by Zak Forsman – As the team here at Sabi Pictures develops our evolving strategy for distributing Heart of Now and White Knuckles in 2010, VOD and DVD have been strongly recommended by consultants like Stacey Parks of Film Specific as having the best potential for direct revenue. So I have been following VOD in particular, hoping it might fulfill its promise to supplant a deflating DVD market but also to give filmmakers an opportunity to share in its rewards.

This article was written in response to “Why VOD is Turning into a Profitable Avenue for Indie Filmmakers” published at Filmmaker Magazine. If you haven’t yet, please read it to put the following in context.

In a case study, Alex Holdridge (In Search of a Midnight Kiss) said he gets about 45¢ of each $6 sale. In his deal, Comcast keeps 60%, Rainbow Media (IFC’s parent company) splits the remaining 40% in half with IFC who charges a 25% distribution fee before splitting their cut 50/50 with the filmmakers. That leaves 7.5% of the original $6 for the filmmakers. However, IFC charges a $15,000 “digitization fee” that must be paid back out of the filmmakers’ cut before they start earning revenue.

BREAKDOWN

Comcast – $3.60
Rainbow Media – $1.20
IFC – $0.75
Filmmakers – $0.45 (after digitization fees are covered)

So as a filmmaker looking to cut down on unnecessary expenses and maximizing the money going into my own pocket, my questions are:

I own a post-production company. What are the digitization specs for VOD, so that I can do it myself? We deliver studio-level broadcast-quality masters for DVD and Blu-ray all year long so I’m certain I’m qualified to produce the required deliverables for a seemingly overblown $15,000 charge. But can anyone tell me what those delivery specs are? What codec or format we’re talking about for picture and audio?

Next question is, Alex Holdridge insisted he didn’t need a distributer to take his future films to VOD, so he could keep a substantial portion of the revenue – 40-50%. $2.40 to $3 is much better than 45¢. But has anyone actually done this? Is there precedent for bypassing the “gatekeepers”?

I think Josh Braun, with all due respect, IS being overly optimistic. A friend of mine told me he is in the same boat as Jason Weiss (Humboldt County), meaning the film has done good to great numbers in VOD but he hasn’t seen a penny of it.

How in the hell are filmmakers not making money here? It makes me mad.

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