By Rob Millis
Good news for filmmakers: there has never been a better time for independent distribution.
When we unveiled the Dynamo Player at SXSW in 2010, Will Coghlan and I gave an overview of every similar online rental system available to independents. At the time this included Amazon’s Instant Video, YouTube’s brand new Rentals program and — nothing else.
We always thought our greatest competition would come from companies like Amazon and YouTube, but while many startups have entered the market, these two goliaths have been painfully slow to introduce new features and improve their terms for filmmakers (Amazon still asks you to mail in a DVD!). Meanwhile, a flurry of transactional video-on-demand (TVOD) services like Distrify and Chill since launched, and even Vimeo is cautiously getting into the game this year.
Together, all of our independent companies serve what venture capitalist Mark Suster recently defined as the “torso” of the media market — the large and under-served middle that has always been the sweet spot for independent film sales.
Until recently, reaching the middle market often meant art house releases, targeted DVD distribution and niche channels in the television markets. The margins always remained desperately thin because marketing and distribution costs per sale were as high or higher than more popular releases. But today, while major studios are forced to invest more each year to create the same returns, independents (and savvy people they hire) are getting more effective at reaching their target audience for far less money.
When we launched Dynamo, our riskiest assumption was not that viewers would pay for content online (iTunes and others had proven that), but that we could beat the traditional margins of independent distribution. Building on the “1,000 true fans” theory, we were confident that filmmakers could use the money they saved working with us to reach their audiences directly and earn more per viewer than through any other distribution channel.
Sure enough, Dynamo rentals soon beat the price per purchase of DVDs while filmmakers saved a fortune by investing in their own direct outreach to fans through email, targeted advertising and buzz from social networks.
And after years of studying viewer habits it is more clear than ever that the greatest opportunity in film distribution is still in the torso. Consider the following changes in the last three years (many of which we now take for granted)
- viewers now expect a film to be available online and increasingly refuse to wait for windowed releases, often paying a premium if it is available or pirating the film if it is not
- viewers pay more for documentaries online than they do anywhere but cable pay-per-view (which is often part of the market torso as well)
- producers earn more on every transaction from Dynamo and other independent platforms than they do through mass market aggregators or systems like YouTube
- investments in targeted outreach to fans can generate immediate results for filmmakers without sacrificing rights to the film
- producers can receive realtime sales data so they can respond to buzz and marketing results immediately by adding or changing content, adjusting pricing, tweaking their outreach strategy and more
- film festivals, with strong branding and naturally targeted audiences, are becoming viable distributors and aggregators in their own right
- crowdfunding platforms not only support professional production budgets but also keep diehard fans and evangelists excited for the release date
- streaming a film in 1080p HD is now seamless for most viewers,
The only question now is who your audience is and how you want to reach them.
So to filmmakers, festivals and even potential competitors sitting on the sidelines, I say jump in, the water’s fine.
Rob Millis is the founder of Dynamo Media and one of the creators behind the Dynamo Player, the first online pay-per-view platform freely available to independent filmmakers. Rob was an early pioneer of online video production and distribution, and has been a founder, investor or advisor with several online media and industrial technology companies. You can find Rob on Twitter at @robmillis or learn more about Dynamo at http://www.DynamoPlayer.com
