A lesson in how to profit from the free for the film industry

Written by Nic Wistreich | 19 June 2010 | in articles - Finance

A few months ago I downloaded an open source add-on for Joomla, the (free) software that powers Netribution. It's a powerful tool which should make a nice addition here at some point - and it was free. So impressed was I after half an hour of using it that I checked out some of the add - available for it. I could buy alternative templates for $19 a time, an iPhone version, integration with other bits of software - or the whole bundle of extensions with a year of updates for $99. Plus there was a discount code of $20 floating around. It took me about five minutes to decide to make the payment.

To reverse this process, psychologically: if at the beginning I had learnt about a good piece of software costing $80 I would probably have ignored it and looked for something cheaper or free. Instead, because I got something very powerful at no cost, that I could try out, I decided to trust the software developers to make something even more incredible at a price.

It reminided me how the film and creative businesses who succeed on the internet will be those that find a way to first offer something incredible for free, and then offer something even better that is worth paying for.

Music is pretty much there. Listen to a song on MySpace or Spotify or wherever, and like it enough to pay £25 to see the artist in concert. Radiohead made more for pay-what-you want In Rainbows than their previous three albums combined, and followed with their largest tour in years. The same with books - Cory Doctorow's and Paulo Coelho's sales famously rose after they began to offer the full texts online for free. For film tho we have a significant challenge. The non-free experiences worth paying for are merchandise, DVDs and going to the cinema. DVD sales are in decline, while merchandise and cinema releases are typically reserved for bigger budget releases.

This is why the news that Franny Armstrong's Age of Stupid made £110,000 (over $160,000) through non-theatrical exhibtion - eg screenings in community groups, schools, town halls and conferences - is worth paying attention to. She not only probably made more money for distributor-free exhibition than anyone in British film history, but also got people to promote her film endlessly for free (the same people who had previously funded it's production, often). At the same time, while Franny didn't offer the full film on the web, she created a huge universe of free content that could be watched and read online, as well as a compelling narrative from the film's inception (and first public mention here on Netribution) through it's record-breaking fundraising through to it's legendary release. GoodScreenings.org - launched last week in partnership with the ever dynamic BritDoc - seeks to bring the system to more films and filmmakers and builds on the famous work of Jim Gilliam and Robert Greenwald in re-conceiving exhibition.

Still, it's understandable why some in the film industry are panicking, declaring the sky falling and introducing legislation that would allow a foreign media conglomerate to - without going to court - disconnect a British household or business from the internet. But they're missing the point. If all piracy magically stopped tomorrow their sales would still decline if they continued to use their current legacy business models. There is simply too much legitimate and high-quality free content online to compete with by charging £12 for lousy films. The winners in the new Digital Economy will be those who master the free by offering enough to make you want to pay for more, like the open source software company who got me to pay $80 for some extra binary that I didn't need really need (and certainly could have avoided paying for).

The winning model's any-one's guess... You watch Titanic and pay for an alternative ending where they live happily ever after. You watch V for Vendetta and pay for a version that has your face superimposed on top of V's. You pay for a limited edition and signed DVD of the film you just downloaded, which thanks your mum in the credits. Check a film out then get an exclusive offer for a private screening and champagne dinner with your partner. The winning model is anyone's guess.

Written by :

Nic Wistreich