Monday, July 10, 2006

The Great White Hope of Indy Animators: Part 2a

In my first post on this topic I covered why the ad-revenue sharing system online isn’t much to put your hopes in as an indy animator. The reason being that in they eyes of businessmen content has no direct value- thus the need to share any revenues with content creators is next to none. So the conversational logic drifted to the idea of having direct consumers of the media pay for it since they must value it if they watch it.

I’ve been a person who has made some animated shorts and has been blessed to have them seen by tens of thousands of people over the years. My latest short “Lunch” has been viewed online about 80,000 times when you combine all the various places it’s been hosted, with who knows how many viral viewings. Not great by Hollywood numbers, but not shabby for some schmuck in a spare bedroom. Imagine if there was a system whereby I could expect some money for each of those online viewings? Or maybe even just a portion of them? Maybe it’s not enough to make a decent living from, but it’d be enough to get me seriously thinking about making more films to show, not less. The question that remains is: Will end customers pay? They obviously value the content- they watch it. Can we measure this value in dollars and cents?
When thinking of these things we mustn’t ignore a fundamental aspect of the world of business: ultimately it is the buyer who sets the price. The same holds true for media content. Suppliers can try to elevate prices, but sooner or later things settle into a price point where people feel there is real value. There are several major areas of content, so let’s try to find some end user value trends for each of the following: TV live action, TV animation, feature film (live action & animated) and music.

Ever since its inception as a medium TV content has been 100% free- if you’re willing to watch it on the network’s schedule that is. TV content has had no end audience defined monetary value. Cable TV has a cost, but when you’re paying your cable bill you’re paying for open gateways to choices, not specific shows usually. However recently there has been a measurable revenue stream for TV content- DVD sales. Let’s get some numbers:
The Simpsons is arguably the most successful animated TV franchise in all of history. It’s content is widely available (for free) to end user audiences via vast syndication all across the world. Yet it still sells like hotcakes in DVD format. A typical season of The Simpsons on DVD has a street price of about $35.00. That’s $35.00 (3500 cents) for 550 minutes of content. That comes out to an end user audience value of roughly $0.06 per minute of content. (3500 cents divided by 550 minutes equals 6.36 cents per minute).
In the U.S. right now there isn’t a hotter TV show than LOST. The DVD cost for the first season of LOST is about $60.00. Let’s assume we’re paying for just the show content (not counting extras, commentary and other ‘value adds’). That would be 26 episodes at 44 minutes each. (A season of shows in the U.S. is 26 weeks, an hour long program is 44 minutes with 16 minutes for commercial breaks). That’s 1144 minutes for 6000 cents, or roughly $0.05 per minute of content. So the average market value to end user consumers of top rated TV content (ie: what they’re willing to pay to own it and watch it at their leisure) is about 5.5 cents per minute of content.
Now let’s look at feature films. A feature film has a typical in-theater cost of $9.00 per ticket. An average runtime for a film is 110 minutes (more or less). So for the big surround sound, big screen, buttered popcorn version of the experience the end consumer audience member is willing to pay about $0.08 per minute of content, but it’s fleeting- you can’t take a copy of it with you out of the theater.
That same film in DVD sells for $17.00, resulting in an end user value of $0.15 per minute, the highest value given so far for content. That is until we get to online short films. A short film bought on iTunes for $1.99 that is 6 minutes long yields a nice consumer value of about 33 cents per minute. Many of these shorts are available in other venues in higher resolution, yet they still sell well. Pixar had sold 250,000 copies of their shorts within the first month or two of putting them on iTunes.

cont'd in part 2b....

1 comment:

Keith Lango said...

original comments here...