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Can YouTube Boost Disc Sales?

26 Feb, 2009 By: Billy Gil


While some might fear YouTube and other free streaming outlets to be the kiss of death for DVD and Blu-ray Disc, others are using the Web site to air their content — and seeing their disc sales rise as a result.

Independent filmmaker Hunter Weeks released his first film, 10 MPH, on DVD independently in the summer of 2007. He quickly saw DVD sales diminish as summer changed to fall. But, as reported in Forbes magazine, Weeks in January 2008 put his entire film on YouTube, the first feature-length documentary to screen on the site.The doc features one of Weeks’ producing partners Josh Caldwell traveling from Seattle to Boston on a Segway.

By partnering with YouTube, Weeks and his crew get 55% of revenue generated by advertisements placed with the film on YouTube. And the DVD? Sales for 10 MPH doubled after placing it online, with a click-to-buy link below the video, taking viewers straight to the DVD’s page on Amazon.com. Weeks said blogs picked up that the film was available online, and YouTube itself helped promote the film, featuring it in such places as its screening room (www.youtube.com/ytscreeningroom), which is currently sponsored by Grey Goose vodka and has featured such content as Sundance Film Festival coverage and films in the spirit of Black History Month.

“As it’s kind of settled down now, we’re still getting hundreds of views a day,” Weeks said, while traveling from Denver to Seattle (by car). “Netflix ordered another 210 DVDs of movie.”

Studio content on YouTube

For an independent filmmaker without a big marketing push or DVD distribution deal, it seems like a no-brainer: Make the film available online, and people will be able to watch it and perhaps buy the DVD. But when it comes to studio content streaming online for free, both tentpole titles and catalog content, it’s not such an easy answer.

“I think YouTube can help incrementally by driving increased recognition/advertising for DVDs,” said Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles. “As for putting entire films out there, this is likely to help smaller independent movies to get publicity out there, but unlikely to help more well-known movies (since they can afford more traditional advertising). I think it will have the negative effect for well-known movies, as then viewers don’t need to buy the DVD to watch.

“The better known and popular you are, I think you’re better off putting out less content. You want enough content to get people interested in your content, but not too much that they don’t have to buy it.”

Independent analyst Rob Enderle agrees, to an extent.

“Putting clips of movies on YouTube, if they are good, can work like teasers and drive folks to the DVD,” Enderle said. “Putting movies that look vastly better on a bigger screen on YouTube may do the same because few folks want to watch long-format films on the small screen, but this is riskier. If you take the position that people that generally want to watch movies prefer big screens and that folks who will sacrifice the big screen for the small screen to save money generally won’t pay for DVDs anyway, then prudent use of YouTube can result in vastly greater DVD sales.”

A good example of YouTube driving sales came with “Monty Python” DVD sales showing a reported 23,000% rise after the debut of a “Monty Python” YouTube channel, featuring episodes of “Monty Python’s Flying Circus.” And while high-quality clips of “Flying Circus” are readily available, YouTube filters also catch user-uploaded “Monty Python” videos and ask users if they want to include a click-to-buy link; if they do not, the clip is pulled.

“We’re definitely trying to encourage that kind of commerce between users and filmmakers, distributors and whoever else might use that feature,” said Sara Pollack, partner marketing manager for YouTube. She noted similar features are in place for partnered content from studios, such as Lionsgate and MGM, who offer on YouTube clips of films, such as Lionsgate’s Drugstore Cowboy with click-to-buy features. YouTube plans to build up its library of streaming full-length films on www.youtube.com/movies.

Pollack said YouTube can work in unconventional ways when it comes to studio fare. An example is The Princess of Nebraska, a film directed by Wayne Wang (The Joy Luck Club) hitting DVD May 26 from Magnolia Home Entertainment at $19.98. Through YouTube’s recent partnership with independent film purveyors Cinetic (which also recently partnered with streaming site Jaman), the film hit more than 250,000 views its first weekend on the site last October. The online screening helped create buzz for A Thousand Years of Good Prayers, Wang’s film that was released theatrically by Magnolia last fall, to which The Princess of Nebraska is a companion film (they are both adapted from stories by writer Yiyun Li). Magnolia also is releasing A Thousand Years May 26 at $19.98, and the two films the same day in a two-DVD set at $29.98.

Pollack said YouTube is interested in working with studios on bigger fare as well, even if it’s not putting the entire film on the site for free.

“Look at how much leaking footage helped the weekend box office for Cloverfield,” Pollack said.

But with premium content, it can come down to quality of streams and their speed. Analyst Richard F. Doherty of The Envisioneering Group said high-definition streams of a show such as the original “Star Trek,” which saw a rise in DVD sales after its clips were placed on YouTube, don’t compare to counterparts on disc, which can have longer episode running times than the TV broadcasts as well as bonus material.

“It was only a few months ago that YouTube added higher quality streams,” Doherty said. “Even with my fast FiOS modem, I’m watching the Enterprise in stop-motion across the screen. It’s not the kind of thing I want to bring my friends over to watch.”

Monetizing content on YouTube

Pollack said YouTube now has in place several different methods for monetizing content: the click-to-buy feature taking users to Amazon or other sites, placing ads through YouTube’s partner program (for which any user can apply) and sharing the revenue, and engaging users to drive ancillary markets and awareness to get them into theaters, watching TV and into stores.

“It’s really about looking at all of these different revenue streams as one source,” Pollack said.

Whether it’s a show such as “The Tudors,” the season premiere of which YouTube debuted, helping drive TV ratings, or an independent feature such as Four Eyed Monsters (the first film to screen on YouTube), where fans ended up buying merchandise based on the film in part because of its online buzz, Pollack said it’s more than just disc sales that can be affected — it’s about building a brand and recognition as well.

For independent content creators, making an impact through YouTube also can lead to bigger things beyond the money generated through the site alone. The short animated film “9,” a YouTube sensation created by Shane Acker, was nominated for an Academy Award; it is now being produced as a feature film by Focus Features, with Tim Burton as a producer.

One user, Cory Williams of SMP films, who has his own channel of “choose your own adventure” style videos where users can choose the fate of a video’s subject by clicking different videos embedded as video responses, has made more than $10,000 a month during peak months of online viewing through YouTube’s partner program. While the exposure has had people knocking down Williams’ door, from “Saturday Night Live” to filmmakers, Williams has turned them down, saying he likes being his own boss and wants to continue making clips to put online.

“Maybe someday I can make a feature film of my own … but I’m not in a hurry,” Williams said.

He also added, though, that he has filmed content in high-definition and hopes to release it on Blu-ray someday, if just to have a physical copy. Before he was a YouTube star, Williams, a comedy music artist, sold his own DVDs. But he’s holding out for Blu-ray to catch on.

“I have been planning on [releasing content on Blu-ray Disc], and when that happens I will be as happy as hell,” Williams said. “I want to preserve my work. YouTube may not be around forever, so to have it on disc, it’ll be there for me.”

What seems clear to anyone involved is that it’s all up in the air, as far as when to stream content, how to monetize content and what that means.

“You have to have a good story, and you have to have a good story about your story,” Weeks said. “In our case we were one of the first feature-length movies ever on YouTube. I think the problem is, nobody — whether you’re on the big studio side or the independent filmmaker side like me — nobody knows what to do right now.”

YouTube’s Pollack seems to have an idea.

“As things evolve, all of us have to innovate how we market to audiences,” she said. “It’s not just the film itself but outtakes, special features. What you put on site doesn’t have to be what you put in theaters or on DVD.”

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