Amazon.com’s CreateSpace service offers a turn-key sales and distribution model with no up-front fees – at a price.

Getting your movie out to the home-video market is never easy, especially with little startup capital. Historically, the small-scale independent filmmaker working outside the studio system has been stuck between a rock and a hard place when it comes to the home video market. On one hand is the traditional distribution method, where you try to get a big-name distributor or wholesaler interested in buying your movie and acting as a middleman between you and the Blockbusters and Wal-Marts of the world. With traditional distribution, your profit margins are thin after the distributor and the retailer take their cut, but hopefully you sell enough units to make it worth your while. Getting the attention of a major distributor is very hard, and even if you manage to do that, you’re locked into what is essentially a consignment-based business model designed for the distributors and retailers to make money with little risk. Content creators don’t make very much, and they take the fall if things go sour. It’s a system that sticks the guy at the start of the supply chain (you) with the short end of the stick if the movie doesn’t sell.

On the other hand, you have the direct sales method, where you do all marketing and fulfillment yourself. Chances are the big retailers won’t touch you, but at least this way you have total control. You’re doing most of your selling to specialty outlets and directly to consumers, which means that you get to keep a larger portion of the proceeds from each sale. However, you have to handle payment processing, shipping, customer service and so on by yourself, and on average you’re not going to move nearly as much product as you would if you went with a major distributor.

Both models require an initial outlay of funds over and above what it cost you to actually make the movie. DVD duplication isn’t free, after all. While a really small-scale DIY operation might be able to get away with duplicating-to-order, that approach puts a hard upper limit on growth, and losing out on economies of scale really eats into the bottom line.

eCommerce Levels the Field

The rise of the Internet as a sales channel has done a lot to level the playing field for the individual filmmaker. It’s still nigh-impossible to crack a major distributor, but, like mushrooms, many small companies have sprung up seemingly overnight, willing to take on some or all of the burden of the direct sales distribution model. For example, trendy indie darlings Filmbaby (www.filmbaby.com) are happy to handle ordering, fulfillment, customer service and all of that other annoying stuff, plus a web storefront, in exchange for a $39.99 setup fee (per title) and a subsequent $4 from each DVD sale. Many duplicators will provide warehouse space and shipping functions. If you combine that with a Filmbaby-style fulfillment provider, you never even have to lay hands on your own outgoing product.

Of course, this all assumes that you have the startup capital necessary to dupe a few hundred DVDs, fit them with covers and cases and rent a warehouse space to put them in. What if you don’t? Making a movie is costly enough – is there any way to sell it to your target audience without bleeding your bank account even whiter?
Yes, there is. Amazon.com, the 900-pound gorilla of the Long Tail business model (see sidebar, below) has a solution for you.

CreateSpace: Copy on Demand

Amazon.com’sCreateSpace service (www.createspace.com – recently renamed from CustomFlix to better reflect its product selection) is an excellent distribution solution for the small-scale professional or advanced hobbyist filmmakers who want to make their movies available to the internet at large. CreateSpace’s self-stated purpose is “to profitably connect content owners with a worldwide audience of millions.”

Here’s how it works: you sign up with CreateSpace and send them a copy of your film in one of a variety of pre-approved formats. If you already have a DVD master, you can use that; otherwise, CreateSpace offers digitization and DVD mastering services. You also send them your cover and disc face artwork. They send you back a proof, you approve it, set a sale price and… that’s it! Your film is available for sale online, and you have the option to list it on Amazon.com, the internet’s largest film retailer. Anytime a customer buys your movie online, CreateSpace burns a copy, prints the packaging and ships the DVD (or HD DVD, with Blu-ray Disc coming soon) to its destination. Or, if you prefer, you can make the film available as a download – no physical product required.

What’s the Catch?

Of course, there’s a catch: In exchange for handling duplication, authoring, warehousing, fulfillment, customer service and the web storefront, CreateSpace takes a cut from every sale (just like traditional distributors do, though with much less risk on your part). It takes a flat $4.95 off the top of every DVD that you sell, plus anywhere from 15% to 45% of the cover price of your DVD (depending on whether your product is listed on your own storefront or on Amazon.com.)

Let’s say you’re selling a $20 DVD and choose to list it on Amazon.com. If someone buys a copy from Amazon, CreateSpace takes $4.95 + 45% of $20, or $13.95, leaving you with $6.05 from the sale of your own movie. Selling it on your own CreateSpace storefront is significantly cheaper, netting you $12.05.

Is It Worth It?

Whether or not taking that sort of hit to your bottom line is acceptable is something you’re going to have to answer for yourself. 45% + $4.95 is a lot of money, but doing your own duplication and fulfillment is a lot of work.

While CreateSpace may be a major player in the market, it isn’t alone. Sites likeLulu.com offer a very similar range of services, and the competition is starting to heat up. It’s to your advantage to do the math, read some independent testimonials and see what makes the most sense for you.

No matter how your individual numbers come out, CreateSpace and its ilk give independent video producers seeking sales channels an exciting new option, and having options is never a bad thing.

Mike VanHelder is an IT professional with a sideline in film production and a great love for Italian zombie movies.

Side Bar: The Long Tail

The Long Tail theory popped up various times on the internet prior to Chris Anderson’s making it largely popular in the October 2004 issue of Wired Magazine. Long Tail refers to the business model used by online media retailers like Amazon or Netflix. Unlike brick-and-mortar stores, which have a limited amount of room to display and sell products and must therefore pick only the biggest sellers for their shelves, online retailers can afford to carry an extremely wide inventory of products. They may not sell many copies of the more obscure films, but they have more small, obscure films (the yellow portion of the graph, called the long tail) than blockbusters (the green portion of the graph, called the short head).

Think of it this way: A movie like Star Wars may sell a hundred times better than, say, Alien Zombie Invasion IV, but, for every Star Wars out there, there are a hundred small movies like Alien Zombie Invasion. Amazon’s bread and butter is selling one or two copies of each of those hundred small movies, rather than relying on Star Wars to carry its bottom line. That’s why it’s interested in carrying tiny films by independent filmmakers, and why the CreateSpace program makes sense for it.

The Videomaker Editors are dedicated to bringing you the information you need to produce and share better video.

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