Residents of Hong Kong experienced the very first VoD (Video on Demand) in 1990. This service was terminated ten years later because of the lag in digital streaming technology and the associated high costs of delivery.
American cable TV operators started offering VoD in 2005, and today it is widely offered in North America. Movies and television shows can now be accessed on demand, and subscribers are able to pause, fast-forward and rewind their movies. Netflix has created an empire with their Vod offerings, with over 40,000,000 subscribers in the USA alone.
You don’t need to be a film school graduate to know it has taken time for a monetisation model to be developed which satisfies content providers, viewers and operator/distributors at the same time.
In theory, if a filmmaker decides that their movie will sell for, say, $2.00(with half the money going to the distribution service) then a million units sold would yield a million profit. If the movie could be made for half that, then a film producer could go to a film investor and say that their half million investment would be covered by a million in VoD sales.
LA producer, Jason Brubaker is one of independent films’ VoD pioneers and has been writing and utilising VoD as a revenue stream for movies for over five years. He has a very different argument about how useful VoD sales projections are. He uses traditional internet marketing techniques to try and forecast the revenue of a film based on the conversion rates of the film’s advertising and promotion budget to direct sales of the DVD or VoD sale.
By using some straightforward common sense one should be able to extrapolate and find some idea of potential income and use these statistics in your film investment package.
If you are seriously interested in this approach before you approach investors for your film you should read Jason’s excellent article on this subject:
And if you want to learn even more – take the Marketing Digital Content course we’re running in January.