Screen Magazine - Index

Screen Magazine - Screen Magazine: Vol. 29, Issue 11a - Index

The Vision
Since before 2000, marketers and
industry pundits touted the eminent
arrival of video retail’s Holy Grail –
frictionless distribution of content over
the Internet. It has been a wonderful
thought – films, videos and television
episodes all easily found, previewed,
purchased and subsequently streamed
or downloaded to the users PC (which
was soon going to replace the TV as
the central appliance in the home).
This, of course, would happen without
manufacturing a physical product.
Cost of delivery then drops to near
zero. Warehouses and retail locations
and manufacturing facilities become
a thing of the past. Profit on niche
content (titles selling less than 250 units
per year) would not only be possible
– it would be an important part of the
new video economy.
The Challenge of Internet Delivery
As 2008 progresses we’re finding
out that this is more easily said than
done. To be sure, video delivery via
the Internet is on the rise. In fact, it
is the fastest growing segment. But,
this volume is on a very small base
(less than 6% of commercialized video
content is delivered via the internet).
More importantly, profitable internet
delivery has yet to materialize. Why?
Several factors are at play.
They include:
• Rights management requirements
• Piracy concerns
• Portal aggregation of content
• Delivery bandwidth constraints
• Consumers desire to watch video
on their television versus a computer
screen.
Most important of these are delivery
bandwidth and the television viewing
preference.
Content owners and site aggregators
have been making steady progress
on the “supply side”; you can now
go to a variety of portal sites on the
net and find downloadable content
for entertainment, personal growth,
instruction and spiritual inspiration. Even
the pesky rights management and
anti-piracy protection are reaching
acceptable resolution.
Yet progress in these has not solved
the issue involving the last mile, and
the last 10 ft. Until 5-10 mps consistent
bandwidth gets into the bulk of
American homes, and until the content
can get transparently to the customers
television from the PC, digital delivery
will represent an attractive addition
to the delivery platform suite, but it
will struggle to reach its mainstream
potential. Internet delivery providers
will struggle to reach profitability. And,
long tail content will largely remain
trapped on servers in data centers,
waiting to be delivered to a customer
that can generate demand – but to
whom, in a viable fashion, technology
has yet to connect.
Conventional DVD Replication
Fails To Address The Issue
Recognizing the opportunity long tail
content offers, and the challenge
currently presented by pure digital
delivery – content owners currently seek
ways to economically deliver long-tail
video content on optical media as an
option for a demanding customer.
The challenge is that the economics
of DVD replication don’t fit special
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Wag The Long Tail
Monetize Special Interest Video Content
With DVD Manufacturing On-Demand
By Blair Zykan
interest content. When a title sells only
250 units a year or less – producing
1000 units and generating a 5 year
inventory supply don’t make sense, for
a variety of reasons:
• Mfg experts have long since proven
the cost of inventory approaches 20%
per year in shrinkage, cost of money,
obsceneness, warehouse costs,
damage, etc.
• This doesn’t even begin to address
the cash drain excess inventory places
on valuable resources for marketing in
a far more competitive environment.
Bloated warehouses throughout the
country tell the story of film and video
content owners who invested mightily
in the scripting, shooting and postproduction
of their titles. They then
squeezed every last penny out of the
perceived unit cost by replicating
1,000 to 10,000 units in anticipation
of the product flying off the shelves.
Only to find that the $0.17 per unit they
saved meant they now have $12,000
sitting in a warehouse costing $250/
month in hard and soft costs instead of
going toward internet marketing, sales
channel development, and publicity
generation efforts.
And, since you can’t feed a starving
marketing budget with inventory, the
sales don’t happen.
Enter DVD Manufacturing On-Demand
Out of this environment grew DVD
manufacturing on-demand. DVD ondemand
combines the best of internet
delivery and optical media production
as it applies to long tail video content.
Like internet delivery – video content is
stored on servers, waiting for the orders