To sell directly, or to distribute? That is the question.

Let’s say you have an idea for a video that you think people will pay to see. Or you’ve created a video
program and you want to sell it. How do you go about getting your video into the hands of those buyers
and, more importantly, making money in the process?

You have two basic choices right off the bat. You can try to sell the idea or the video directly to
your customers, or you can work out a deal with a distributor. Selling directly gives you more control and
potentially a higher percentage of profit, but working with a distributor is easier and may put more money
in your pocket in the long run. Which is better? You’ll have to decide for yourself after you learn a few
facts.


What’s it All About

Why are you trying to produce and sell a video? It’s a lot of work, so you must have a motivation that
will keep you at it for a long time. You can do it for fame, fortune, service to humanity, or any of a number
of reasons, as long as it keeps you going.

To determine what chance your video has in the marketplace, you must first ask yourself a few
questions.

First of all, what is it? Is it entertainment or news or a how-to video or what? Define in your mind what this thing is so you can tell other people quickly and
clearly.

Does it need to be a video? Videos are expensive to produce compared to writing a book or even
producing an audio tape, so be sure your product needs to be in this format.

How versatile is your video program? Are people going to look at it once and then never
think about it again, or is it like Disney’s The Lion King that gets viewed over and over?

Is your tape going to sell? Who knows? It might.

What does it do? Put the kids to sleep? Make people laugh or cry? What makes it special or different? Is
there new information in this tape that your target market can’t find anywhere else? Why should someone
care to see it? What makes this tape better than anything else out there? Your audience wants to know the
answer in advance.

They also want to know how and where they can find your tape. Is it on the shelf at Blockbuster,
or do they have to knock on your door and ask you for it? Assume that people are lazy. They’re not going
to go out of their way for this thing, but if you make it easy for them… Why would anyone want to buy it?
If you can’t think of three quick answers, you’d better re-think your product.

Another question to consider is: how good do the production standards need to be these days?
America’s Funniest Videos have been running low-quality stuff for years–from a technical standpoint. But
it’s the content that’s pulling in the audience. The answer is: you should have the highest production values
you can afford, which means the best actors, the best equipment, etc.

Some distributors won’t touch your product if it doesn’t meet their standards. For example, an
independent producer recently made a video called Scary Stories for Kids. It had high production
value, but the producer couldn’t distribute or sell it because it wasn’t shot on film. Period. End of story. So
before you shoot your video, you must decide where it will be seen and who will distribute it. If you plan
to air your video on broadcast television or a cable network, you must have a qualified technician check it
to make sure it passes minimum broadcast standards. If it doesn’t, you might or might not be able to fix it
by making a dub through a time base corrector.

In terms of content, will people pay to see your video? And will they be satisfied after they view
it, or will they demand to get their money back?

Have you thought this through? Are you still sure you want to try to sell your video? If you are,
let’s keep going.

Finding an Audience

Who makes up your target market? Will every man, woman and child in the world want to buy your
tape, or will it appeal only to a narrow audience, such as bass fishermen?

How do you find your target market? You might be able to find potential businesses that might
want your video by looking them up by Standard Industrial Classification (SIC) code. The SIC system was
developed by the U.S. Department of Commerce. The system classifies every business (also professions
and institutions) by function, and then assigns a numeric code to it.

There are ten major S.I.C. classifications: 01-09, Agriculture; 10-14, Mining; 15-17,
Contractors/Construction; 20-39, Manufacturing; 40-49 Communication, Transportation and Utilities; 50-
51 Wholesalers; 52-59, Retailers; 60-67 Finance, Insurance and Real Estate; 70-89, Services; and 90-99,
Government Offices. The list is then broken down even further. For example, number 7841 is Videotape
rental. At the public library, ask for a book with businesses-by-industry classification.

Sizing Them Up

How large is your target market? Is it made up of the whole world or just the bass fishermen of the
world? The larger the potential market, the more sales you can have, but the greater the cost to reach the
market. To reach the fishermen, you’d only have to buy an ad in a bass-fishermen’s magazine, but to reach
the whole world, you might have to run a commercial on the Academy Awards.

How much competition is there? Head for the public library again, and ask for The Video
Source Book
published by Gale Research, Inc. of Detroit. It lists all the videos produced and
distributed by major distributors. A careful reading will show you if anyone has used the name that you
want to use for your video or if there are similar videos to yours already on the market.


Advertising

Another way to reach your target market is by placing an ad in a magazine. How do you know what
magazines the folks in your target market are reading? You could look it up in the Standard Rate and Data
Service (SRDS) publication called Consumer Magazine and Agri-Media Rates and Data (Macmillan Inc.,
Wilmette, IL, 708-256-6067) which lists every darned magazine you ever heard of and thousands
more that you haven’t. Look up the general field–like fishing and hunting–and you’ll find all the
magazines (and other types of ad vehicles) that you can buy, such as Fishin’ Country’s Outdoor
Sportsman Magazine
. Reading the small type, you learn that in 1994, a 5″ x 7″ black-and-white ad
to run one time cost $3200. If you ran the same size ad twice, each one would only cost you $3100–quite
an incentive.

Where can you find an SRDS? Ask at the library; but if they don’t have it, any large advertising
agency will. Of course, the ad agency will charge you money to look at the SRDS, but that’s what business
is all about.


The Bottom Line

Can you make any money selling your video? You’ve got to make sure that your potential profits
aren’t eaten up by production, duplication, and distribution costs.

First, consider production costs. If you’ve already produced the show, you know what it cost you
to make. If not, make an estimate.

Next, consider dubbing costs. Most major cities have several businesses where you can get your
tape copied. Competition is fairly fierce, so decent prices are available. Remember, the more copies you
have made at the same time, the less each tape will cost.

Then consider advertising expenses. No matter how you decide to reach your target market–direct
mail, ads, TV–you must factor in the marketing cost, along with a dollar amount for your time.

Now compare your expenses with your projected sales. Consider, realistically, how many videos
you can sell. If your expenses are $5000 and you can only sell 100 tapes, then you’ll have to charge $50 per
tape just to break even. If you want to make $5000, then you’ll have to charge $100 per tape. Will anyone
pay this price? Will 100 people?

Your price can kill you. If you set it too high, you might scare people away. But if it is too low,
you can’t make any profit and you might as well stay home.

Creative Financing

Let’s say you have a great idea for a video but no video skills or equipment. You can try and talk a
video production company into creating your video for a percentage of the profits. It could happen.

You could sell percentage points in your video for so many dollars a piece to people who have no
creative say in the final product. It could happen.

Or you could do that bass-fishing video using only Acme bass-fishing boats, with the Acme
company paying all the costs.

Should you call in a consultant? If I haven’t scared you with all this stuff yet, you don’t need any
help. But if it sounds hopelessly complex, you might want to get some professional help. A pro could at
least tell you if you are taking the right steps.

Do-It-Yourself Distribution

How are you going to get your video into the hands of your target market? If you know exactly who
you want to reach, you could buy a list with all of their names and addresses and send them information
telling them what your product is and how to buy it. This technique is called direct mail.

Where can you get a direct-mail list? One source is the American List Council (1-800-252-5478).
Ask for a catalog and then look up your target audience, fishermen, for example. In ALC’s catalog, you’ll
see a list with 181,371 addresses of fishermen on it. You can purchase these addresses for $50 per
thousand, $150 minimum. The list of 181,371 fishermen would cost just over $9000.

You could sell through retail stores or let the customers buy direct from you. You could sell direct
to institutional markets, like schools, libraries and hospitals. You could hit the road and promote your
product on interview shows or sell it door to door. You could run commercials on television. You could try
to sell directly to businesses (if your product was a video on employee safety, for example). Or you
could do all of the above.

The question is: Do you want to do all this work? If you do, then you want to be a self-distributor.
If not, then you need to find an established distributor. If you don’t have lots of free time and deep pockets,
going with a distributor may be a good decision.


Do Judge a Video by Its Cover

What should your video’s packaging look like? If you’re selling through a retailer, the packaging
needs to grab the attention of customers and induce them to buy your video. If you’re selling through direct
mail, the packaging doesn’t have to be as fancy.

A full-color package created especially for a video product could easily cost several thousand
dollars, depending on its complexity. Who should design and print your packaging? Professionals.

When you try to sell your videos, the potential buyer may be more likely to buy it if someone they
trust says the video is worth watching. Send copies to publications that review videos, and you might get
lucky. There are several publications for librarians that publish reviews, such as Booklist,
American Library Journal, School Library Journal and others.


Fun Filled Fulfillment

Let’s say you’ve produced a video, but you don’t want to take orders from customers by phone any
time day or night, you don’t want to do the paperwork on credit card orders, and you don’t want to pay for
an 800 number. You want a place that already takes care of all those things–a fulfillment service.

If you work out a deal with a fulfillment service, this is how the arrangement works. If someone
wants to buy one of your tapes, they don’t call you, they called the service. The service takes the order,
sends the tape to the buyer, accepts Master Card and Visa, cashes checks when they come in from the
buyer, and, at the end of the month, gives you a report and a check for your profits less their charges. It can
be a fair and equitable arrangement.


Professional Distributors

Who are distributors and why might you need one? If you wrote a book, you’d try to sell it to a
publishing company like Random House. If the publisher accepted your book, you’d probably get an
advance and a percentage of the selling price later.

Video distributors are like book publishers. You sell them your video and the distributor pays for
all the advertising, gets the reviews done, pays for the dubs, creates the packaging and basically takes all
the risks. You get a percentage of the final profits, probably in the 10 to 20% range. It sounds small, but
think about all the work you avoid. Plus, instead of spending more money (on ads, graphic design and so
forth) you’re getting money back.

A distributor has a better chance to sell your video to a retail store or a chain like Blockbuster
because the distributor has a catalog of products to choose from. A retail store has just as much paperwork
if they buy one video from you or several from a distributor. It makes more sense for them to buy from a
distributor–someone they already do business with.

But just because you decide to choose a distributor to sell your video, that doesn’t mean it will
accept your video. Your video has to fit in with the other videos in their catalog. A good first step is to call
the distributor and give them a description of your program. If they sound interested, offer to send them a
copy to view. Then, if they like your show, the negotiation begins. There are books on negotiating such
deals. Go get one.

How do you find a distributor? Remember The Video Source Book mentioned earlier? In
the back of Volume Two there is a list of distributors. It’s 34 pages long, in very small type. Check your
library for the The Video Source Book. Maybe they’ll order it for you. The publisher is Gale
Research, Inc. 835 Penobscot Bldg., Detroit, MI 48226.

The Right Answers

It’s a great feeling to create a video and know that people want to see it. If they’re willing to pay to see
it, then you know they really want to see it. But without the right marketing, advertising and distributing,
they never will. Between your idea and your audience, there are numerous questions to answer. We’ve
given you the right questions; it’s up to you to supply the answers.

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