Today’s episode is a big one guys. You need to brace yourself. The film economy is going through a major shift. It is as big as when we went from Black and white films to color or adding sound to movies. Movies industry is changing from a product-based business (DVDs, Blu-Rays) to a service-based business (streaming services).
Spotify and other music streaming services have devalued music down to basically worthless. What used to cost you $17.99 for one album of 1 or 2 hits and a bunch of songs you didn’t want now cost fractions of a penny from your monthly membership.
On Spotify, an artist needs around 337,000 plays to earn $1472 a month (the monthly minimum wage. Amazon Prime pays .6¢ per hour viewed. Streaming platforms are paying less and less and the indie budget seems to be going up and up. This business model is not sustainable.
Companies like Disney, Amazon, and Apple have a business model that will ensure their survival in the new film economy. Because their main business is not making movies. They use media as marketing vehicles selling other products and services.
Disney’s revenue is broken down like this 42% is Media Networks (licensing ESPN, Disney Channel, FX Networks, etc to cable and streaming platforms. 28% is Parks and resorts. 15% is studio entertainment and 9% is consumer goods and interactive entertainment. Disney generates $36,220,000 a day.
Disney+ is a HUGE sign on where the film industry is going. It has 10,000,000 subscribers so far. The direct to consumer model, killing the middle man (DVD manufactures, Cable channels, movie theater chains). The old way is dying and entire sub-industries are trying to hold on for dear life to the status quo. Movies theaters are struggling. At the American Film Market. I heard many distributors tell me the theatrical was not a growth industry anymore.
The devaluation of movies and series began with YouTube (the FREE version of Spotify for videos). A generation was raised on getting video content for free whenever they want. Movies and series fell into that well. Then Netflix gave us the ability to watch films and series as part of a small monthly fee. We no longer had to wait for weeks to watch the full seasons of our favorite show and suffer through commercials, we could binge an entire show in a few days, commercial-free.
Now with so many streaming services available why would you buy or rent a film if it will be available on a streaming service in a few weeks. The other big problem is the volume of content. Indie films (along with studio films) are being dumped into a marketplace in an ocean of content. It’s basic economics, the more quantity of a product that is on a shelf the shelf, the cheaper it is. It’s supply and demand.
How can an indie filmmaker survive in this new film economy?
Niche down and focus your work on a specific audience that you can reach or cultivate. Become a filmtrepreneur. Musicians have begun focusing on building themselves as a brand and using their music as advertising to sell ancillary products and get sponsorships. Indie filmmakers can do this as well when focusing on a niche audience. Piracy is a HUGE problem for all media industries, books, music, and movies. Steve Jobs said
“You can’t stop piracy, you can only compete with it.”
It’s much harder to pirate a t-shirt, course, niche service or sponsorship. You need to think outside the box. The business is changing whether you like it or not. If you do not change the way you think about filmmaking you will not survive.
You can sit there and complain. You can sit there and try to hold on to the good ol days. You can sit there and talk about how things should be or you can adjust and pivot your approach to making and selling your films or end up like Blockbuster Video, Toys R Us, Circuit City, Virgin Records, and a many other corporation corpses of companies and people who did not change with the times.
I do a deep dive and go farther into this in the podcast and share ways to make your film projects thrive in this new world. I hope this episode opens your eyes to the current marketplace for indie films.
#filmtrepreneur #filmmaking #filmmaking101