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Tuesday, March 17, 2009

The Reality of DVD/Digital Revenues Today: 90-10

I took just a few notes while I was moderating yesterday's SXSW Film Fest panel on 'The Future of DVDs and Digital Distribution.' It was populated with execs from New Video (one of the biggest funnels that gets indie films onto iTunes), Cinetic Rights Management, and SnagFilms, but the folks who really made the panel, I thought, were filmmakers Gary Hustwit and Morgan Spurlock. Unlike most of these panels, where people talk in generalities, this time we got some specifics about where we are today.

Hustwit and Spurlock and the other panelists seemed to agree that even if you can get your film placed on a few of the big digital marketplaces, such as iTunes, Hulu, Snag, and Netflix's streaming service, you'll do well today to earn about one-tenth the revenue that you earn from DVD. They seemed to agree that there's about a 90/10 breakdown today, in terms of the ratio of DVD revenues to digital.

Hustwit said that 'Helvetica' has earned about $60K in digital revenues so far... and it's among the top ten documentary rentals and downloads on iTunes.

Spurlock's film 'Super Size Me' is among the most popular films on SnagFilms, the site that sells advertising around documentaries and shares a slice of the money with filmmakers. Yet he said that 'Super Size Me' and 19 other films he'd supplied to the site earned just $1,200 from Snag over a two-month period. 'Super Size Me' alone sold almost 70,000 DVDs in the last quarter of 2008, he said.

"If you’re looking to pay your rent [with digital distribution], not so much," Spurlock said. "But if you’re looking to pay your phone bill, you have a great chance."

Steve Savage from New Video and Matt Dentler from Cinetic Rights Management also shared a bit about the fees they charge filmmakers when they assist with digital distribution on various platforms. After the platform takes its cut (iTunes takes 30 percent of revenues, for instance), New Video takes about 15 percent more... and Cinetic takes a 25 percent fee.

Hustwit was quite vocal about urging filmmakers to take the DIY approach whenever possible." Why are we building other people’s businesses when we could be building our own," he asked. But even he relies on New Video to get films onto iTunes.

I asked Savage what the #2 digital marketplace is, after iTunes. He said it's Microsoft's Xbox gaming platform.

I asked Rick Allen, CEO of SnagFilms, whether he could share with us the percentage of people who watch streaming films on Snag and later go on to buy the DVD. He said there isn't a good average, but that less-well-known films tend to have a higher "conversion rate" for DVD sales than some of the bigger name docs on the site.

Here's some coverage of the panel from Web TV Wire... IndieWire (owned by SnagFilms, incidentally)... Scott Macaulay at Filmmaker Magazine.

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