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Friday, February 6, 2015

VOD on your film -- How Much Can I Make? Also, Kinonation

As all of us low-to-no-budget filmmakers scramble to figure out how to survive in this new landscape, the question rises often: "Can you really make money on VOD?"

I'm going to tell you that it's certainly possible given how our newest film "Garden of Hedon" has been doing on Amazon. Have we made our budget back? Hell no. But considering we've done ZERO advertising on it other than a few interviews for online sites it's been doing very well. (and we've also only offered it for sale, not it's actually selling at a $9.99 price point)

Haven't checked it out yet? What are you waiting for? CLICK HERE!
(it's also available on Blu Ray, but it's almost sold out AGAIN)

Anyway, I stumbled onto a site called kinonation--they're an aggregator. If you don't know what that is, I'll try to explain it quickly.

You will not get your movie to Netflix or Itunes or Hulu or any of the other big boys without a distributor...OR an aggregator. For a fee you can submit your movie to the aggregator, and they will then submit the film to any of those sites you ask them to(and have paid them to, as each site costs something different)

The decent aggregators will give you your money back(or most of it) if your film is rejected from the place they submitted it. It's expensive(most aggregators want in the neighborhood of $1500 to submit your HD film)--so believe me, if you're NOT going to get your money back on rejection then it's a $1500 gamble.

If your movie DOES get approved then you get 100% of the profits minus a yearly fee of like $79 from the aggregator.

I have never tried an aggregator.

But kinonation has a new idea. They will take your film and submit it to the various places for NO upfront cost. They take 20% of any money you make on any approved venue.

A much bigger chunk but the much-better way for filmmakers. I feel the same way about producer's reps--you wanna go with the guy who's willing to take a percentage from what you make rather than an upfront fee. He doesn't make a dime unless he sells your movie, so it's incentive for him to pimp your film. It also tells you that he believes in your movie.

Any rep who wants upfront money rather than a percentage is clearly a guy who has no confidence in selling your flick.

So kinonation is relatively new. I can't find any information about their successes. They keep a pretty great blog with a lot of useful information, and I found this interview below with the founder that sheds some actual light on--get this--NUMBERS you might expect from VOD.

Ad Supported Revenue

As a filmmaker it may be mildly irritating to have multiple :30 sec TV spots before, during & after your feature film. But it definitely generates income. Hulu is one of our beta-test partners, and so we already have some good data from the dozen or so KinoNation films that are live on Hulu — and we're adding more every day now. Likewise with Swiss-based Viewster. So what are the revenue factors here? In simple terms, it's the number of ads served before/during/after your films, multiplied by the price of the ad. In reality, ads are sold to various agencies at different rates. So you may have a :30 sec spot in your film on Hulu for BMW, at a CPM (cost per thousand) of $23. And also a Tide spot at a CPM of $19. Plus there may be 9 ad "slots" in your film, but insufficient demand at the moment it's playing to fill those slots, so 2 of the 7 go un-monetized. Hulu suggests an ad slot every 8-12 mins. Which is why in the KinoNation metadata, we have a section for ad breaks where the filmmaker defines — with timecode down to the frame — where the ads are inserted. Much better viewing experience if the ads don't interrupt a scene. So what does this mean if you have a film on Hulu?  Let's say it gets watched a modest 200 times each day. By "watched" I mean someone starts watching it — they don't necessarily finish watching it. In fact, the average time watched may be the most critical metric — not just in revenue terms, but in raw "how engaging is my film?" terms. If they bail (on average) after 20 minutes, you have a problem. If they bail on average after 50 minutes you make a LOT more cash. Remember, it's all about averages — the reality is that some people watch to the end, some bail within the first 5 mins — and most are in between. Anyway, 200 times a day means your film "sells" around 1000 ads. So at a CPM of $20, your film has just made twenty bucks. Which you share 50:50 with the outlet. So you made $10 today. And then KinoNation take 20%. You're left with $8. Doesn't seem like much. But that's $3000 a year from one of many VoD platforms, and my #'s are actually uber-conservative. If you successfully promote your film you can make way more. Meanwhile, with Viewster in Europe we're seeing a lower CPM — around 5 or 6 Euros. Not surprising — less mature market, less premium outlet. But, every view of your film on every outlet is incremental revenue. That's why you need to be on dozens of outlets.

Subscription VoD Revenue

There's a little more dough in SVOD, I think, because you're not a slave to ad rates and CPMs. SVOD means the user is paying a flat monthly (Netflix & Hulu Plus) or annual (Amazon Prime) fee. Amazon Prime and Hulu Plus are part of our beta test, so I can provide some numbers. Amazon Prime is their $79 a year subscription to get free shipping. But it also gives the subscriber free access to Amazon Prime videos. KinoNation filmmakers can select Amazon Instant and/or Amazon prime. Most select both, which is probably wise. Prime pays 10 cents per movie played. So when a thousand people watch your film on Prime, you make $100, less 20% to KinoNation. Again, it's not big money, but the math starts to work for you because of the tens of millions of Amazon users, multiplied by month after month. It's better with Hulu Plus. They pay 18.5 cents per view (defined as a minimum of six minutes.) So a thousand views grosses you $185. Not bad.

Transactional Revenue

Transactional VoD (TVOD) is radically different in psychological terms — the viewers has to pay a flat fee for your film. With most VoD outlets (but not all) you can set the rental price, or at least a price band. It's typically $3-6 per rental, for 48 hrs. You get 70% via iTunes, or 50% via almost everyone else. More on this in future posts — right now we don't have any data.

Pretty interesting stuff. I've applied for an account so I can get a better idea of what they're looking for in deliverables. I was a little weirded out that they claim your movie cannot have any URLS in the end credits...they say all VOD outlets insist on this, but I can tell you that my movie Bounty has a bunch of URLs(not just the movie's, but a couple of web sites I thanked), and we played on Time Warner, Comcast, Verizon, etc.

And I thought most movies have URLs at the end, so I hopped on Netflix and scanned the first two movies I came across. No URLs. So I dunno.

Will update this as I find out. But if you have had any dealings with kinonation please post a comment so we know.