With great fanfare (i.e. I saw it on digg), Variety is trumpeting the long-awaited availability of niche indie movies on iTunes, starting with a snowboarding video from a small distributor.
Sounds great right? I've long complained about the anemic selection on iTunes (and its living room hardware organ, AppleTV) of movies for viewers and the total shut-out of true indie films, especially for small distributors and self-distributed projects. This should be an important moment, where Everything Changes.
Well, no.
Infuriatingly and disrespectfully, Apple is charging only $1.99 to own the video, while they charge $9.99 for Hollywood films. Granted, the snowboarding film is a 30 minute video and half-hour episodes of TV shows go for $1.99 on iTunes. So it looks fair on the face of it (half-hour = $1.99).
But here's the key: this is a niche video for snowboard fanatics that retails for $29.99 on DVD. Even in the bargain bin, that's a $9.99 DVD, not a paltry, slap-in-the-filmmaker's-face two bucks.
Keep in mind, we're not talking about video rentals here (i.e. 24 hour or 7 day VOD windows), but full and forever download ownership (as long as you stay within iTunes' tall walls). $1.99 pricing is fine for a limited viewing time, just as it is in the video rental world. But for ownership? Hell no, Steve Jobs.
If Apple intends to use mass market pricing on all niche content, indie producers are in deep shit. Mass market pricing means that they are pricing it at a rate that the average person might pay -- not a niche audience. Niche audiences are raving fans that devour niche products and thus are willing to pay a premium for quality content in their niche. If the premium is removed, then many indie producers won't be able to afford to keep working.
Assuming Apple keeps 30% (based on a non-scientific reading of the web speculation I've seen), then we're talking about $1.40 per sale going to the distributor (or filmmaker, when/if self-distributed films get on iTunes) -- assuming Apple doesn't take a larger cut from the little guys that don't have the leverage of the big distributors. If I had to bet, I'd guess they do because they can.
But let's pretend Steve Jobs is egalitarian and charges everyone -- big and small -- 30% to get onto iTunes.
So if your film costs $250,000 to make and market -- which is still a very very low amount but not unreasonable -- then you'll need to sell around 180,000 downloads on iTunes before you see a profit on such a film at $1.99 per download. That's a lot of viewers. Far too many for most small DIY films.
Based on our experience with Quality of Life, 180,000 viewers is nearly impossible. A fair estimate of the total number of viewers for Quality of Life is probably 20,000 to 30,000, based on our festival, theatrical and DVD numbers. And we spent much more than $250,000 to get there (production and distribution costs together amounted to well over $400,000 when it was all said and done -- and we're still spending), not counting thousands of hours of unpaid deferments and volunteer labor.
We worked our asses off for those 20,000 to 30,000 viewers in a way that few other filmmakers (or distributors) do -- ask anyone who is familiar with our story. It's just not easy to build an audience. It's the toughest part of filmmaking. And if it gets even harder to make our investors' money back, there will be less investment and fewer indie films and fewer professional (i.e. watchable) niche video projects.
In other words, iTunes' $1.99 indie film pricing is unsustainable. It's an indie killer. It's DIY poison. Plain and simple. It's a country club mentality in the age of democratic distribution: the big Hollywood films can charge $9.99 while the little people get paid $1.99.
Apple defenders may argue that these are additive sales -- these aren't people who would buy the DVD but new customers. New viewers at $1.99 aren't cannibalizing your existing DVD sales at $29.99. And if they like the film, they may turn into long-term fans and repeat customers for future works. Any exposure is good exposure.
This argument rings true today: hell I'd be more than happy for a million people to see Quality of Life for free, since it would give us an army of new word-of-mouth evangelists and thus help sell more DVDs at $19.95 each.
The problem is that the future of video distribution is video-on-demand. The DVD's day is behind us. If we accept $1.99 download pricing as a precedent, indie producers (and thus indie fans who want more better content) are screwed into the future.
Indie film cannot survive on two bucks to own a movie. Steve Jobs: stop the madness.
Read Variety's article here.
