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Top 10 Tips: DVD and Digital Distribution
August 5, 2009

     

Column - Top 10 Tips Header

Editor's Note: With each column, Jon will examine one of his "Top 10 Subjects They Should be Teaching in Film School," as outlined here.

This month I'll provide a basic introduction to subject #10,  distributing DVDs and selling your content digitally.

DVDs - Working With a DVD Company
A major home video company will help you get your title into the large brick-and-mortar stores where DVDs are still sold: Walmart, Best Buy, Borders, Barnes & Noble. They also have established relationships with chains of smaller stores. Before agreeing to working with one, make sure they have a good reputation for actually paying producers. Talk to other filmmakers who have worked with them.

Even if you have a deal with a home video company, this does not mean that you can't sell DVDs from your own Web site or at your live events. You just need negotiate this in your deal. Normally, you'll buy DVDs from the home video company at a reduced rate. Considering that DVDs only cost a large company about $1 to produce, you should negotiate a low a price as possible, certainly not over $5 each.

Even if you don't have a deal with a larger home video company, you still have plenty of opportunities for selling your DVD on your site. First, you'll need to author you DVD. You can either pay a company $1,000 and up for this service or you can do it yourself with DVD Studio Pro. But it is complicated and encoding is an art — so make sure you have the technical chops for it, or find someone who does. Three of my feature docs were authored DIY: Better Living Through Circuitry, SRL Ten Years of Robotic Mayhem and the PAL version of Bomb It.

Top 10 Tips - DVDs

After authoring, you need to replicate your DVDs. If you think you'll possibly sell a lot, you can produce large quantities for not very much money, about $1,300 for 1,000 or $1.30 each. However, if you're not going to be selling many DVDs, you might consider one of the DVD print-on-demand services, such as Create-Space run by Amazon. Create-Space will then handle your fulfillment as well. However, the per-unit charge on Create Space is more than you could do it yourself, so it only make sense for small quantities of DVDs.

If you are doing large quantities of DVD sales, I recommend working with a fulfillment company such as Neoflix, which is a full-service fulfillment company has online shopping carts available for you to modify to your needs. They also handle customer service, inventory, shipping and accounting. (If you are going to do massive quantities of DVDs, in the tens of thousands, it might be economical to use separate services for your shopping cart, customer service and fulfillment). Fulfillment companies will then charge either a percentage or per item fee in addition to startup costs and monthly fees.

Digital Rights
Digital rights are becoming a bit of a minefield. If you have a home video deal, chances are they requested some of your digital rights. If you sold your project to television, chances are they wanted another chunk. In fact the lines between television and Internet/digital rights are getting more and more blurred every day due to changes in technology that allow you to watch Internet-delivered content on your television.

Types of Digital Rights The definitions of these are becoming more and more well-defined as territories are being staked out by various vendors. But here's a basic introduction:

Free Streaming – this is where you watch the content as it plays over the interet, for free. You Tube videos are streamed. Hulu is an ad supported free streaming service.

Subscription Streaming – Where a customer pays a monthly fee for the ability to watch a catalogue of content. Netflix’s Watch Now is subscription streaming. I believe that more and more companies will start a monthly fee based subscription service. There is a perception that this was one of the strokes of HBO’s genius for the cable industry and can be replicated for the Internet. Netflix’s Watch Now service might be proving this to be true.

Download to Own – This is where a customer can download a digital file to their computer or other storage device and owns the film in that form. iTunes purchases are the most popular example.

Download to Rent – Similar to Download to Own – but the customer does not own the film or file, they only rent it for a specific period of time, usually 24 hours.

Mobile – This is the delivery of content to mobile phones. Some Internet companies are already asking for these rights to be included in their deals since mobile phones are able to access streaming content on the Internet.

Video On Demand (VOD) – This is normally considered a television/cable right. However it is increasingly being split off as a separate right and the distinction between it and the digital rights listed above are lessening. The key difference between VOD and Download to Rent is the delivery mechanism. VOD is delivered through your cable box. Download to Rent is delivered via the Internet. Like Download to Rent, normally VOD gives you a window in which to watch the program you rent.

Pay Per View is essentially VOD but for a one-time viewing.

When the Internet is seamlessly integrated into your television, which is beginning now these lines of distinction will blurrier and blurrier.

There are two basic ways to deal with your digital rights. These ways are not mutually exclusive — similar to your DVD rights.

Aggregators
An aggregator is a company, usually a kind of distributor, who has relationships with the major buyers in the digital distribution field and acts as a gatekeeper to content. Back in the wild west of digital rights a few years ago, iTunes welcomed all filmmakers to submit their films for inclusion on iTunes. They were quickly overwhelmed with content. Now iTunes only obtains content from aggregators. Hulu also mainly obtains their material from studios and aggregators. Even if a company does take material from individual filmmakers you will have a leg up if you go through an aggregator. Aggregators will take anywhere from 15% to 50% of the money earned from the online service.

Do It Yourself (or modified DIY) In which you provide your content to a company who will host it for you and charge customers for you returning the lions share of the revenue to you. In essence these are digital fulfillment companies similar to the DVD fulfillment companies.

This is a very cursory introduction to this complex field. Be very careful as to what rights you give away to whom. Make sure that people who are requesting rights from you have a way to exploit those rights in the best manner possible for your film. Keep track of what rights you give to what company/territory. You should seek some advice in the deals you do, especially legal advice. You should use someone who is familiar with the changing landscape of digital rights.

Jon Reiss is filmmaker and consultant living in Los Angeles. His most recent project was the feature-length graffiti-art documentary Bomb It. He may be reached at reiss.jon@gmail.com  He will also be a speaker at the upcoming Digital Video Expo (September 22-23).






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