Subscription Model for Video Platforms Smarter Than DVD Sales

  • “I like DVDs so much. It’s such a better format than VHS.”

    -Roland Joffe

    America seems to have agreed with Roland, Hollywood heavyweight director of the Oscar-winning film, The Killing Fields, at least for a time. While everyone knows that DVD sales have been falling like a wet mattress since their 2007 peak at over $10 billion in annual revenue, things have slid so far that industry insiders now refuse to even make those figures public. For years, DVD sales predictions helped studios create realistic budgets, but the crash in popularity of this medium has driven studios to make safer and more predictable choices, such as sequals, franchises and reboots. The end result is a more bland cinematic experience for everyone and a far less creative environment for those who make films for a living.

    As DVD sales continue to slide, rental, downloads and subscription streaming platforms have all carved larger and larger chunks out of the marketing pie. Yet despite all of the signs of a consumer migration away from physical media, a large portion of media producers are still clinging to this dying technology. The internet is filled with promotional sites in various genres offering physical DVDs with absolutely no streaming component available to consumers.

    The explanation for this discrepancy between product offerings and market desire is manifold. For many, the perceived cost of setting up a streaming video platform to their eCommerce site is simply an expense they feel they cannot afford. For others, they may be intimidated by what seems to them to be a logistical and technical nightmare. While yet others may just figure, “If it ain’t broke, why fix it?” For those media producers with more than just a tiny handful of DVDs to offer, the answer to that is more interesting and important than you might initially think.

    For content creators with a library large enough to justify offering a video platform with a monthly subscription, the difference between the revenues generated from a customer purchasing a couple of DVDs rather than signing up for a recurring fee is staggering. If you assume the average shopper visiting a media-selling website might buy a couple of DVDs, and that they are priced at an average of $15, that results in $30 dollars of revenue. Now take into account burning the DVD, labeling, packaging, and mailing that DVD and the total profit probably comes in somewhere around $20, not even counting the manpower necessary to complete this laborious process.

    With a recurring subscription service, media owners can charge whatever they like depending on the amount of, and quality of, their videos. It is increasingly appearing that $4.99 is probably a realistic average fee to charge for a monthly subscription of moderate size. Publicly released sales numbers show that the average Netflix subscriber keeps their subscription for 25 months, so we can guess that an average subscriber of a smaller service might stay for at least half that time, making their lifetime customer length at about a year. If these numbers are right, the average subscriber to a platform such as this will return a $60 profit, three times that of the average DVD consumer. Multiply that by five or ten thousand customers and you have an astounding increase in revenue, from what is fundamentally, an identical product.

    Pivotshare’s simple yet powerful self-service video platform allows any media content creator to set up their own subscription service in a matter of minutes. No need for complicated programming, expensive paywall outsourcing, or the laborious process of doing your own DVD sales. Sell your media with your branding on your promotional website. It’s that simple.

    To learn more about Pivotshare and their ability to monetize your media content through subscription services, click here!

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