A few weeks back, I came to the realization that selling movies on the internet was no different than any other kind of eCommerce. So using the same forumlas I utilize to market my Action Packs, I plugged some numbers into an internet marketing ROI calculator.
I did this because the prospective investors in my life often ask how their money will be spent and recouped. Given the discriminatory nature of traditional distribution, I wanted to see what it would take to make internet distribution a viable sales channel. So I started crunching numbers with one assumption – if filmmakers can make the numbers work for each project, filmmakers would no longer have to rely on the glaringly flawed: “Gee, I sure hope we get into a film festival and garner a great deal” distribution strategy.
That strategy is a lottery. Not an investment. And it’s outdated.
So I got down to business and crunched some numbers. To my delight, I found some answers – but after publishing my article on internet movie distribution, many people kindly wrote to tell me that my numbers are incredibly unrealistic (and that is putting it nicely.) And I totally agree.
Looking at my results, it became quite clear that recouping even a measly 1M dollar budget by selling $20 dollar DVD’s in Amazon, relying solely on Pay Per Visit advertising at $.05 cents a visit, while, at the same time crossing our fingers for a 1% conversion would require that, firstly – you would need to sell 100,000 units (which allows for a 50% marketplace fee). And secondly, assuming a 1% sales conversion, to get these numbers, you would need 10,000,000 site visitors, visiting your website. (Yes, ten Million people) – which WE ALL AGREE is outlandish!
But in all of the debate, despite the negative responses, and the haters who took special care in hating me, and the seasoned producers who took meticulous care in ignoring the math and instead, decided to point out my spelling mistakes and poor use of grammar – Despite all the backlash – very few people (OK, pretty much nobody) even tried to offer a better solution.
So I decided to provide YOU with the chance to save the independent movie industry. If YOU can answer the following questions, you will help push indie filmmaking into the next era. In fact, YOU will help us make indie filmmaking a profitable business.
Are you ready to change the world of independent filmmaking forever – for the better? Here is your chance!
Here are the MAJOR Filmmaking Math Problems:
- With no promise of a traditional distribution deal, how do filmmakers justify a budget large enough to pay freelance day rates, while at the same time project enough direct DVD and VOD sales to recoup the initial investment?
- And assuming only 1% of your website visitors buy your movie, then how many people must visit your website so that 1% recoups your initial investment? (Don’t forget to include marketplace costs.)
- How much will this cost in advertising?
To possibly help you, I provide my formula (below) in hopes someone with more math experience can test and tweak until this starts to make sense. Here is what I have so far:
Movie Internet Marketing Formula
U = Unit Sales Goal.
A = Amount you pay advertiser per website visit.
C = Projected conversion percentage rate.
X = Number of Visitors Needed.
(X)C = U
EQUATES TO: X= ?
THEN: X(A) = ?