Film and TV business Codex Entry

(This is not a blog. It’s a codex – raw, unpolished and brutally frank.)

A lot of changes happening. Business models are changing, therefore lots of opportunities. The data is pointing towards starting a distribution company that also does production, instead of a production company that also does distribution. Using this codex entry to save all the ideas in my head right now.

1. Free digital distribution has very low margin: Ads are NOT effective for monetizing online. Look at YouTube’s monetization:
   • https://onezero.medium.com/this-is-how-much-youtube-paid-me-for-my-1-000-000-viewed-video-1453cad73847
   • $1000 from 3 million viewers. So if you make a movie for a million dollars, ad revenue will not break you even.
   • $0.20 per view is the HIGHEST possible, for a really relevant video-ad match. It would still take 5 million people to watch the film for free in order to make $1m – doesn’t make sense!

2. Margins are only in DIRECT SALES – stuff that people BUY, by opening their wallets.
   • You have to create something that an end consumer will spend their own money on. The margins in those sales only will pay for the whole movie.
     
3. IDEAS:
   1. 3D/4D/VR
   2. Bandersnatch model: movies that change with viewer preferences
   3. Ecommerce store for merchandise, with partnerships to allow worldwide distribution. Will need geolocation to work.
      • Social shopping (Pinduoduo [1], [2] and Groupon) are worth pondering over.
   4. Throwing online or virtual events, meetups etc (both ticket sales and sponsorships: Airbnb Experiences model)
      • https://alexisgrant.com/2013/03/25/qa-how-nejla-routsong-is-building-a-business-around-a-meetup-group/
   5. Other add-on products and virtual goodies to sell along with the free film streaming.
      • You’ll probably make all your revenue from <1% of users (the ones who pay for stuff).
      • Extra footage and deleted scenes, buy personalized video messages from the cast, Q&A events, special mention in a future episode’s credits, and other unique experiences that you cannot purchase in general for movies.
      • Coupons (freecharge etc)
      • Lots to learn from the social gaming industry: look at Zynga and the World of Warcraft model – they sell in-game virtual items to people, and save the card details up front so that it’s easier to buy on impulse. No returns/refunds either. This requires a stable micropayments infrastructure. Look at Devrant app as well.
        
4. Localization and Internationalization of the platform, for every movie, will become CRUCIAL. Get worldwide distribution rights for all assets (and characters?) from creators and do a great job, just like Webtoons does.
   • Like how Pixar does it:
     • https://www.pixarpost.com/2015/01/laura-meyer-localization.html
   • Saving costs on dubbing, by hiring lesser known but talented people – you don’t need as much star power for dubbed shows.