I've been thinking about this a lot lately and frankly, I'm damn sick of advertising. Do you think that advertising has had something to do with the fact that most movies and TV shows are crap? HBO was able to make ground-breaking content because they charged people for it instead of catering to advertisers. I've been an advocate for free media on the web for a while and I know from experience that it's REALLY hard to monetize digital media. On the flip side, I think the abundance of advertising in our lives is really detrimental to our culture in lots of ways. What it comes down to is this: if Amazon is able to offer a seamless and enjoyable experience, people will pay for it. iTunes anyone?
Marc Vermut
· 1 year ago
@Micki: Spot on: relieve a pain or headache in a painless fashion and it's worth money to people.
@Don: There will never be enough advertising money available to cover all distribution platforms of all content, so after the initial capital is exhausted a lot of these delivery mechanisms and content creators go away (or make cheaper, but hopefully not crappier, content).
BrianMojo
· 1 year ago
Hear hear! If you ask me, the real fad of the internet is "free.. but with ads." People will pay for quality content, so long as it's incredibly easy to pay. (Again, see iTunes) People may not pay for news, but the reason they keep going to the theaters (even if numbers are falling, Hollywood doesn't exactly look broke -- at least not financially) is because people are willing to pay for an experience. Advertising reduces the immersiveness and quality of any experience, especially an experience that should be as encapsulating and engaging as a film.
Can you point me to some articles talking about the success of movies on Hulu? I haven't seen anything about studios finding a cash cow in Hulu, especially for movies. On advertisements, shows are written specifically for commercial breaks, so it works, but I agree the commercial breaks on the movies often break the rhythm of the movie. Studios usually have to cut/edit movies for TV broadcast to accommodate this. Personally, if I plan to watch a relatively new release, I'd really like to watch it without any advertisements (overlay or breaks).
I think a fee-based streaming model can work really well, and really well for Amazon. They've already mastered payment systems, and with the release of the mp3 store, they showed they can handle small but frequent purchases with ease. While I can't speak to the quality of the streaming service, I'm expecting their payment system to be flawless.
Giacomo
· 1 year ago
I want to add also a couple of advantages free streaming coupled with commercial advertisement can bring. 1. sellers will know exactly how many machines/people watch that movie and the related commercials. While broadcasting by non-cable TV this is not possible: there are some systems linked to the TV that give the TV broadcaster some kind of feedback based on some radio signal, and people asked to use these machines are selected to be statistically representative, but this system seems just a stone wheel compared to the feedback system managable by servers. Server know the excact number of machines connected to them, and also from where they are connected!! 2. But there is still more... if users allow the company to manage their personal data, like age, or interests etc., in order to better tune the spots this will be the Holy Grail of advertisement: they will not only know how many people watch the movie but they will be able, for people that have given permission, to transmit just a selected set of commercials personalized upon age, interestes, etc. This means to multiply the value of any single spot because you are increasing the efficiency of it, and this means the possibility of making the same amount of money with less spots and less noise for the audience!
carpeweb
· 1 year ago
Don,
Your entire post seems to be based on what you want. I want a lot of things; that doesn't mean I think they're going to happen or even that they are compelling for others to want. We all like free things, but someone has to pay. You don't point to a credible and viable revenue source for "free" streaming movies. We all hate advertising (except when we don't); but, it's how we pay for "free" tv and similar content.
Justin
· 1 year ago
Hey Don,
Not to be rude but it sounds like you don't know much about internet advertising beyond the "I get free stuff because there are ads" mentality. You write:
"can you imagine the advertising revenue the service could generate from it?"
Let's not imagine, let's actually look at some numbers. The industry standard metric is CPM or eCPM in the case of Pay Per Click/Pay Per Action. Sites with highly targeted audiences such as LinkedIn can get CPM rates of $20-80. So for LinkedIn to earn $80 1000 people have to view an ad. And most sites couldn't even dream of an $80 CPM, they would be happy with a $2-$5 CPM rate. Compare that to a movie getting $9 per ticket purchase, one purchase equates to one impression therefore this is an effective CPM of $9,000 a movie studio would be idiotic to eschew ticket prices for advertising revenue. We can also examine the DVD market. Each DVD costs on average $20, let's assume a whole family of four makes use of the DVD so we will spread the cost out among the whole family, making it's value per person $5, multiply that by 1000 and you have an effective CPM of $5000. Again, ads aren't going to get anywhere near this rate.
Sorry dude, it just aint gonna happen sooner or later you're going to have to start paying for things.
Guest
· 1 year ago
Don, I fully expect a future write-up explaining why free, advertising-supported Tempur-Pedics are a great idea.
Rob
· 1 year ago
I hate to jump on the bandwagon here, but my first thought when reading this was channel conflict. Now, I don't claim to understand the ins and outs of how movies are distributed but I have to imagine that as a movie house, I make a decent sum of money by selling movies (royalties) to blockbuster et al. I'm not going to be really gung ho to start a service that directly competes with my customers...
Movies cost an enormous amount of capital to make. I don't have this impression that distribution is the primary cost associated with the ticket price I pay.
To echo what others have said, people will pay for value.
Ling
· 1 year ago
Wat's going to happen, sooner or later, is that the studios will come together and offer a place to watch streaming movies online. And they'll keep a tight lid on it, but the movies offered will probably be much betetr than what anything a third party could offer.
ManoDogs
· 1 year ago
All of these are valid comments (except those that are spam), the caveat here is the high mark-up of DVDs and similar media.
A successful model - pay or advertised - could be made, so long as everyone understands the returns are going to be, necessarily, lower than those of the box office and traditional home markets. The trade-off is that it's streaming media.
I was going to say, if someone wants to save it to their HD for that price, it's their disk space, but as HDs are both getting bigger and costing less, there is a whole other market: pay for play or pay to save. The price will be cheaper, the returns smaller, but the customer is not getting all the "extra" features they get with more traditional media (covers, extra features, etc.).
Yet another model could be culled from charging extra for these very features - $1.00 more for commentary, $1.00 for each additional scene, etc.
It can be done, it's simply a matter of getting the executives to understand and accept lower returns.
Justin
· 1 year ago
Why in the world should the movie execs accept lower revenues when the market clearly indicates they can get higher for the current distribution method? It just doesn't make any business sense, streaming just for the sake of streaming isn't a valid argument.
Devasish
· 1 year ago
Streaming movies will pale in comparison to the big screen we see.
Very few people will substitute streaming movies with the experience they have while watching movies on big screens.
Betzi
· 1 year ago
I'd rather pay a few bucks and not watch commercials. Why can't they offer both? Not everyone wants the same thing.
carpeweb
· 1 year ago
Betzi and ManoDogs point to some real alternatives -- not because wishing makes it so, but because the economics might be attractive to both producers and consumers.
ManoDogs, I'd say that returns might not necessarily be lower, precisely because of the incremental revenue that some audience members might yield. Both you and Betzi are exploring the possibility of tiered offerings. "Free" could have annoying ads interspersed throughout a production. Several variants of premium service might get consumers to cough up some coin. Directors' cuts, interviews with the cast, bonus scenes ... that list could be quite long. For a cult film that might not have a lot of standard box-office revenue, I'd even venture to guess that this type of model could provide a higher return.
But I think we all agree that it's nonsense just to berate producers for trying to make a buck, even if they already make a lot of money through other channels. The key is to create ways that producers can make money while adding to audience enjoyment. That's what we're generally happy to pay for -- more entertainment.
The Count Rob
· 1 year ago
I'm so tired of this Commie's posts. All Don's headlines begin with something like: "It sucks that I have to PAY for stuff. Like that iphone app store. All those EVIL programmers are selling their apps for MONEY, it's like so unfair."
Look at how you contradict yourself:
"...can you imagine the advertising revenue the service could generate from it?"
And then...
"Playing them before the movie starts is a good idea, but I’m not too fond of dropping them in-between."
So how are they supposed to make all that money without actually putting the ads in the movie? See you don't even know what you're talking about, and you've obviously never used an advertising business model.
Freeloader, living in his parent's basement. Everything should be FREE, eh Don?
All Comments
@Don: There will never be enough advertising money available to cover all distribution platforms of all content, so after the initial capital is exhausted a lot of these delivery mechanisms and content creators go away (or make cheaper, but hopefully not crappier, content).
I think a fee-based streaming model can work really well, and really well for Amazon. They've already mastered payment systems, and with the release of the mp3 store, they showed they can handle small but frequent purchases with ease. While I can't speak to the quality of the streaming service, I'm expecting their payment system to be flawless.
1. sellers will know exactly how many machines/people watch that movie and the related commercials. While broadcasting by non-cable TV this is not possible: there are some systems linked to the TV that give the TV broadcaster some kind of feedback based on some radio signal, and people asked to use these machines are selected to be statistically representative, but this system seems just a stone wheel compared to the feedback system managable by servers. Server know the excact number of machines connected to them, and also from where they are connected!!
2. But there is still more... if users allow the company to manage their personal data, like age, or interests etc., in order to better tune the spots this will be the Holy Grail of advertisement: they will not only know how many people watch the movie but they will be able, for people that have given permission, to transmit just a selected set of commercials personalized upon age, interestes, etc. This means to multiply the value of any single spot because you are increasing the efficiency of it, and this means the possibility of making the same amount of money with less spots and less noise for the audience!
Your entire post seems to be based on what you want. I want a lot of things; that doesn't mean I think they're going to happen or even that they are compelling for others to want. We all like free things, but someone has to pay. You don't point to a credible and viable revenue source for "free" streaming movies. We all hate advertising (except when we don't); but, it's how we pay for "free" tv and similar content.
Not to be rude but it sounds like you don't know much about internet advertising beyond the "I get free stuff because there are ads" mentality. You write:
"can you imagine the advertising revenue the service could generate from it?"
Let's not imagine, let's actually look at some numbers. The industry standard metric is CPM or eCPM in the case of Pay Per Click/Pay Per Action. Sites with highly targeted audiences such as LinkedIn can get CPM rates of $20-80. So for LinkedIn to earn $80 1000 people have to view an ad. And most sites couldn't even dream of an $80 CPM, they would be happy with a $2-$5 CPM rate. Compare that to a movie getting $9 per ticket purchase, one purchase equates to one impression therefore this is an effective CPM of $9,000 a movie studio would be idiotic to eschew ticket prices for advertising revenue. We can also examine the DVD market. Each DVD costs on average $20, let's assume a whole family of four makes use of the DVD so we will spread the cost out among the whole family, making it's value per person $5, multiply that by 1000 and you have an effective CPM of $5000. Again, ads aren't going to get anywhere near this rate.
Sorry dude, it just aint gonna happen sooner or later you're going to have to start paying for things.
Movies cost an enormous amount of capital to make. I don't have this impression that distribution is the primary cost associated with the ticket price I pay.
To echo what others have said, people will pay for value.
A successful model - pay or advertised - could be made, so long as everyone understands the returns are going to be, necessarily, lower than those of the box office and traditional home markets. The trade-off is that it's streaming media.
I was going to say, if someone wants to save it to their HD for that price, it's their disk space, but as HDs are both getting bigger and costing less, there is a whole other market: pay for play or pay to save. The price will be cheaper, the returns smaller, but the customer is not getting all the "extra" features they get with more traditional media (covers, extra features, etc.).
Yet another model could be culled from charging extra for these very features - $1.00 more for commentary, $1.00 for each additional scene, etc.
It can be done, it's simply a matter of getting the executives to understand and accept lower returns.
Very few people will substitute streaming movies with the experience they have while watching movies on big screens.
ManoDogs, I'd say that returns might not necessarily be lower, precisely because of the incremental revenue that some audience members might yield. Both you and Betzi are exploring the possibility of tiered offerings. "Free" could have annoying ads interspersed throughout a production. Several variants of premium service might get consumers to cough up some coin. Directors' cuts, interviews with the cast, bonus scenes ... that list could be quite long. For a cult film that might not have a lot of standard box-office revenue, I'd even venture to guess that this type of model could provide a higher return.
But I think we all agree that it's nonsense just to berate producers for trying to make a buck, even if they already make a lot of money through other channels. The key is to create ways that producers can make money while adding to audience enjoyment. That's what we're generally happy to pay for -- more entertainment.
Look at how you contradict yourself:
"...can you imagine the advertising revenue the service could generate from it?"
And then...
"Playing them before the movie starts is a good idea, but I’m not too fond of dropping them in-between."
So how are they supposed to make all that money without actually putting the ads in the movie? See you don't even know what you're talking about, and you've obviously never used an advertising business model.
Freeloader, living in his parent's basement. Everything should be FREE, eh Don?