Direct distribution platforms have made finding an audience for independent, no budget movies a real possibility. And though much of your effort might be focused on just getting your film online and monetized, there is a whole area of distribution that could provide potential profits that may be slipping past your attention: bonus content. VHX, a direct-to-fan distribution platform, has crunched the numbers on which content options are the most popular for the documentary STRIPPED -- a project that has harnessed the power of bonus content to appeal to their fan base, and has put more money into the pockets of the film's creators.
This is a guest post by VHX.
We get a lot of questions about pricing, specifically for bonus content.
How much should I charge for my deluxe edition? Should I sell bonus content on its own? For how much?
We loved watching STRIPPED, a documentary and love letter to the art of cartoonists. But we were also excited to see how the filmmakers experimented with bonus content. Here’s what we learned:
[Update: This study reflects prices before 5/28/14 when STRIPPED released another 7 interviews and changed their prices a bit. But worry not, the data is still good!]
Lesson 1: Include a whole bunch of bonus content that your fans want.
STRIPPED offers so many options for purchasing the film and bonus content. Sure, they’ve got the movie for $14.99 and a deluxe edition for $19.99, but they didn’t stop there. You can also buy extra bonus content on its own, for either $2.99 a piece or $34.99 for the complete package. Or you can buy a “Super Awesome Deluxe” edition that includes the film and an amazing 16 hours of additional content for $49.99. Whew!
What did people choose when given all these options?
The most popular package was the standard edition, but not by that much. Overall, the packages that included some form of bonus content outsold the standard edition with 42% of sales compared to 36%, respectively.
Even more interesting: the performance of the “Super Awesome Deluxe” package is off the charts. This is the package that has tons of bonus content -- it gives mega-fans everything. While only accounting for 23% of transactions, it makes up almost half of the total revenue:
That’s huge! Your superfans want everything they can get their hands on, so offer that experience -- you can potentially make more of your revenue from big packages.
Lesson 2: Offer a giant standalone bonus package to connect with fans who saw the movie elsewhere.
Because there was so much extra content, the filmmakers rolled it all into a bonus material package. Fans who didn’t buy the “Super Awesome Deluxe” package can upgrade if they loved the movie and want to see more. We thought most of the fans buying the bonus material package would also have bought the film on the site, but we saw something different:
Only 1% of the people who bought the bonus package actually bought the film on the STRIPPED site. More common was that someone who backed the film on Kickstarter redeemed the film, liked it, and then purchased the additional material. These are already active supporters, so they’re much more likely to be upsold than a typical customer. Have a standalone bonus package for your crowdfunders or other long-time backers.
The rest of the sales? They came from people who most likely saw the film on another platform, because we have no record of them watching the film on the STRIPPED site. (The film also debuted at #1 on iTunes, which definitely helped.) That is really powerful -- a fan sees a film somewhere, they enjoy it enough to go to the website, and then buy extra content that they can’t get anywhere else. In the case of STRIPPED, that adds up to a little over 5% of the gross revenue. You should offer superfans extra content to buy after they watch your film, no matter how they saw it.
Lesson 3: Offer individual bonus content. It gives customers options and encourages engagement.
Finally, STRIPPED offers various individual bonus content, like the directors’ commentary and extended interviews, for $2.99. These packages accounted for 12% of total purchases, but only 1% of revenue. If we were only paying attention to revenue, that doesn’t sound very exciting. The bigger picture is more interesting.
Fans like options. 40% of these customers also purchased the film on the site, so they used the bonus content packages as a menu to pick the content they were interested in. Think of it as a “Build-Your-Own-Deluxe-Edition.”
The other 60% percent of customers didn’t buy the film through the website. That means that, before their purchase, the filmmakers had no idea who these fans were. But as soon as they plunked down $2.99, they had new engaged audience members to connect with directly. Good stuff! Options attract new, engaged customers from other platforms.
STRIPPED has a lot of bonus content and uses it well. Every release is unique, and this is just one example, but we think the lessons learned are great for thinking strategically about pricing and bonus content.
What do you think?
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Great article! I've been looking for better facts and figures on direct distribution for a while for my own feature project - thanks!
June 4, 2014 at 7:51AM, Edited September 4, 8:56AM
And what did that all add up to? Rephrasing the question to reflect the privacy angle, what sort of a budget can expect to break even by the average VHX standards?
June 4, 2014 at 9:25AM, Edited September 4, 8:56AM
Vimeo is a great platform. Vimeo takes 10% of pay-per-view sales while content creators get 90%.
June 4, 2014 at 9:32AM, Edited September 4, 8:56AM
Really appreciated this breakdown of the importance of bonus content. Food for thought...
June 4, 2014 at 12:58PM, Edited September 4, 8:56AM
If your film is truly great, you won't have to sugar the pill with "lots of bonus content", though It doesn't hurt .
June 5, 2014 at 6:10AM, Edited September 4, 8:56AM
Natt - Unfortunately that's not how it works. If your film is great but the marketing is dreadful, the chances of it being seen are tiny. On the other hand, a dreadful film with great marketing will still get an audience. It's not fair, but it's the nature of the business - there are plenty of great films out there that have not made their money back, and plenty more that you've never even heard of because they just slipped under the radar.
June 5, 2014 at 6:22AM, Edited September 4, 8:56AM
Agree. Plus I will add that people "choose" bonus material and bundles "because " they want more. Have a look at the business model of the lucrative video game industry as proof.
June 5, 2014 at 12:07PM, Edited September 4, 8:56AM
Marketing is not synonymous with "bonus material"...you didn't even address his main point...which is quite valid...a great film that audiences love will fly out the door without tons of bonuses...it is the mediocre films that need lots of bells and whistles to nudge a so-so consumer
June 6, 2014 at 2:21PM, Edited September 4, 8:56AM
Sorry, but I think you've misunderstood me. I'm not saying that bonus material and marketing are one and the same (though bonus material is certainly a part of most marketing plans).
Natt has said that a truly great film doesn't need anything else (which you've rephrased - 'a great film that audiences love will fly out the door'...). You're not mentioning marketing or anything else here - just the quality of the film.
My point is that it doesn't matter if your film is good or not - the likelihood is that audiences won't watch it unless you manage to bring it to their attention through as many means as possible. I've been having meetings with potential investors for the past few weeks, and they always ask 'how are you going to get people to buy this?'. Answering 'It's going to be great!' isn't enough to convince them... Quality alone, unfortunately, is not enough - sugaring the pill, and 'bells and whistles' have always been a necessary part of the process. Bonus material, clever marketing, etc. etc. helps a great film connect with an audience (and often helps a crap film turn a huge profit).
Finally, bonus materials also help make a huge difference when it comes to a consumer making a choice between a rental and a purchase. From my own experience, I don't buy a mediocre film because of the bonus materials - rather, I want the bonus materials on great films because I want to learn even more about them. In fact, in the past I've bought multiple copies of a film (The Good The Bad and The Ugly comes to mind) just to get the extra bonus features on different versions.
Congratulations to STRIPPED - looks like it's doing well both with bonus material and without bonus material!
June 7, 2014 at 1:47AM, Edited September 4, 8:56AM
June 5, 2014 at 12:04PM, Edited September 4, 8:56AM
Good stuff! Always nice to hear success stories and creative marketing stories like this... $75K+ on Kickstarter... not bad :)
June 6, 2014 at 7:44PM, Edited September 4, 8:56AM
Also, having high priced content allows you to offer flash sales and other incentives that people respond to.
June 9, 2014 at 5:45PM, Edited September 4, 8:56AM