The future business models for monetizing digital content

Today the dominant model for monetizing digital content might be advertiser supported; examples would include Hulu or YouTube. But this model would prove disastrous for most independent films. While ad rates are set at mass-market rates. Google doesn’t release how much of its YouTube ad revenues end up in the hands of rightsholders but industry evidence suggests it is under $.01 per unique viewer. Ad rates will probably improve as viewer-profiling allows more targeted advertising but not by a comparable factor.

Netflix is the other mass distribution option. Netflix is a great way to get the most people to see your movie, but because they pay a flat fee instead of a per-view percentage, and because once it’s on Netflix, any of the 20 million subscribers won’t have a reason to get it anywhere else, so you pretty much stop making money from the distribution at that point.

It’s true that the major studios and content producers want to see more Netflix like options enter the subscription streaming sector. What they don’t want is for these solutions to offer popular shows and films for what Netflix charges. They want to services that charge for rentals or sales at $4+ a pop. To put this in perspective: Approximately 9 Netflix streams return the same revenue as a DVD sale or approximately 20,000 You Tube views would return the same revenue as just one DVD sale. Ad rates will probably improve as viewer-profiling allows more targeted advertising but not by a comparable factor. 

With MoPix we are building a platform that will default to streaming but giving you the option to download to device, on any device. The user can stream by default, or opt to download for offline viewing. Best of both worlds. Each has its use case and its value, and instead of saying any one approach is better, we say both are great. 

We are giving content creators the outlet to sell movies for less than the cost of a DVD, but earn higher margins and users the opportunity to download to any device, own all the special features they would on a Blu-ray and in general just making the experience of building a digital library a very satisfying experience.

We also strongly believe that paid content is also increasingly the norm for anything more substantial than old Hollywood films and sit-com re-runs.