March 7th, 2007
Who needs iTunes? The rise of the 'indie friendly' video download store
There's no doubt that the online video revolution is giving independent video producers unparalleled opportunities to reach an audience, together with zero-cost tools needed to publish and share their work online. However, the number one destination, YouTube — whilst serving as a great promotional platform — doesn't currently offer a way for independent artists to directly monetize their work (although CEO Chat Hurley has said that this is forthcoming). Luckily, others such as Revver and Metacafe have long stepped in to fill the void, by sharing ad-revenue with producers.
There is of course, a third option: offering paid-for video downloads. Adams Media Research predicts that by 2011, the online video market will be worth $5.8 billion, and bucking today's trend, the majority of that revenue will be generated through selling downloads not ad-supported content.
AMR's analysis points to a period of experimentation 2007-2009, during which the ad-supported model will predominate. But as significant numbers of homes connect their TVs to the Internet, consumer spending on downloaded movies and TV shows should expand rapidly and exceed ad spending substantially by 2011.
It's perhaps no surprise then, that we've seen a number of paid-for download services pop up over the last 18 months — with Apple's iTunes being the market leader. However, in the eyes of many of these stores, not all producers are created equal. For example, if you're an independent and you want to get your work into iTunes, you're out of luck. The same goes for Google Video's paid-for download option.
The good news is that a number of paid-for download services have launched, who are embracing 'long tail' producers.
Disclaimer: I'm currently using Streamburst (one of the services mentioned below) to distribute my own film, In Search of the Valley
Amazon Unbox
Amazon Unbox launched in September of last year, to offer paid-for downloads and rentals of popular television shows and movies. A few months after its launch, Amazon-owned Customflix announced that its on-demand DVD distribution service (which helps independent producers sell DVDs online) would now accept submissions to Unbox, opening up Amazon's online video store to anybody that meets its content guidelines. Download-to-own videos must be at minimum 20 minutes long; rental videos 70 plus minutes.
There are two obvious downsides to the service. Independent producers can suggest a price, but Amazon has the final say. Also Unbox uses a form of Windows Media DRM, restricting which devices the download will playback on, so that for example, Macs and iPods are incompatible. Additionally, independent submissions will have to sit alongside Hollywood and major television studio productions — which could be a good or bad thing, depending on the benefit of Amazon's famous recommendation engine.
Revenue: shared 50/50
Brightcove
Brightcove takes a slightly different approach to Unbox, in that video producers get to create their own channel/store — which can be branded accordingly. Also unlike Amazon's offering, producers have control over pricing (for both rentals and to-own downloads). The downside is that Brightcove also employ Windows-based DRM.
Brightcove also recently announced a partnership with AOL, so that Brightcove videos can (optionally) appear on AOL's video site, helping producers reach a wider audience than they might through their own store alone.
Because Brightcove's heritage is in offering a white label online video service, they also have one of best media upload and management tools.
Revenue: shared 70/30 in favor of the producer.
HungryFlix
HungryFlix is a radically different paid-for download offering compared with Unbox and Brightcove. All files are non-DRM'd MPEG4, so as to be compatible with both Mac and PC, and the service specifically targets portable media players such as Apple's iPod or Sony's PSP.
Whether or not producers are ready to abandon all forms of copy protection, remains to be seen; it's clear that the way HungryFlix aims to compete with piracy is through convenience and price. Short Films cost between $0.99-$1.99, and features/documentaries are priced $0.99-$4.99.
Revenue: 60/40 (after PayPal fees) in favor of the producer.
Streamburst
Streamburst (a new UK startup) offers a different twist on the issue of DRM. Like with HungryFlix, the downloads are DRM-free MPEG4. However, each video file has the credit card holder's name printed into it, along with a unique watermark, in the hope that this will discourage piracy. As with Brightcove, each producer gets their own store.
Revenue: approx 65/35 in favor of the producer.
To be continued…
I'm sure I've only just scratched the surface (this is nowhere near a complete list — add any others in the comments section), and I'm sure many new paid-for download services will come to market over the next twelve months. And who knows, maybe iTunes will eventually open itself up to independent producers?
Steve O'Hear is a London-based consultant, educator, and journalist, focussing on the Internet and all aspects of digital technology. See his full profile and disclosure of his industry affiliations.
