MovieMaker‘s Second Annual Guide to DIY Digital Distribution

At a panel at the USC School of Cinematic Arts this June, Steven Spielberg, and George Lucas sounded a death knell for the dominance of theatrical distribution, heralding Video on Demand (VOD) as the future of cinema. The resonance of those two particular moviemaking legends expounding on the end of the theatrical blockbuster model is ironic, even wistful: It was their 1970s films, Jaws and Star Wars, which were largely responsible for spawning the dragon that VOD is now slaying.

Some people have dismissed Spielberg and Lucas as alarmists, but there’s no doubt that we’re at the center of a paradigm shift in the way we watch movies. VOD, once as much of a novelty as nickelodeons, is maturing every month, becoming mainstream and cool (note, too, the symmetry in the industry’s return to the once-obsolete single-viewer player).

It isn’t hard to rhapsodize about VOD’s socio-political implications. The word “Demand” is in the very name. This service orbits around the desires of its consumers, a far cry from the alternative top-down, “watch what we tell you to watch” system, with studios playing the proverbial gatekeepers. One imagines liberated auteurs free to stick to their visions without the constraints of moguls bearing down upon the more unsalable aspects of a project. Yet there is, we’ll admit, some hyperbole in this picture. The vision of a cinematic utopia in which creators hand their films directly to their ideal consumers is, and always will be, a fantasy within a capitalist system. In art, the cream must always rise, and with it, hierarchies, rules, economies—different structures from before, but structures nevertheless.

And that’s where our Guide to VOD Distribution comes in. This is MovieMaker’s second year publishing the guide, and we’ve made a couple of tweaks to best reflect the current conversation. It aims to help you make sense of the present VOD landscape—the rules of the game, as it were. Like any nascent medium, VOD is so much in flux that any attempt to document it must be a snapshot, not a monument. Every film may be best suited to one platform, because every platform is different.

Take YouTube and Vimeo, two intrinsically comparable sites that have, of late, taken opposite paths toward monetization. While YouTube has instituted more gatekeepers than ever to the process, Vimeo on Demand seems the clear winner for independent moviemakers, offering a depth of control all but unheard of in mainstream VOD while maintaining the name-brand familiarity of a top destination platform in its own right. This early in the game, though, who can really say? There’s no standard road to exposure anymore, so moviemakers need to do their own research and map out a path that best suits their individual needs. Allow us to provide a helping hand…

 

A Note on VOD Terminology

Ad-supported: A platform inserts short ads before or during feature content. Viewers watch the ads (often begrudgingly) with the understanding that ads enable free programming.

Device-friendly: The range of devices that a player may be available on are computers or laptops, tablets, iOS and Android smartphones, Roku, Xbox 360, Playstation’s PS3, Nintendo’s Wii, Boxee, and different televisions.

DRM: Digital Rights Management, a set of access control technologies. Purportedly to protect intellectual property rights, but often inconveniences legitimate creators and customers.

Geo-blocking: Control over the world-wide territories where your digital content can be distributed. In general, limits profit and reach, but is sometimes necessary when different distributors own different geographical rights.

Pay-per-stream/Download to Rent/Download to Own: Different options in paying for content, either purchasing or renting – basically, rental indicates a finite amount of time that a viewer can buy access to a video

Price-setting: Control over the pricing of your own content—an important control to retain.

Subscription: A viewer pays a certain monthly or annual amount for unlimited access to a platform’s database of titles.

 

Destination VOD Platforms

With the triumphs of Netflix’s originally produced series “House of Cards” and “Hemlock Grove,” and the recent announcements of Amazon’s five new shows in development, it seems like many of the big boys of VOD are taking a page from Hollywood of old by becoming producers as well as distributors and exhibitors. Yet this vertically-integrated VOD model is in many ways a relocation of the studio system onto a digital landscape—a newly-walled garden that, now as before, relegates independents to the margins in favor of bigger budgets and names (Fincher, Roth, et al).

For the independent moviemaker, these destination sites can provide a huge viewership. But from a commercial viewpoint there are more cons than pros. Sites like iTunes, Hulu Plus and Vudu essentially demand the additional cost of hiring a middleman aggregator to get onto their databases—where it is then all too easy to get lost in the mix. Most subscription-based services like Netflix (and its imitators like the UK’s LoveFilm or Blinkbox) add to that a lack of revenue per stream (typically compensated by a low, one-time licensing fee), and an effective exclusivity (because a film’s availability on Netflix cancels out the likelihood of viewers renting or buying it elsewhere).

Individualized perks like geo-blocking and price-setting are often (though not always) absent in the streamlined atmosphere of these megastores. It’s not to say that independent films can’t survive on these sites—many do. But we recommend you navigate the aforementioned minefield of dangers with caution, incorporating a buyout as only one stage (and a later one, at that) in a multi-tiered digital distribution strategy.

 

Amazon Instant Video

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Viewing Model: Subscription (Prime members), Rental or Purchase (non-Prime members)

Creator Revenue: Revenue split (50 percent Amazon, 50 percent creator)

Pros: Exposure // No intermediaries or set-up costs (on CreateSpace, Amazon’s self-publishing and self-distribution arm) // Device-friendly (except Android devices) // VOD listings on IMDb page

Cons: Zero price-setting control // No international availability // Lower (50 percent) revenue share

Use with: A tight budget; the no-cost model staves off risk, reducing your liability

 

Hulu/Hulu Plus

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Viewing Model: Ad-supported (Hulu) or Subscription (Hulu Plus)

Creator Revenue: Upfront licensing fee, Ad-share (50 percent Hulu, 50 percent creator)

Pros: Exposure and prestige // Upfront licensing fee reportedly higher than Netflix’s // Ad-share revenue per view // Device-friendly

Cons: Intermediary (distributor or aggregator) necessary // Alternative platform marketability damaged // No international availability (besides Japan)

Use with: An already sizeable theatrical/festival success

 

Indieflix

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Viewing Model: Subscription

Creator Revenue: Royalty Pool Minutes, whereby creators are paid a fluctuating amount per minute watched of their film across the pool of IndieFlix subscribers.

Pros: Revenue per view // No intermediaries necessary // Referral program (filmmakers are paid a small amount for every subscriber they introduce to IndieFlix, meaning social networking clout pays off even more) // Geo-blocking // Device-friendly // Acts as an intermediary to bigger platforms for an additional fee // International availability

Cons: Less exposure (relatively small subscriber count) // Films have to be screened at a festival to qualify for submission (though exceptions occur)

Use with: A vigorous social media marketing campaign, or a film with high re-watchability—narrative-driven, feel-good pieces, perhaps—to chalk up those minutes

 

The iTunes Store

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Viewing Model: Rental or Purchase

Creator Revenue: Revenue split (30 percent iTunes, 70 percent creator), after encoding fee

Pros: Exposure and prestige (over 570 million active user accounts) // Revenue per view // Wider international availability

Cons: Encoding fee charged to adapt films to iTunes player // Intermediary (distributor or aggregator) necessary // Steep 30 percent revenue spoils to iTunes // No control over promotion within the system // DRM prevents easy accessibility on non-Apple devices

Use with: A film with an identifiable name attached (otherwise being featured on their main page is nigh impossible for an indie)

 

Netflix

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Viewing Model: Subscription

Creator Revenue: Upfront licensing fee

Pros: Exposure and prestige // Device-friendly // Limited—but growing—international availability

Cons: No revenue per view // Intermediary (distributor or aggregator) necessary // Alternative platform marketability damaged // One-time licensing fee varies based on film’s existing track record, meaning success breeds success and failure begets failure

Use with: An already sizeable theatrical/festival success

 

Vimeo on Demand

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Viewing Model: Rental or purchase

Creator Revenue: Revenue split (10 percent Vimeo, 90 percent creator). Note: regular, free Vimeo content (i.e. not On Demand) has to rely on Vimeo’s previous monetization avenue, the Tip Jar (15 percent Vimeo, 85 percent creator), only available to Pro and Plus accounts.

Pros: Exposure and familiarity of brand // No intermediaries necessary // High revenue split for creators // Price-setting, geo-blocking control // Device-friendly // Wide international availability // Bonus materials like trailers and behind-the-scenes segments

Cons: $199 annual Vimeo Pro account needed to upload On Demand content, which isn’t huge, but adds up // Limited to 50GB of upload space per account

Use with: Anything, right now; Vimeo seems a flexible enough platform for all kinds of films, though that may change in the future as they refine their service

 

YouTube

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Viewing Model: Ad-supported, rental or purchase, or subscription

Creator Revenue: Ad-share via YouTube’s Partner Program, rental or purchase revenue split as a Rental Partner, or subscription revenue split as a subscription channel (split is reportedly 45 percent YouTube, 55 percent creator)

Pros: Exposure and ubiquity // No set-up fees // Rental price and viewing window control // Limited international availability // Embeddable rental video player

Cons: Low partner revenue returns // Users typically need thousands of views/subscribers to qualify for partnership // YouTube’s demographic unaccustomed to paying for content

Use with: Independent serial content that is already something of a brand on YouTube; monetization on YouTube is an exclusive path that has to be earned with time—it’s not a friendly platform for start-up creators.

 

Aggregators

Here are a few things you should know about aggregators, the companies that negotiate the placement of films onto major destination platforms on behalf of moviemakers who otherwise have no access to these databases. Most also handle delivery and encoding of a film for the appropriate formats. There are dozens of content aggregators out there, and most aren’t particularly indie-friendly—after all, as gatekeepers to platforms, they are the opposite of DIY. Transaction fees are crucial in this arena (with the traditional revenue split being as high as 50/50), so we’ve picked out two that charge a flat fee instead—which seems fair for a finite service.

Distribber

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Transaction Model: Upfront fees (ranging between $5,000 for cable VOD, $1,200+ for iTunes, and $95 for Amazon)

Pros: Existing relationships with big platforms // No revenue split // Money back if platform denies film // Basic marketing efforts

Cons: No guarantee of acceptance on platforms // Limited international reach (only US and Canadian sales) // No shorts

Quiver

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Transaction Model: Upfront fees (undisclosed)

Pros: No revenue split // Access to platforms like iTunes, Amazon, Google Play // Online storage of content with no size limits // Wide range of services: quality control, repair, transcoding and conformance of ancillary assets like audio and key art // Site promises global distribution

Cons: Costs for repairs et al might add up

Traveling VOD Players

Traveling VOD players are the antithesis of destination platforms, not only in practical usage, but also in ideology. Instead of pulling viewers to a single online location, these players are embeddable into all manner of sites: The ultimate manifestation of a decentralized, bottom-up information society. While the lines between destination and traveling VOD are starting to blur (with some destination services starting to offer limited embedding options), the following list of players demolish the multiplex entirely, disseminating their content throughout the farthest reaches of the Internet (including, in some cases, Facebook pages). You don’t go to these films; they come to you.

In keeping with this newfound liberty, traveling players are much more flexible and customizable in their services than most destinations, allowing creators to submit their films for distribution without aggregators siphoning off revenue. Naturally, the players are available on all connected devices, usually pay-walled and non-exclusive. Price-setting and geo-blocking control is the norm. A unique landing page is typically built for each film, as well as rich viewer analytics and campaign strategizing advice. Most advantageously, the traveling concept is a built-in marketing tool, allowing for not just ease of access but sharability via social media integration that is increasingly the deciding factor in a film’s commercial success. Distributors like Yekra and Distrify take this a step further by allowing third-parties to partner with creators as “affiliates:” hosting a film and receiving a percentage of all revenue generated through views on their site. This “crowdselling” mobilizes a well-defined niche audience to become advocates for a film they enjoy, letting them earn something for their passion and curatorial efforts. Everybody wins.

On the whole, therefore, we recommend these options for a distribution campaign over most destination sites, as they provide a level of transparency and creator control that Netflix and iTunes distinctly lack. This kind of DIY distribution is harder work, to be sure, but this is independent film we’re talking about here. If it’s not hard work, you’re not doing it right.

Chill

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Creator Revenue: Revenue split (30 percent Chill, 70 percent creator)

Pros: No set-up costs // Redemption codes for Kickstarter and Indiegogo backers // Integrated storefront available for merchandise sales // Gifting available

Cons: Narrower embedding options // Revenue split less unfavorable

Use with: Chill is something of a destination platform in model, despite its embeddable player; serial content and comedies are its strong suits at the moment

Distrify

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Creator Revenue: Revenue split (30 percent Distrify, 70 percent creator), Affiliate hosting (10 percent affiliate, 25 percent Distrify, 65 percent creator)

Pros: No set-up costs // Wide embedding capability (including social networking sites) // Affiliate hosting // Brick-and-mortar-friendly: player displays upcoming theatrical/festival screenings by area, sells tickets // Multiple languages and currencies // Bonus materials (commentary, etc.) offered for “Deluxe Editions”

Cons: “Indie” membership option (free) allows only one film; unlimited content output requires paid membership ranging from $20 to $501 a month // No gifting options // Revenue split less favorable

Use with: As with Yekra (see below), films with identifiable, passionate audiences; Terry Gilliam’s The Wholly Family is a past success

Pivotshare

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Creator Revenue: Revenue split (30 percent Pivotshare, 70 percent creator)

Pros: No set-up costs // Very flexible payment options: rental, purchase, subscription and tip jar // “Network Publishing” feature allows multiple content creators to publish on the same channel, calculating fair revenue based on statistics // “Showcase Channel” (for one or two pieces of content) or “Library Channel” (for larger catalogs) options // iOS and Android apps available

Cons: Narrower embedding capabilities // Revenue split less favorable // Network Publishing, while fostering collaboration, does not disclose its allocation of revenue to different parties

Use with: Projects that combine the efforts of different contributors under one product, so revenue can automatically be delivered to the right people; a wide variety of content is welcome, including instructional videos

Reelhouse

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Creator Revenue: Revenue split (6 percent Reelhouse, 94 percent creator)

Pros: Highest revenue split for creators // Flexible payment options: free, paid, or “support,” which allows viewers to contribute to causes as they watch a film, with crowdfunding-like incentives // Official distribution partner with Sundance (2013 Sundance films are distributed sans transaction fees) // Integrated storefront available for merchandise sales

Cons: Narrower embedding capabilities

Use with: Content that has connection to a cause (like a documentary) or that will otherwise inspire its audience to pay for more than just a viewing, to make full use of the Kickstarter-esque “support” function

Veam

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Creator Revenue: Revenue split (percentages undisclosed)

Pros: Veam packages content directly into a unique app to be downloaded by users straight into their devices from app stores—a streamlined, easy process // Access to the biggest platforms in the app market, but without the expensive middlemen for placement

Cons: Limited to app-friendly devices, which might alienate a large portion of your potential audience // No marketing services included // Flexibility of pricing and territories subject to app stores

Use with: Veam is still in beta, and their costs are a little hazy at the moment; in theory, though, it seems like a solid idea—as long as your film scales down well to smaller screens and you work to get the word out about it

VHX

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Creator Revenue: Revenue split (percentages undisclosed)

Pros: No set-up costs // Promotion on partners Reddit and Buzzfeed available // Multiple languages // Gifting and coupon options // Kickstarter backer fulfillment // Bundling of other digital products like soundtracks in integrated store

Cons: No rental options at present, only purchase // Narrower embedding capabilities

Use with: VHX states upfront that they provide no marketing services, so (as always, of course) the onus is on you to promote your film wisely; being a name always helps, too; Louis C.K. is VHX’s biggest past success

Yekra

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Creator Revenue: Revenue split (20 percent Yekra, 80 percent creator), Affiliate hosting (percentages vary)

Pros: No set-up costs // Wide embedding capability (including social networking sites) // Negotiable affiliate hosting (via “AffiliateConnect”) // High revenue split for creators // Personalized subscription options available besides pay-per-stream // Multiple languages and currencies // Gifting available at a discount

Cons: No purchase options at present, only rental

Use with: A film whose audience is identifiable and passionate enough about its subject to become active affiliates; niche documentaries have so far proven the most successful, including the recent release of Sirius—which grossed $250,000 in 48 hours on the platform. MM

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