HD For Indies

...and then to tie it all back to this constituency, imagine if Apple started opening doors to indies for distribution in this format, much as they do for indie labels, or better yet, how they open doors for podcasts from anybody out there.

This could be eBay for video, in essence.

If the studios were slow to come out and sign on, Apple could certainly find other content to populate it - ours.

Not in the sense of auctions, but an empowering many to many distribution system that can scale up as fast as content gets into it. Apple would only have to set up the infrastructure and let the content flow in. Yeah, they'd become one of the biggest bandwidth users in the world, but if they bought/put the infrastructure in place and the cost of bandwidth was duly factored into the costs, it's doable. There'd be a required minimum cost per minute of video (or really, per MB of data), if only to cover the bandwidth bills and overhead.

Right now, they are merely linking to podcasts, so the traffic is links, not content. If they wanted to sell content, they'd need to host or co-host (or colocate or whatever) the content to protect it for access for only those who pay.

Along these lines, for anybody's content, there will be a necessary chunk of math to make this work - folks will not be willing to pay more than what a retail DVD costs for this stuff. Movie studios, just like record companies, are going to want the lion's share of the profit - it's their content after all.

For audio, the bandwidth isn't that huge - just 128 kilobits per second. But for video, even standard defintion video, something more like 2000 kilobits/sec will be required - 16 times more!

Downloadable movies won't work economically until a reasonable profit can be extracted from the 10-20% left over from the studio's cut, less advertising, less infrastructure and overhead, and less the bandwidth costs for a bulk purchaser like Apple. A quick Google search and I found that bulk commercial bandwidth is about $2/GB. A 90 minute movie at 2 megabits (sufficient with H.264 for 24p standard def) would be about a 1.35 GB - $2.70 for the bandwidth. Apple would surely be able to negotiate a much better rate than that. So then the question remains if there's enough profit left over from a $13-$20 movie to make it worth while. Apple squeezes out tiny margins on the iTunes Store purportedly, and I hear that the studios want a bigger cut when they renegotiate after current contracts run out. Will Apple make a smaller margin, or raise prices, or both? Unknown.

As a side note, that bandwidth price is pretty cheap - that makes me start rethinking some online stuff I've been planning on - it's just a question of how bulk is bulk?.

But if they were the first, large scale, well supported, easy access (think iTunes Store easy) place to purchase downloadable video that would easily play through to your TV without rocket scientist skills required, I think that could really go far and fast in the market.

And if indie producers could get their content into that system, such that it was findable in the way stuff is on Amazon or Netflix, it'd be yet another valid distribution model for folks to use.

But once again, just because we can bring down the costs of production (via HD as I've been discussing for over a year) and the means of distribution (Amazon, Netflix, direct sales, online, etc.), doesn't mean that every movie gets a decent shot at being seen. Because marketing/advertising costs are still the killer - there's no good way to get the word out, inexpensively, to a broad audience to get them to see your film, and especially, as ad folk say, to "cut through the noise" of the constant media bombardment that we all are subjected to daily. And no matter how cheap we make them or produce them or sell on a per unit cost, folks only have just so much time to see movies, and will only see X number per year. I suggested Netflix to my busy sister (two kids, 4 and 7) as a timesaver to watch movies herself. Her response? "I'd never have time to watch'em, even if they were sitting right there."

But that's a whooooole other blog to write about how to solve THOSE issues.

-mike

-mike