Wednesday, January 23, 2008

Streaming vs. downloading and what it means for indie film

One of the big issues in Hollywood right now is content distribution on the web, it's one of the roots of the current WGA strike and probably the biggest concern for the media companies right now. If you look at sites like: Fancast, Hulu, Joost, MeeVee and Veoh, it would seem that the industry is going with the streaming video model. It's definitely easier for the older demographic to figure out (say, 40+), you just find content on one of those sites, then push play. Also, the media companies like it because it's not that much different than traditional TV and it's easy to monetize through advertising. There's a lot of money behind all these streaming video sites, but guess what? They should be looking at the alternative to streaming video, they should be looking at downloading sites. Ipsos Insight did a study, here's the link, and younger consumers actually lean towards the free downloads model, while older consumers lean toward the free streams. While that younger, tech-savvy generation gets older, it should mean that the future is in downloading, not streaming. Faster computers, wider broadband and advancing technologies will all enable users to download huge media files faster and faster. So, where does this leave indie filmmakers?

Well, here's the problem... streaming video is easier to monetize, but much like the current system, the sites that distribute your content will be getting most of the ad revenue. Just ask any member of the WGA what they think. Besides, it's been proven that people may watch a few minutes on their computer, but a feature length film? So, I really don't see streaming video as much of an opportunity for indie filmmakers. However, downloading content is a different story. Downloading content means you're not confined to your computer, that user can take that content anywhere - they can put it in their portable media player, watch it on their computer or burn it to DVD. So, this is a viable distribution method for indie filmmakers... Now, where do you upload your film for distribution? Well, right now the popular place would be a P2P site. As I've mentioned before (link), P2P sites can offer indie filmmakers a great marketing opportunity, but you are offering up your film for free as the cost of that marketing. So, how can you make money off of downloads? The first way is by charging people to download it, which would be like the iTunes model. In fact, iTunes, Amazon and Netflix are all going to be offering paid download models soon. What would be a great idea for them is to offer an uploading feature, where people with feature films can upload their films and make it available to all users, then they share revenue. I wouldn't be surprised if you do see that one day. However, it's widely known that people generally don't like paying for their downloads, so I think there's another way... and it's advertising.

In 2006, "Akeelah and the Bee" was released in the theaters and was funded mainly by Starbucks. The film was heavily promoted in Starbucks, as well as sold in Starbucks. The budget was fairly low and it grossed over $18Million, which is a low gross by Hollywood standards, but huge by, say, indie horror standards. Without writing a novel, I think there will come a time when there's an agency that finds advertisers willing to fund movies. In exchange, the advertisers will get branding on everything, an ad that runs before the movie, product placement in the film, a bunch of PR, etc. If your making a movie with a budget of $100Million, this isn't going to work, but if your budget is $500,000, this is definitely a system that would work. The advertiser is happy with getting exposure and the filmmaker would've gotten a paycheck just for making their film... all revenue after the fact would just be gravy.

This is just one idea and I have lots more on where things are going, but where Hollywood is scared of the future, I think indie filmmakers should be rubbing their hands in anticipation.

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