Today's Big Question: What Do You Give Away for Free?

Any sentient being would agree that you need to make free a part of your strategy these days: a free collection of behind-the-scenes footage, a free song from your soundtrack, a free look at the first 10 minutes of your film, a free game for mobile phones to get people interested in your fantasy world.

The question I've been hearing at the last few conferences and film festivals I've been to is this: "Yes, free is important. But how much should I give away for free?" What people would like to know is, at what point do all those freebies help someone decide that, no, they're actually not all that interested in your film...or, are you giving away too few free samples, thereby under-marketing your project? If you gave away less for free, would you make more money? If you gave away more for free, would you reach more people?

I think these questions are all fundamentally unanswerable. But I'm interested in your take. How can you determine, in a scientifically-provable way, whether you would've earned more (or less) from a given film if you gave more stuff away for free (or less)?

I'm suggesting that the amount of free you do needs to be a gut decision -- though it probably makes sense to dial it up and dial it down a bit over time and see what the impact is.

And here's an example just so we have a case study to discuss: Cory McAbee's space Western serial "Stingray Sam" was released this week, in theaters, on DVD, and as a digital download.

My sense is that the first episode (10 mins long), along with some songs, a trailer, some behind the scenes video, and a mess of still photos and storyboards, is a pretty good mix of stuff to offer for free. And I also like the mix of various packages at different price points that they've set up when you're ready to buy.

But would "Stingray" do better if the first five episodes were given away free, and the rest were paid downloads? What about if everything was free, supported by ads? Hard to know unless you try it -- and trying it entails taking a risk on revenues.

I think filmmakers will help one another, serving as guideposts, if they share actual revenue figures on their experiments with free vs. paid. And not enough do that. (Three counter-examples are Hunter Weeks, Morgan Spurlock, and Gary Hustwit.)

What do you think?

Disney's CEO, YouTube's Founder, and Wired's Editor Debate the Future of Monetizing Content

"The Digital Chiefs," a lunch panel earlier this week organized by the Hollywood Radio & Television Society, was one of the best conversations about digital media I've been to in a long while.

That was primarily due to the organizer's choice of a moderator: Disney chief executive Bob Iger. Having Iger asking the questions offered a really interesting window into what's on the mind of at least one major media CEO.

And that was mainly how Disney and other media companies will earn money from their content.

Iger's panelists were Wired editor Chris Anderson, YouTube co-founder Chad Hurley, Hulu CEO Jason Kilar, and Jonathan Miller, chief digital officer at News Corp.

I'm posting some audio (a little quiet, but listenable) below, along with a few rough notes from the discussion.

My notes:

Iger opened by mentioning that TV took thirteen years to reach 50 million people. It took Facebook nine months to get 100 million members. 400 million videos were streamed on Hulu last month. YouTube offers more than 100 million videos (there are 526,000 search results for "Disney.")

Chris Anderson noted that iTunes succeeds in getting people to pay for content by selling convenience. While you can get music for free, the iTunes version saves you time, and ensures you're getting something of good quality.

Iger said he was "mildly encouraged by that -- not giddy, but encouraged."

Chad Hurley said YouTube is introducing more ad formats to help the site's partners earn money, so they can continue to create high-quality content. Iger wanted to know if there will be ad messages online that can sell a product as well as a 30-second spot on television. Hurley didn't have a forceful answer, noting that online there are multiple formats, from text ads, graphical ads, and 5, 10, and 15-second video ads. What's important, though, is that these digital ads can be targeted and relevant, unlike typical broadcast ads.

Iger said that monetizing social networks remains a big question mark. He asked Jonathan Miller whether MySpace fell prey to a "next-best-thing" phenomenon (being supplanted by Facebook), or just didn't stay on top of its game. Miller conceded that MySpace forgot that there is a continual need for reinvention.

Picking up the theme of targeting, Miller suggested that advertisers will pay more for online ads as behavioral targeting increases (targeting ads based on what you do online and interests you express), though he admitted that online ads may never achieve the same prices that network television commands.

Miller touched on the idea that the costs of content creation may need to go down in this new world, if advertisers aren't paying the prices they once did. (That's a point we discuss pretty frequently here at CinemaTech.)

Jason Kilar said that Hulu has been finding that people remember brands in the ads on its site better than they do on TV, even when it's the very same ad placed in the very same program. People are simply more engaged online, he suggested. They've made a conscious choice to watch that piece of content. By virtue of placing fewer ads in a show on Hulu (relative to the same half-hour on television), Kilar said, they can charge more for them.

Kilar also said that when Hulu's team designed the site, they didn't want it to look like "Tokyo at night," with lots of features and buttons and teasers. They very deliberately focused visitors' attention on the shows and the ads.

Miller pointed out that on Hulu, 70 percent of the ad revenue goes to the content creators. Iger followed up by saying that 70 percent of much fewer ad dollars than television generates may not be enough money for media companies to continue to invest in high-quality content.

Talking about paid rentals and downloads, Hurley said that YouTube will begin experimenting with both with its content partners.

Diving into some of the topics covered in his book Free, Chris Anderson suggested that for digital products, free samples are becoming a replacement for advertising. "The products sell themselves," he said.

Jason Kilar said that the content that will do best in this new world is stuff that is unique, totally original, and can't be substituted with anything else. He offered NBC's "30 Rock" as an example.

Toward the end, Iger asked his panelists what new things they're following. Anderson said he was watching videogames, iPhone apps, and "more granular social networks" like Ning that bring together groups with narrow interests. Kilar said he was following changing consumer tastes using search.twitter.com, mostly related to Hulu. He said that Hulu makes changes to its site based on what people are saying on Twitter.

I left a bit before the panel was over to head to a meeting, but here's more coverage of the panel from the LA Times' "Company Town" blog and from Variety. (Seems like I didn't miss much...)

And here's a 30-minute audio segment from the panel (just click play below, or download the MP3 file.) Bob Iger is the first and last to speak in this clip.



Photo of Chad Hurley and Bob Iger, above, courtesy of Getty Images.

What Percentage of DVDs Are Rented Today Through Vending Machines?

The NY Times covers the dispute between the studios and Redbox today. (Just to recap, the studios worry that dirt-cheap $1 rentals via kiosks will hurt their DVD sales and even could put a crimp on VOD and digital downloads... and so they're trying to withhold DVDs from Redbox until four weeks after their initial DVD release.)

But there's this interesting tidbit in the story about where the DVD rental business stands today:

Redbox and its vending rivals now have 19 percent of the rental market, compared with 36 percent for rent-by-mail services (Netflix) and 45 percent for traditional stores, according to the NPD Group, a market research company. NPD estimates that vending will grow to a 30 percent share by the end of next year, at the expense of traditional stores.

I didn't realize that vending machines and Netflix now represent the majority of the DVD rental biz....

Are the MPAA's Lawyers Already Onto This Dude?

Perusing some reviews of the new Kodak Zi8 pocket video camera, I stumbled across this astonishingly honest one by S. Lakshmi:

Got this Camera for certain purposes

1) Small size
2) Easy transfer to PC
3) Basic camcorder functions that FLIP has with additional features like 4X Zoom and some little image stabilization
4) Ease of use without complex features that require reading a manual
5) Recording movies in the local multiplex without arousing suspicion

Glad that multiplex bootleggers are conscientious enough to post their product reviews on Amazon...

Talking FFF...At DocMovies, Directors Notes, and DIY Days

Continuing to try to spread the word about Fans, Friends and Followers...

Recently published are:

- An interview with DocMovies. Here's the very last part of that Q&A (also available in Hebrew.):

DM- Last question: will there be the next Michael Moore, or Errol Morris coming out of the digital world?

SK- I'm an optimist, and I think you should never underestimate the creativity and power of artists -- hopefully, that comes through in the book. I think that if you look at any new medium in its earliest days, whether it is photography or cinema or videogames or Internet video, you could say, "Oh, that's a juvenile art form, and no one has done any meaningful work in it yet." It seems simple and rudimentary compared to all the more sophisticated art forms that came before -- think about the early films of Thomas Edison compared to the great operas of Mozart -- what a joke Edison's movies were. But give it 20 or 50 or 100 years, and you get John Ford and Alfred Hitchcock and Martin Scorcese and Frederick Wiseman and Errol Morris.

- The Directors Notes podcast from the UK, hosted by MarBelle.

- My talk from DIY Days Philadelphia, on August 1st:



Many more great videos from that event are available here.

Why Disney Bought Marvel

Patrick Goldstein of the LA Times has an interesting take on why Disney paid $4 billion this week for Marvel Entertainment and its stable of 5,000 comic book characters. (Here's the NY Times story on the deal.)

Goldstein writes:

For Disney, this latest purchase is a way to take all of the unbranded -- meaning risky, obscure or experimental -- material out of its wheelhouse. The studio is now a giant collection of familiar, easily accessible brands -- Marvel, Pixar, [Steven] Spielberg and [Jerry] Bruckheimer -- all under one large, even more familiar umbrella brand: Disney. It is a sprawling company that will probably someday look a lot more like Procter & Gamble than a movie studio.

...[W]hat the Marvel deal really means is that Disney is radically restructuring its creative aspirations. Once a company that drew inspiration from within, it is now paying top dollar to buy mature businesses -- first Pixar and now Marvel -- to feed its merchandising assembly lines.

What do you think?