I don’t know about you, but I haven’t bought a DVD or Blu-Ray in nearly a decade. Virtually everything I watch at home runs through my Apple TV, and I’ve long assumed most others were in the same boat.
For this very reason, I’ve never sold DVDs for my own films.
I always assumed that it would be morse hassle than it’s worth, and that any profit I might make would be negligible.
But after a recent podcast conversation with film marketing expert Kyle Prohaska, I’ve completely reframed how I will approach DVD and Blu-Ray sales in the future.
Below I want to share some takeaways from our chat that I know will be of value to many of you. I’ll start with this –
A huge amount of people are still buying physical media.
Just because DVDs/Blu-Rays aren’t as popular as they once were doesn’t mean the market has dried up. There are still millions and millions of people who prefer physical media to streaming, and you only need to capture a small fraction of them to turn a profit with your film.
There is also far less competition.
Everyone with an indie film will eventually throw it up on Amazon or iTunes… But how many of those films will be sold as DVDs? I would estimate 5% or less, and that’s probably being generous.
Less competition in the market means your product stands out more. In a sea of endless streaming titles, a physical DVD looks and feels like a different product… Because it is. And when it comes to selling anything, having less competition is always a good thing.
DVDs & Blu-Rays attract a higher paying audience.
Most people who stream all their movies do so because it’s the most cost effective option. This demographic isn’t necessarily looking to spend $5 to rent a movie they’ve never heard of, let alone $20 to buy a digital copy of it.
People who buy physical media however, are completely accustomed to it. They see the purchase as an investment in their library of films, and are far more willing to spend money on a movie than the average streamer.
By selling your film to people who enjoy DVDs, you take advantage of a market segment that is used to paying a premium for movies… Not those who simply want the lowest cost option.
This also makes advertising for your film far more viable.
If you’re using digital/social media ads to promote a film on streaming, you’re lucky if you break even. In most cases, you will lose money even if you do everything right.
That’s not because the advertising doesn’t work, but because your profit margins are practically non-existent.
Let’s say it costs you (on average) $3 in ad spend to get a single rental on the iTunes Store for $2.99. Once Apple takes their fees, you are losing money. And don’t get me started on Amazon!
On the other hand, if you spend that same $3 to advertise for a $20 DVD/Blu-Ray sale (that cost $5 to make and ship), you just profited $12.
Multiply that by the amount of total purchases you might generate and the difference in profit (compared to streaming) could be monumental.
With physical media, there is also way more opportunity to up-sell your customers.
This is where things get really interesting. Let’s say you have a library of titles, not just one – Now when customers go through the checkout process on your website, they can purchase a bundle of all your movies.
Or perhaps you have ancillary products, like merch, signed posters, a soundtrack, digital downloads, or custom artwork. Those can easily be marketed and sold alongside your movie.
Not everyone will buy these products of course, but the idea is to get your average sale price as high as possible.
Perhaps 1 in 4 people who make a purchase from your store also buy one of your bonus products for $75. That means instead of making $80 gross profit for 4 sales (4 x $20), you are making $155 (3 x $20 + 1 x $95), effectively doubling your profit.
Or put another way, your average sale value jumps from $20/sale to $38.75/sale.
At an average sale price of $38.75, you would only need to make about 2500 sales to generate over $100,000 gross. Compare that to streaming, where half a million people could rent your movie and you might still be in debt.
Up-selling or cross-selling products with your film is a great business model, but it’s really nothing new. Theaters have always made more profit by selling popcorn and sugar than movie tickets. Now you can do the same.
The one major drawback with physical DVDs/Blu-Rays is that it requires far more time and effort than selling digital goods.
There’s no getting around it – making, selling, shipping, and dealing with returns on physical items will always be more cumbersome than selling a digital product.
One option is to find a fulfillment house that can drop ship products for you (taking the majority of the work off your plate), but that will start to eat into your profits.
Alternatively you could ship your physical DVDs/products yourself initially, and then hire on some help once you start turning a big enough profit.
All of this might sound like a lot of hard work (and it is), but for the right filmmaker it can be a game changer.
Many indie films have made hundreds of thousands of dollars (or more) through self distribution of DVDs and Blu-Rays.
And I’m not just talking about the bigger titles with stars and major festival placement. Plenty of micro-budget indies are pulling this off right now too.
That doesn’t mean it will work for every film. You still need a great movie, a killer trailer, a poster that grabs your audience, and (hopefully) some additional products that are just as enticing.
But with the right configuration, turning a substantial profit with your movie through physical media can be the surest path.
And remember – you don’t need the whole world to buy your movie. Just a thousand direct sales could fund your next passion project.
This article originally appeared in my Sunday newsletter.