Learning through experimentation

March 13, 2014
posted by sheric

Today’s guest post is from one of my G+ community members, Scott McMahon of Arrowinn Entertainment. Scott recently released his ultra low budget film THE CUBE by hosting a local cinema release and via Vimeo On Demand. He is sharing some of what he is learning so that other ultra low budget filmmakers will have a better understanding of what it takes to use and make revenue from digital distribution sites. I think his experience is valuable because more and more emerging filmmakers are experimenting with content, form and release strategies. The experimentation is not likely to lead to significant paydays, but it will enable those starting out to gain useful skills for subsequent projects.

 

So, I made this feature film for $500 with no crew.  Yep.  No crew.  How?  Well, you simply set the camera up on a tripod and jump in front of the camera and act.  And for the shots where I wasn’t in front of the camera, I took the camera off the tripod and moved it around.

My film is called, THE CUBE. If you’re curious to know what it looks like, click on the image below:

experimentation with The Cube

FILM FESTIVALS?

Since this film was made for so little, I decided to forego paying any festival fees and keep the money to be used on any future marketing efforts. With film festivals, you’re never guaranteed that you’ll get in anyway … and it takes forever to know if you’ve even gotten accepted.

Instead, I decided to reach out to some of my pseudo-famous friends and asked them if they would give me a testimonial … much like authors do when they are launching a new book. I figure I would just use these blurbs as my replacement for the laurel leaves we see plastered on every sales poster of other indie films.  Instead of slapping a laurel leaf graphic of a no-name festival on my poster, I was able to use these blurbs:

“A short, sweet, and thoughtful indie.  Engaging and humorous.”  Bryce Fortner, Director of Photography, Portlandia 

“A great example of no-budget filmmaking.”  Randall Jahnson, Screenwriter of “The Doors” and “The Mask of Zorro” 

WHY VIMEO ON DEMAND?

Since I didn’t have any formal crew to make this feature film, I never took any proper production still photos.  A super NO-NO, if I was going to seek out a distribution deal. On top of that, it was made for $500!  How much extra cash did I have to put into the deliverables and marketing … Nil.

I knew this lil’ movie would end up on some sort of digital distribution platform and I would have to handle the marketing for it all by me-self.

I chose Vimeo On Demand, because:

  • Filmmaker earns 90%, Vimeo takes 10%
  • Vimeo didn’t require me to have a 5.1 surround mix
  • Vimeo didn’t require me to have E&O insurance
  • Vimeo didn’t require me to have closed caption or subtitles added

Essentially, Vimeo just accepts your standard HD H264 file and lets you handle the marketing.  It’s just a simple video hosting service with some embedded features that allow you to sell your film in your own way.

Now, there is a catch!

Vimeo On Demand requires that you sign up and pay for their PRO plan, which will cost you $199 annually.  That was nearly half my budget!  Haha.  Thank goodness for birthday gifts ;-) In addition, I have other plans with the PRO version of Vimeo, so I decided to go for it!

BENEFITS OF DIRECT DISTRIBUTION 

Generally, when you sign over your film to a distributor, there are some additional things that you will need to provide (as mentioned above):

  • E&O Insurance ($7,000 – $10,000)
  • Copyright Fees ($35 – $100)
  • Deliverables (Your film mastered with separate M&E Tracks) [ed note: see my sample list here]
  • Production Stills
  • You will sign away the rights to your film for 15-20 years (generally)
  • You will only receive whatever advance the distributor will grant you, forget about any promise of backend profiting … this almost never happens.
  • It’s not uncommon to see film advances of only $5,000

Now, imagine if you made a film for $50,000 or $1 million?  Will $5,000 advance be enough to satisfy your investors?  Probably not.

With a $500 feature film, there is almost no risk involved … it’s so damn cheap!  Here are some benefits by selling your film on your own through direct distribution:

  • No E&O Insurance Required (Just be sure that you have your legal documents in order and of course, consult with a “real” lawyer)
  • Use Creative Commons Licensing (Free)
  • No Deliverables Required (Just upload your file like you would on YouTube)
  • You keep the rights to your film … forever!
  • All profits you earn from direct distribution go directly to YOU!

DRUM ROLL PLEASE … 

Okay, so I made this feature film with no crew and the marketing and sales effort is no different.  It’s just me.  No sales staff, no marketing team … just me.

I threw a local networking event in conjunction with the premiere of THE CUBE and it earned a small profit of $128 after the expense of the theater rental, posters, mugs etc.

You can read more about this theatrical premiere at this LINK.

So, would VOD sales prove any better after a month in release?

Here’s the actual screen grab of my total sales:

The Cube Vimeo screengrab

THE SALES ARE IN! 

$150 Profit for one month of being on Vimeo On Demand. Let’s add that with the total from the theatrical premiere:

  • $128 Theatrical
  • $150 Vimeo On Demand
  • $500 Production Cost of Film
  • $0 Marketing Budget (All sweat-equity)

TOTAL REVENUE SO FAR:  $278 

That’s over half my film’s budget!  Haha.  Yes, it’s miserable when you think that movies are supposed to be racking up profits of $100,000 or $10 million … the idea that independent film can only earn $278 might sound “sad,” but I am also using these methods to experiment with this film, using it as a test run for different online marketing techniques for use on future projects.  There is an important aspect of the “launch” for any product that sees a surge in sales.  I plan on using each new revenue outlet as a potential “launch” vehicle. Again, when you’re solo-preneuring it, you don’t have the infrastructure in place to do a mass launch. You have to piecemeal the process.

Look at this screen grab from Box Office Mojo.  These are the movies ranked from #37-#46 on the list of theatrical releases for the month of February 2014.

boxofficemojo statistics

If I compare THE CUBE’s performance to that of #46 DEMI-SOEUR’s performance of only $943 … and that’s only reporting the box office returns.  The actual revenue back to the distributor, Rialto Pictures, will only be about 45% of this total. The exhibitor keeps the rest. Then Rialto will take out their fees and expenses and if a sales agent was involved in making the distribution deal, they will take out the same. There is no backend profit to share with the filmmakers yet.

At THE CUBE premiere, I actually brought in $435 Gross, so comparatively … I’m doing okay!

CONVERSION RATE 

In online marketing and sales, it’s all about the “conversion rate”.

This essentially means, that for every visitor or hit to your website, how many people actually buy your product? If you look at the number of plays THE CUBE trailer, it amounted to 482 plays.  From those trailer plays, 26 purchases were made.

  • 482 Trailer Plays
  • 26 Purchases
  • 18.5% Conversion Rate

Believe it or not, if an online marketer were getting a 1-2% conversion rate for their efforts that would be considered a normal return.

I was able to pull in 18.5% conversion rate, so I have to consider this a major success.

FAST, CHEAP, OR GOOD 

I’m only a month into this direct distribution campaign.  There is a saying in production that we used to tell clients ….

You can have it FAST, CHEAP, or GOOD … Pick Two.

So, I made this movie pretty cheaply, and I hope it’s fairly good … that means my marketing effort cannot be FAST.

Slow and steady as the tortoise taught us when we were kids … And that’s what I plan to do with this film product … go sloooowww.

DEPRESSED? 

Are these numbers depressing?  Hopefully they’re giving you a reality check.

I should preface that I didn’t build any sort of audience prior to making the film … simply for the reason that I wasn’t sure if I could even make this thing without a crew.  It wasn’t that I couldn’t find a crew, it’s just that I’m an a$$hole!  Haha.  Just kidding … at least I hope that wasn’t the reason.

Anyway, I’m hoping that other filmmakers can see why building an audience prior to release is so important.  If I had sunk even $10,000 into this film, that’s still a lot of cash to lose so make sure when dealing with higher budgets, an audience is going to be in place.

FUTURE NUMBERS

I’m encouraged by all of this, as I’m learning to apply all sorts of different online marketing strategies to drive people to watch the film.

I can see the numbers now. If I’m going to make any sizeable profits, I have to have a larger reach and impressions in order to maximize the conversion rates.

If I hope to make at least $1,000 in profits, I would need to have a reach of over 2,000 impressions, just to get the standard 1-2% conversion rate.

So, if you’re hoping to make $100,000 in revenues from your film, and a 1-2% conversion rate is normal, your film will have to at least reach about 2 million people/impressions.

Remember, we’re peddling on average a $5 online product.  This is not some piece of software that can be sold for $100-$200 a pop.  It’s gonna take a lot of sales to make up for such a low price point.

GET INSPIRED!

If you’re going to venture into making and selling a film directly online, be ready to have a huge infrastructure in place … or keep your budgets so small that it won’t matter if you don’t make your money back.

If you want to get INSPIRED by what can be made for so little … feel free to support indie film and check out:  THE CUBE-A SUPERNATURAL SUSPENSE MOVIE

You are a rock star if you’ve taken the time to read through this post! If you found this valuable in anyway, feel free to follow me over at www.filmtrooper.com

Thanks so much!

-SM-

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