Monetizing Films on the Internet

Rumor has it that the Wachowski Brothers (The Matrix Trilogy, V for Vendetta), are planning on spending over 100 million on marketing their new film “Speed Racer”. The average spent on big Hollywood productions is around 30-40 million. They are more than doubling the average marketing budget! With a production budget already surpassing 150 million dollars, this pair is banking on Speed Racer to easily recoup all investment. This wishful thinking is prevalent in an industry where it seems everyone believes that throwing money at your content will garner you limitless profit potential. These studio suits could stand to learn a thing or two about distribution and marketing from independent production houses.

With the cost of producing and distributing any sort of digital content decreasing exponentially every day (cheap HD Camera, internet as distribution keystone), the studios need to learn from several successful independent films. Case in point, the hockey documentary “In The Crease”, a film with little to no budget and absolutely no support from the major studios, recouped all of its marketing and production budgets within 40 days of its release. How did they do it?

Films do not need 100,000,000 dollar marketing budgets to bring attention to the content. In The Crease was successful because they focused on their audience and did so in the cheapest ways possible.

Key points to "In The Crease" Success

“Their entire marketing program cost less than a single half-page in the New York Times”

They focused entirely on their niche market of hockey fans through specific marketing plans (ex. Advertised only in Hockey magazines) and did not care about getting movie reviews. Their target market does not care about reviews. Likewise, Speed Racer, although it can relate to a wide audience, has an anime fan base. The Wachowski Brothers should focus on this base through comic book, anime and convention advertising. Flooding televisions with 100 million worth of ads will bring the masses to the theater, but will they be able to turn a profit after spending so much on advertisements?

Lastly, the producers of In The Crease did not worry about the normal procedure of film distribution. The producers used createspace.com where anyone can upload a film and let the website handle all aspects of distribution. CreateSpace simply sends the content’s owner a check for however many copies were sold. There is no mass theatrical release, which is very costly. It is simply a direct to DVD operation where only the exact amount demanded is created. Now the studios still are not releasing their new content digitally, but this form of distribution is widely available. All it takes is for one studio to make the first move.

I highlight the example of In The Crease to act as a blueprint for major studios and their future distribution and marketing practices. If film studios continue writing blank checks for marketing and if they do not capitalize on the cheaper digital distribution, their complaints of piracy and loss of profit carries little clout in my book. If they have the ability to save money and do not realize this potential, they cannot complain about loss of profit that is out of their control.

In The Crease made all its investment back ($500,000) in 40 days. Studios should follow this example, but who has the guts to step up and be the first mover?

Will it be APPLE distributing Disney's library? (Steve Jobs is the largest single shareholder of Disney). Will is be Jeff Bezos at Amazon and his 'box'? How about createspace.com. Perhaps they will open their arms to the big studios (they have already shown their effectiveness). Only time will tell. Stay tuned for future updates on this story....