YouTube Users Pass on Paying for Movies

33 Comments

Indie filmmakers looking to YouTube as a possible new distribution outlet might want to think twice, based on weekend returns from the video site’s new movie rental service. Last week, the online video site teamed up with the Sundance Film Festival to make a small selection of critically acclaimed full-length films available for rent for 48 hours. [digg=http://digg.com/tech_news/YouTube_Users_Pass_on_Paying_for_Movies]

But, despite a post on the YouTube blog and pickup from various tech blogs, very few users have actually taken YouTube up on the offer. Based on a quick look through the movies that were made available, it appears that YouTube viewers rented the five films less than 1,500 times in total, or an average of 300 times each. At $3.99 a piece, that means the indie films generated less than $6,000 in total sales over the course of the weekend, or about $1,200 per movie — and that’s before YouTube took its cut for hosting the files.

Video Views
Bass Ackwards 308
Homewrecker 308
The Cove 303
Children of Invention 301
One Too Many Mornings 250

That’s bad news for the films involved, and could be bad news for YouTube, which is looking for new ways to monetize videos through sales and rentals. While the films are independently produced and haven’t generated the same amount of buzz as some Hollywood blockbusters, the low view counts are surprising, given the buzz before the film festival and prominent “featured” placement from YouTube.

The good news for YouTube is that it’s still expected to become profitable this year. In a recent research note, Barclay’s Capital analyst Doug Anmuth suggested that YouTube would add to Google’s bottom line for the first time in 2010, with revenues growing more than 55 percent year-over-year to $700 million.

33 Comments

VPLLC Old School Productions

There are a lot of bad independent films out that managed to get made and / or distributed on Netflix/Youtube, but I wouldn’t pay $4 to watch most of those films. We live in an “film is dead,” high def camera era and there are too many independent filmmakers proving they can make an expensive/pro looking stuff but without compelling content. Thrillers, shock topics, and contrived over dramas that look glossy and well lit but are cheesy or “look what I can do” movies. Fortunately, every know and then someone will produce something real and just good, and they will sell that @ Netflix or through theaters but Youtube is more promotional or ad-revenue based territory than it is a box office. All this is is a large company saying “well what else can we do” :D

B

Out of principle, I will never pay money to watch a video on Youtube. Keep the internet free! When youtube videos are created for profit instead of for the sake of cultural enrichment, the whole reason to watch them in the first place dissipates. Hell, just look at the garbage we see in Hollywood. I already pay for an internet connection. What’s next, a fee to use a search engine??

Sean Murphy

Hi Ryan,

Nice post. I quoted a few of the comments here in the post we published over at Vidli. It’s a funny, relevant take why Youtube flocked up and why Vidli will take down Goliath.

Ya’ll deserve better than Youtube’s rental service…

http://twurl.nl/y833wf

Thomas Mai

I dont believe that the YouTube “Experiment” was a failure. It only ran for 10 days and proved there was a demand however small. For an independent producer this can become yet another revenue stream and it can all add up to bigger bucks when you gather up another possible angle of income.

We are so used to think exclusivity, please start to think non-exclusivity.

Now it is possible for a producer to make a deal themselves with no expensive middleman and have their film online at multiple online retailers like Itunes, NetFlix, Amazon, TheAuteurs, Youtube etc, the more the merrier.

Sundance title Back AssWards became the most sold film on Itunes on the indie section during Sundance see with 289 downloads after 2 days see http://sydneysbuzz.blogspot.com/2010/02/releasing-on-digital-platforms-first.html

We are talking about small films here not major block busters. This is not Avatar but independent films who can now have longevity and stay online instead of being yanked from the theaters and video stores after a short period. If the experiment had run for a year the numbers would be much higher. We have to look at the lifespan of the distribution and the possibility of actually having people find the film online, as opposed to 5 years ago when there was no alternative.

We have to embrace this new era of no Gatekeepers who can decide the fate and life of you and your movie. Now we are empowered as filmmakers to have our own distribution and make money while we are sleeping.

With Social Media, marketing and sales is possible for the even smallest production company.

Stop focusing on the small picture and see this in the great context of possibilities that now exists for filmmakers globally. Remember the film was only available on YouTube in the US. There is a whole world out there, America is still only 300 million people as opposed to more than 6 billion worldwide

I believe this is the best time ever to be a filmmaker. Never has equipment been cheaper and distribution easier and dont get me started on Crowdfunding.

Check out http://www.ageofstupid.net/money and MyMillionDollarMovie.com are great examples on Crowdfunding for films and how it is possible to raise funding for films in this digital edge.

You can watch my presentation on VOD, Social Media & Crowdfunding for free on Itunes http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=342575704

of if you dont have Itunes click here http://festivaldarlings.23video.com/video/526600/vod-and-what-it-means-to-the

Thomas Mai
http://www.MicroMajor.com

Thomas Mai

I dont believe that the YouTube “Experiment” was a failure. It only ran for 10 days and proved there was a demand however small. For an independent producer this can become yet another revenue stream and it can all add up to bigger bucks when you gather up another possible angle of income.

We are so used to think exclusivity, please start to think non-exclusivity.

Now it is possible for a producer to make a deal themselves with no expensive middleman and have their film online at multiple online retailers like Itunes, NetFlix, Amazon, TheAuteurs, Youtube etc, the more the merrier.

Sundance title Back AssWards became the most sold film on Itunes on the indie section during Sundance see with 289 downloads after 2 days see http://sydneysbuzz.blogspot.com/2010/02/releasing-on-digital-platforms-first.html

We are talking about small films here not major block busters. This is not Avatar but independent films who can now have longevity and stay online instead of being yanked from the theaters and video stores after a short period. If the experiment had run for a year the numbers would be much higher. We have to look at the lifespan of the distribution and the possibility of actually having people find the film online, as opposed to 5 years ago when there was no alternative.

We have to embrace this new era of no Gatekeepers who can decide the fate and life of you and your movie. Now we are empowered as filmmakers to have our own distribution and make money while we are sleeping.

With Social Media, marketing and sales is possible for the even smallest production company.

Stop focusing on the small picture and see this in the great context of possibilities that now exists for filmmakers globally. Remember the film was only available on YouTube in the US. There is a whole world out there, America is still only 300 million people as opposed to more than 6 billion worldwide

I believe this is the best time ever to be a filmmaker. Never has equipment been cheaper and distribution easier and dont get me started on Crowdfunding.

Check out http://www.ageofstupid.net/money and MyMillionDollarMovie.com are great examples on Crowdfunding for films and how it is possible to raise funding for films in this digital edge.

You can watch my presentation on VOD, Social Media & Crowdfunding for free on Itunes http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=342575704

of if you dont have Itunes click here http://festivaldarlings.23video.com/video/526600/vod-and-what-it-means-to-the

Thomas Mai
http://www.MicroMajor.com

So Hard To Find

PS thanks for THIS site – as it was the one I finally found to link to the movies. I have passed it on!

So Hard To Find

Something REALLY important to acknowledge is how ridiculously hard it is to even find these films on youtube. Many ppl have critiqued this. They needed a 12 year old to add some meta-tags or something. you’d think googling or youtubing basic words like sundance films 2010 (and variations) would help. for real, it is an embarrassment that I hope turns into a learning lesson. so to use the numbers as any indication of what people pay for is lacking stats… the megaphone was clearly in the OFF position. It is seriously like trying to find a needle in a haystack – even the Sundance YouTube channel does not have the info or it is buried deep. NOR does their website!! AND to add insult to insult, the info on the movies themselves does not even link to other movies… just a real bad debut. But something they could fix… my little niece needs a job for some candy. Peace.

gubatron

In 48 hours and you’re already killing it?
I didn’t even know this was up already.

You have to let the service up for a little longer to make any judgments of these sorts.

However… being Devil’s advocate you don’t have to be a genius to understand that $3.99 seems a little too high for “renting” a movie to watch it on your computer, specially for a crowd that’s used to come to youtube for a bunch of short free video fixes.

This business model down the line won’t be a significant source of revenue for youtube, they’ll have to revisit their strategy and copy the Netflix flat rate model; Pay every month and stream all you want from the ever growing catalog.

The Netflix flat fee model is the best available and the markets also like it; Netflix’s market cap ($NFLX) is now over $3 billion and Blockbuster’s has been reduced to a mere ($BBI) $70 million.

From a customer’s perspective I would never rent “on demand” films at $3.99 each, not even from my cable company and I’d be watching it on a big screen sitting comfy in my living room couch.

I rather stream to my heart’s contempt all I want without having to take my wallet out every time.

Flat Rates FTW.

Karen

At $3.99 a piece to watch hunched over my computer? Gee, I wonder why it failed?? I’m aghast.

HM

The UI is poor. No trailer up before the movie to help you decide if you want to buy it. Then you pay $3.99 and you only get it for 48 hours. Stupid – I would expect a lot more flexibility. “Rental” feels like the wrong model in UI like this, for some reason.
(When it gets to iTunes I’d be able to keep it forever if I wanted.)
Maybe if it were cheaper or one of these titles took off.
YT needs to do some good old fashioned user research & marketing.

filmfestreview

We have decided to host our feature documentary that actually is all about YouTube and YouTube personalities elsewhere.
YouTube doesn’t have audience that is sophisticated enough that’s why I think the Sundance films don’t have a chance to make a huge profit
Also, the average YouTube viewer is there because it costs him nothing…YouTube audience doesn’t like to pay for content
our doc Butterflies have been downloaded over 14,000 times since its launch few weeks ago :)

BOBJENZ

I think YouTube needs to put a “Vevo” wrapper on a community like this if they’re going to be successful. Right now, the films are mostly lost in the din of YT… I think the idea will be useful, especially when it’s a download to your TV. This will be the same dealy as NetFlix eventually.

mark R

Hey Ryan… Do you know if they are showing total views for all rentals? I know that their views count is usually behind quite a bit… Additionally, I dont know how anyone would have known about this new feature (outside of some blog posts) even if they were interested. Very difficult to say so far whether this is successful or not in my book

Jeremy Campbell

I’m very surprised actually, but I suppose these are unknown indie movies. If YouTube can work deals with major Hollywood studios this pay model could work in time. Pretty stiff competition in a crowded market though.

Sam

Have you been to Youtube at all? It’s populated instead by juveniles making rude remarks and posting dumb “parody” clips or misnamed videos of nothing in particular. This isnt exactly indy film festival central nor the profile of folks who will pay money for content.

So this is mostly a case of right idea, wrong place entirely.

And then you add in the factors like someone mentioned above of rights blocking geographically, for film fans outside the US eg in European countries. Whom ironically enough are probably the biggest market for this kind of online service.

Ambernet

“This video contains content from New Video Group, who has decided to block it in your country”

Here’s why sales are low….. G-e-o Discrimination….

Lance Heiskell

Plus, it’s only been a few days. How fickle do you think netizens are? Give it a month and then do the analysis.

Paul Jones

While the numbers are not large, I do not believe that they are indicative of whether or not this business will be profitable. These movies likely generated more rental revenue through youtube than any other online outlet would have generated. These are niche movies, and independent films generally have very low sales and rental volume. I think this business has the potential to be very significant for Youtube if they are able to sign up enough quality content,

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