411 Video Information

Video Distribution Strategies

July 3, 2011 by leslie in Ask Leslie, Press with 0 Comments

Video Distribution Strategies

You’ve just completed the master on your special interest video, educational/training piece, or independent film. Now how do you get your title into the hands of the right audience? Distributing your title can prove to be the most challenging aspect of the entire production process.

The key task is to define a target market and go after it. In other words, define your potential customers, locate them, and convince them to buy. You can do this yourself, or you can work with a distributor.

Jamie Paolinetti, a former professional bike racer and a current producer/director of TV commercials, married passions with The Hard Road, a feature-length documentary following the disappointments, sacrifices, and triumphs of a first-year pro cycling team.

Paolinetti self-distributes the title for $24.99 through his Web site (www.thehardroad.com), primarily to recoup funds for festival fees and advertising efforts. “We needed money,” he says, “and we knew there was this whole subculture of people who would buy the film right away. That was the final determining factor in selling the title online.” Paolinetti hopes eventually to attain theatrical, video, or cable distribution for The Hard Road.

Jamie Paolinetti hired a single designer to create the DVD cover, Web site, and poster for his documentary, The Hard Road. “We wanted to tie them altogether,” says Paolinetti, “so that anytime any publicity got out there, it would all look and feel the same.”

Rick Popko, a former editor at DV, wanted nothing to do with self-distribution when it came to Monsturd, the horror film he made with Dan West (www.4321films.com). “I don’t recommend that anybody self-distribute their own movie,” says Popko. “You’re the one who has to buy ads, work the phones, and pay for dupes. Trying to sell DVDs for $14 just isn’t worth our time and effort.”

Luckily for him, he says, Monsturd secured a three-year contract with Spectrum Films, and the company sold 4,000 copies to Blockbuster. Unluckily for him, Popko says he never received any earnings, and that Spectrum went out of business shortly thereafter. (DV’s attempts to contact Spectrum were unsuccessful.) The title eventually found a home with distributor Elite Entertainment (www.elitedisc.com).

Megan Cunningham, who founded Magnet Media, Inc. (www.magnetmediafilms.com), produces documentaries for film and television, as well as training titles. To market the 16 Digital Media Training Series (DMTS) titles produced so far to professionals working in film, television, print, and Web design, Cunningham employs a network of three dozen distributors and self-distributes. “There was and is no single distributor who could effectively sell the volume of educational products that we wanted to sell to make the series profitable. So we needed to develop a distribution channel, as well as sell directly through our Web site and at industry events.”

Cunningham says keeping a direct rapport with end users is a big reason why the DMTS titles have been well received. “We receive emails throughout the year, and some occasionally uncover areas of a program that need to be better addressed or produced differently. We would never learn that from a distributor.”

Cunningham says both distribution methods are important and offer different values to her company. “Our distributors are extremely wide-reaching and enable the series to grow and profit while providing national and international exposure. They also provide us with a co-marketing venue for partnering with software companies who sell through the same channel. Self-distribution gives us the benefit of having direct feedback and interaction with our audience, which is invaluable.”

Incorporating dual distribution angles presents a few special challenges for how and when Magnet Media decides to self-distribute its titles. “There are specific contractual obligations that we negotiate with each of our distributors, and those contracts vary in complexity depending on the size and mutual commitment that is being made by us and by the distributor,” says Cunningham. “We have certain restrictions on how and where we self-distribute in order to protect our distribution channel. We take these commitments very seriously, as our channel is critical to the success of our business.”

“Don’t just pick up the phone and start cold-calling distributors. A lot of these companies do niche stuff,” says Popko. After completing Monsturd, Popko opened the Distributor Directory (www.hcdonline.com) and cold-called several distributors, which resulted in zero callbacks, multiple hang-ups, and no requests for screeners.

To attract horror and sci-fi fans, as well as some press, Popko rented out San Francisco’s Victoria Theatre for $3500 and premiered the film with a weekend engagement. Three successful screenings earned $2500 and priceless positive press clippings. Popko once again contacted video distributors. This time he targeted those that specialized in horror and sci-fi titles. Nine out of ten of these distributors requested screeners. Two responded with contract offers, and Popko and West signed with Spectrum Films.

With reviews in magazines such as Rue Morgue, Cult Cuts, and Hitch, Monsturd caught the eye of Elite Entertainment, another distributor that specializing in the appropriate genre for Popko’s particular production. “[Elite] has a library with good stuff like Reanimator, Night of the Living Dead, and The Evil Dead,” says Popko. “It’s top-tier cult and classic horror films, and we’re really happy to be in that place right now.”

Paolinetti thinks there is an already established bicycle-riding audience for The Hard Road, even if the mainstream independent film community ignores it. He points out that “37 million people in the United States alone consider themselves cyclists or serious fans and another 30 million say they are, at the very least, interested in bicycle racing.” While he has easily garnered interest within the cycling audience, the theatrical and television distribution world hasn’t been as enthusiastic.

“ESPN and Fox Sports were really interested in financing the film, and I had two presale agreements before I ever shot one frame,” says Paolinetti. When neither of those agreements worked out, Paolinetti again contacted ESPN, this time with a completed film. The results however, were the same. “It’s frustrating when someone like ESPN, who you think this is a natural fit for, doesn’t even watch the film.” There has been interest from other channels, including the Outdoor Life Network (OLN), with which Paolinetti is currently in negotiations.

Magnet Media’s Cunningham says, “Our programs are bought and used by a diverse audienceÑfrom top editors in Hollywood, to independent filmmakers, graphic designers, and creative services departments.” She says the number of digital media creators has “rapidly expanded from an elite group of professionals to virtually anyone who owns a PC or a DVD player.”

Cunningham says that growth is driven by three main trends: “First, the demand for digital media applications is expanding beyond the elite handful of production companies to all companies, schools, and prosumers. Second, digital media software applications are becoming increasingly complex. Third, Web, print, and film/TV technologies are converging, creating a mandate for a more sophisticated workforce.”

“Companies outside the media industry are also adopting digital media,” continues Cunningham. “Software companies such as Microsoft and Yahoo have pioneered the use of streaming digital media for employee communications; it is becoming the de facto standard for training, marketing, and communications.”

Spectrum Films ran a full-page four-color ad in a video trade magazine promoting Monsturd as its sales force worked the phones. The result was the deal landing 4,000 copies in Blockbuster stores nationwide. The problem was that Spectrum closed shop shortly thereafter, and Popko says he never received a dime and didn’t even know the details of the deal with the video store chain. Since Spectrum still owned the rights to his movie, Popko opted to forego all profits from the Blockbuster deal in exchange for re-obtaining the rights to his movie. Spectrum agreed, and the contract was terminated.

Despite earning the pair no profits, the Blockbuster deal with Spectrum still turned out to be worthwhile for Popko and West. “It’s worked to our advantage,” reflects Popko, “because now people have seen it and others are hearing about it, but nobody knows where they can get it. It’s slowly turned our movie into some kind of cult film.”

Word of mouth and subsequent positive reviews in horror-genre magazines prompted Elite Entertainment to bring Monsturd into its library collection. This time around, Popko and West sold their movie rights for three years and agreed to a 70Ð30 profit split (in favor of Elite). If Monsturd grosses $10,000 within the first year, then the distributor has the option to bump the title to a five-year deal. Elite is currently developing cover box designs, with plans to roll Monsturd out in the January 2004 timeframe. In the meantime, Popko and West have started production on RetarDEAD, the sequel to Monsturd.

Paolinetti says, “The first step for The Hard Road was getting exposure through the dozens of cycling Web sites and magazines dedicated to bike riding and racing. We felt like we had that audience.” Paolinetti leveraged all the relationships he had built during his career as a professional bike racer to get coverage. With reviews and articles on over two-dozen sites, interest surrounding The Hard Road was building, “So by the time we were ready to say, ‘Okay you can buy the DVD,’ we had already received thousands of emails requesting a copy.”

To publicize The Hard Road, Paolinetti allows cycling groups, charities, and race and fun-ride promoters to organize big-screen presentations of the film. To cover his music licensing fees, Paolinetti charges the groups a flat rate of $250 to $500, depending on the number of tickets sold. He’s conducted 12 screenings thus far, one of which helped raise $30,000 for challenged athletes.

Partnerships with sites and mail-order catalogs to carry his film further helped spread the word within the cycling industry. “The split for each partner is slightly different depending on how much promotion they do for the film,” explains Paolinetti. “But the wholesale price is about $15 while retail is $24.99 across the board.”

Paolinetti says it’s difficult to assess referral stats since he doesn’t know how people get to his site when they want to purchase the movie. As far as partner sales, however, dailypeoton.com has sold the most copies at about 300. The only ad space actually purchased was on Velonews.com since most deals “included swapping ad space for a cheaper wholesale price.”

“At this point, I have to look hard at whether or not I need more ads,” he says. “I have articles coming out in print magazines like Bicycling, Triathlete, Sports and Fitness, Competitor, and a bunch of others. I think we’ll let the next month or so play out and see what happens.” In the meantime, Ryeka Sport and Video Action Sports are currently in negotiations with Paolinetti to get the movie into bike shops across America, Canada, Europe, Japan, Australia, and New Zealand.

Paolinetti hopes these efforts bring him one step closer to his eventual objective: “The goal is to find a distributor who will get the film a small theatrical run, or get it in the large video rental stores.”

Prices for Magnet Media’s DMTS programs range from $79 to $199. Cunningham promotes the titles at events, targeted Web sites, and works with strategic partners. Her company specifically targets creative professionals and schools that use digital media software.

Working with many distributors opens the door for various partnership opportunities. Cunningham actively initiates marketing plans, usually designed for a specific group of distributors. She also conducts database marketing efforts in conjunction with partners to help drive attendance to events, or embarks on promotions with resellers who will offer discounts on Magnet Media’s training DVDs when customers purchase particular software programs. “We do a number of promotions with distributors,” Cunningham adds. “It is very, very important to establish an even playing field when you work with as many distributors as we do.”

While these types of promotions certainly are time-consuming to manage, Cunningham stresses that they’re an essential part of managing an effective distribution channel. “These marketing efforts are incredibly successful because everyone wins: They help our distributors succeed, they help our software companies succeed, they dramatically improve the experience of the creative person who is using the software, and they enable us to maximize our distribution.”

No matter what the distribution method – a single outside distributor, a group of distributors, or self-distribution – consistent marketing is essential. “This is usually the part where most people lose their energy and motivation,” says Cunningham. “My advice is to prepare for this process ahead of time. Finishing your production is only 50 percent of the job. Today, where producing a DVD or film is almost as easy as recording your own garage-band CD or MP3, it is extremely challenging to try to distinguish your content effectively. It can be done, and there are many examples of independent producers who have succeeded. That’s where things like awards, testimonials, film festivals, and PR really help, as well as promotions and tie-ins to related products.”

Popko’s deal with Spectrum Films and subsequently with Elite Entertainment is structured traditionally, with Elite handling all marketing, sales, dubs, shipping fees, and fulfillment services for the movie title. “They have a graphic design team that does the cover box, a sales force that gets out there working the phones. They fulfill the orders and make the copies and make sure stuff gets sent out. And they make sure you get paid.” According to Popko, “All you have to do is sit at home and wait for the checks.”

Through different connections in the cycling world, Paolinetti was able to get a deal at a Los Angeles dub house to handle duplication. The first run consisted of 2000 DVDs for customers who had pre-ordered the title. Another run of 5000 is currently in the works. Unfortunately, early fulfillment didn’t run smoothly. The fulfillment houses “wanted way too much money because our numbers are not high enough,” he explains. “We have orders coming in ones and twos or tens and twentys, not hundreds or thousands at a time.”

While distributor Spectrum Films didn’t use Popko and West’s own cover art (left) for Monsturd, they did use their copy. The MPAA didn’t approve Spectrum’s first cover design, so the distribution company came up with the version (right) that eventually made it into Blockbuster.

So Paolinetti set up his own warehousing system with local kids stuffing the envelopes and addressing the labels. To process PayPal requests, Paolinetti set up a database so as the orders come in “we get all the mailing information and just print out the labels, stick on some postage, and drop them in the mail.” He has a wholesale relationship with the dozen or so partner sites where he sends them 50 or 100 DVDs on an as needed basis. Each partner handles fulfillment services on their own in exchange for a cut of the profits.

Magnet Media develops and produces all 16 of their DMTS titles in-house, and they also handle duplication and replication on their own, regardless of whether format choice is VHS, CD-ROM, or DVD. “We fulfill all distributor orders from a central fulfillment warehouse, says Cunningham. “How each individual distributor handles fulfillment services varies widely, since some of the companies distributing our products are national retail chains while others are smaller, specialty businesses.” Each Magnet Media distributor is offered a standard distribution pricelist and the company doesn’t make a practice of offering preferred pricing on retail products.

Popko and Paolinetti make the following additional suggestions for dealing with traditional video distributors for special interest, educational/training, and independent film titles.

  • Make sure that your pitch is ready. You may actually get the VP of acquisitions on the phone.
  • Never send an unsolicited screener.
  • Get and check references.
  • Have a lawyer look at your contract and make sure you understand how and when you get paid.
  • Remember that contracts are always negotiable and/or revisable and are not written in stone.
  • Don’t give up the rights to your title forever. The standard term is between three and seven years, but even that is sometimes negotiable.
  • Be prepared to play the waiting game before your title gets released. You’re not the only title in a distributor’s library.
  •  

    Megan Cunningham offers her own thoughts for independent producers. “The most important part of producing and distributing is to set realistic goals before you begin, by talking with distributors prior to producing your program or series,” Cunningham stresses. “Most people making films are personally interested in their topic, and passion is great and essential to producing a standout program. However, if you’re trying to run a business and need to earn back what you’ve spent on the production and profit from your efforts, then it’s important to understand some essential business concepts. You can’t be blinded by the fact that your content is simply of personal interest to you.”

    Assess the potential size of your audience and how much it will cost to reach that audience. “Are you targeting a professional or consumer audience?” Cunningham asks. “Professionals, libraries, or institutions will expect to pay $69Ð200 for a thorough, well-designed program, but consumers usually only pay $10-25 for a video or DVD.”

    “If you’re self-distributing, then events, direct-response campaigns, and ads can be very effective, but they need to be budgeted for ahead of time. It’s also important to set up projections and test your assumptions,” Cunningham explains. “If you’re selling through distributorsÑeven something as simple as Amazon.com, or through a professional educational distributor – they will take a portion of every sale to make up for the marketing that they do. That percentage ranges from 20 to 80 percent.”

    Popko and West paid $3500 to rent San Francisco’s Victoria Theatre to screen Monsturd for three nights. They made roughly $2500 in ticket sales and gained enough positive press reviews to garner screener requests from nine distributors.

    “They may also expect that you create and fund marketing programs to help them sell your product and distinguish it from the millions of others they carry. This decision will also effect how you approach the content and what level of information you need to communicate.”

    Find the right distributors. “In any area of distribution, there are typically three to five companies that dominate the market. The top three may change from year to year, and you can usually find out which these are by doing research. It’s important to speak with licensing and acquisition people at these companies prior to beginning your production. Chances are that they will be able to give insights in terms of your approach to the content or even which medium – DVD, VHS, or CD – will be most effective for your target audience.

    Grow your single-program into a series. “Often the initial investment involved in developing original content or setting up distribution is not worth the payback for a single program. That’s why distribution companies exist – to make the process more economical and efficient,” says Cunningham. “But if you’re looking to profit from the investment you put forward in your production, my advice is to conceptualize a series rather than a single one-off program. Inevitably, you will sell more, by virtue of having multiple products, and it’s usually far more cost-effective to do PR or advertising when you have a catalog of programs rather than a single episode.”

    “It’s why episodic television has evolved into the system that it is today and why you can buy a whole season’s worth of Friends or Sex and The City on DVD, and why Hollywood creates so many sequels. It’s far more cost-effective to produce multiple programs and market them at a higher price point than to try to market a single film or specialty program.”

    Set time and budget aside for distribution. “Distribution is a business that’s inter-related to producing but seems completely separate from it,” explains Cunningham. “It takes just as much work to distribute media as it does to develop and produce it.”

    CustomFlix (www.customflix.com) aims to fill the gap between doing everything yourself and handing off to a distributor. “We’ve created what we’d call an independent publishing system for content owners, video producers, and indie filmmakers who do not have traditional distributors,” says VP of Marketing John Geyer. “Our goal is to empower producers to successfully independently distributors. Before they had to do everything themselves or the distribution barrier was just too high, so their video just sat on a shelf.”

    The service targets producers who expect to sell between 1 and 1000 units, although Geyer says there are producers with the potential to sell 5000 to 10,000. Like a traditional distributor, CustomFlix handles backend fulfillment, including shipping orders on demand, handling customer service and e-commerce, and mailing out monthly profit checks with complete customer information on who bought your title.

    CustomFlix offers several services at different prices. You can send them your DVD for $49.95, or for $59.95 you can get the Publishing Kit, where CustomFlix sends you a blank DVD-R, you burn your title onto it, and return it to them in a prepaid mailer. CustomFlix then sets up and hosts your online store and provide on-demand duplication, packaging, and shipping of your DVD title for one year. They can also offer your title as a VHS tape at no additional charge. Renewal fees cost $9.95 per year thereafter.

    You set the price of your title and CustomFlix charges $9.95 per DVD plus 5 percent of the total selling price. “A lot of producers price their specialty content too low to compete with Hollywood, and that’ not really who they’e competing with,”explains Geyer. “hat you’e generally trying to do is find a niche audience that really cares about the subject, and that niche audience generally will pay a little more for that content.”

    For the producer lacking the proper tools to burn their own DVD-R master, you can choose the Video Publishing Package plus DVD Transfer option for $99.95 or the Video Publishing Package plus Pro DVD Transfer listed at $199. CustomFlix also offers DVD duplication and replication services if you need 500 or more copies of a title. The company can also provide warehouse and other fulfillment services.

    As for marketing and promotion of your title, for an additional 5 percent, the CustomFlix Online Promotion Program makes your title available in their Video Shop, Amazon zShop store, Yahoo! Store, eBay Store, and Froogle, as well as on search engines such as Google, Yahoo, AltaVista and others. Still, Geyer says titles sell better when producers actively promote their titles through efforts such as working with complementary partners and online sites, effective use of PR, getting promo materials to the right event, and search-engine marketing.

    The Amazon Advantage Program (www.amazon.com/advantage) provides an alternative distribution and fulfillment channel while still leaving producers all of their rights. A $29.95 annual fee gets your title listed on Amazon.com, Borders.com, Target.com, CDnow.com, and VirginMega.com. Amazon also handles all fulfillment, customer service, and billing duties.

    After you submit an online application, Amazon chooses whether to accept or reject your title. If approved, you get an email asking you to send them two to five packaged, sale-ready copies of your title on VHS or DVD for stocking at their distribution center. The Amazon Advantage Program monitors your sales and keeps your inventory in check, automatically requesting more copies from you once it starts to run low. You can monitor your sales status and inventory level through AmazonÕs online Account Maintenance Center.

    You suggest a price, but Amazon has the final say in determining the sales price of your title. Amazon keeps 55 percent of the final sales price, so if you sell 15 items at $10 each, youÕll receive a check for $67.50. You must adhere to specific shipping rules and costs when sending your copies to Amazon (or if Amazon needs to ship something back to you). You remain responsible for all duplication and packaging fees incurred in duplicating your DVD or VHS title. But everyone knows Amazon.

    411 Video Information (www.411videoinfo.com) isn’t a distributor, but rather handles all marketing and publicity of special-interest videos to various distribution channels, both domestic and international. Founder Leslie T. McClure says the company specializes in “taking specialized programming to niche markets and expanding the niche market to include additional mainstream markets.”

    A producer submits a completed title on VHS or DVD to 411 Video Information. McClure says they only accept programs that they feel they can successfully market. “We have developed lists in various specialized fields including health and fitness, children/family/parenting, cooking, music, and documentary.” For fees of $800 to $2000 per month, 411 Video Information prepares press and marketing materials of your title and contacts potential distribution outlets. Says McClure, “We make the contacts, send the screeners, negotiate the deals. The producers ship, bill, and collect money once the orders are placed.”

    The typical profit split between a producer and a distributor is 60-40, with typical contracts lasting 5 to 10 years. Distribution contracts may be exclusive or non-exclusive, and McClure says in most non-exclusive contracts the producer pays for the duplication of their titles. Fulfillment services vary too, as some distributors work on a flat fee while others charge for every order shipped or phone call made.

    411 Video Information also offers consulting for producers that want to learn the ins and outs of self-distribution. The company can also refer you to duplication companies and fulfillment that they feel offer fair and good services.

     

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