Re: [Videolib] Home use prices vs. PPR prices

From: Ben Achtenberg <ben@fanlight.com>
Date: Fri Aug 21 2009 - 15:22:42 PDT

A good, though fairly perennial, question, Alex -- but you need to adjust your parameters a bit. You would need to sell far more than ten copies at 1/10 the price to generate the same revenue. To sell those ten copies:

• You will have ten times the shipping costs,
• You will have ten times the personnel costs associated with taking and fulfilling those orders -- possibly more
• Your margin over the cost of the DVD and packaging will be far less -- even though the DVDs may be cheaper with quantity purchasing
• You will have more returns

In order to sell ten times as many copies, you will almost certainly need to reach out beyond the usual institutional buyers, which will mean substantially increased marketing costs per sale. There are at least two possible strategies that might achieve this:

• Direct more marketing to individual faculty, but purchases by individual teachers are more likely to be impulse buys rather than planned acquisitions, so will require repeat mailings or other contacts = greater cost per sale
• Direct marketing to identifiably relevant segments of the general public -- possible but, believe me, you can't afford it

Here's are two strategies which could probably generate sufficient $19.95 sales to match your present institutional sales without busting your budget:

• Find a theatrical distributor who will foot the bill for a highly advertised, widely attended, and well-reviewed national theatrical run
• Be Ken Burns

Hang in there...

Ben Achtenberg

My question is: if we distributors who charge a higher price for institutional/educational-use begin charging a home-use price for library collections, would the number of DVDs sold match the cost difference?  For example, would a DVD that costs $195 for university libraries but $19.95 for home-use *really* sell 10 times the amount if we discounted it??  At this point, at least for MEF, I dont think so.

The number of educational institutions is a finite number. And, as Jessica points out, very specific or niche titles will not be purchased by a high number of libraries, regardless of how much they cost.  Many are simply not interested.

MEF in unique in that we rely almost exclusively on the sales of our films to fund future projects (we receive very few gifts from individual donors and little to no grant support).  For us, a film cannot simply break even.  It must continue to generate enough profit to fund films that are in production right now. 

It would be great if we could sell our films for $20 or $40 bucks a pop, but I dont think it would work.  Without a stroke of great luck (Obama asking all Americans to buy a copy of Consuming Kids? Oprah listing Killing Us Softly 3as one of her favorite things?!?), I cant really see us distributing the high number of DVDs that we would need to keep us alive and producing new work.

Musings on a Friday afternoon&

Alex

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Received on Fri Aug 21 15:23:31 2009