers via such sites? If so, how much?
"If you're looking to pay your rent, not a chance. If you want to pay your phone bill—go for it," says Morgan Spurlock, director of Super Size Me and Where in the World is Osama bin Laden?
Spurlock notes that in his first 3 months of having Super Size Me on Snag Films' website he made just over $2,000. Compare that to the almost $70,000 made from DVD sales of the five-year-old film during the 4th quarter of 2008 and we now have some perspective.
As for overall numbers, Helvetica and Objectified director Gary Hustwit notes that around 10% of his overall revenue for Helvetica has come from digital distribution methods. On specifics, Hustwit says they've made about $60,000 from his 2007 film from iTunes and Netflix.
If that number seems stout, it should be stated that Helvetica has been on the "Top Films" list on iTunes for a while now, which Hustwit says is a bit of a self serving list as once you get on there, it sparks enough interest in your film to keep it on the list. But, the initial work to get Helvetica on the list was all Hustwit, who blasted his email list when the film first became available on iTunes, shooting it up the list.
"Digital [distribution] is not a magic bullet," Hustwit says. "The exposure the filmmaker puts in, the groundwork, is what makes a film successful. Digital is just one option, money stream." Hustwit feels strongly that it is easier and more efficient for the filmmaker to go directly to his or her audience than to wait for distributors to do so.
The top digital distribution site is iTunes, which usually takes a 30% cut of each sale, leaving 70% to the filmmaker "if accepted" into the online store. The #2 digital distribution site? Xbox, but the demographic for this distributor skews to the lower end of the 18-24 age range.
But, to get accepted to iTunes, it usually takes the work of an "Aggregator" who takes your movie, handles the metadata, and encodes it to iTunes spec. The world's biggest aggregator is New York-based New Video, which actually has a WiMax link directly with Apple, Inc. in Cupertino.
And of course, of that 70% of iTunes "take" left for the filmmaker, typically 15% of that is taken by the aggregator to cover their costs.
Nonetheless, as we continue into the future of digital distribution, the revenue expectations for filmmakers will undoubtedly increase—and it's an important business process to become familiar with. But, in the meantime, for the serious cash, it still resides in theatrical and DVD releases.
Continue the discussion on “Crosstalk” the Millimeter Forum.