Tag: new financial models

Based on the Arguments set out in the last post, we have a 13-episode D2DVD TV series created by a famous showrunner and pre-sold to one overseas territory.

Now let’s take a look at the business argument.

The RRP of a Firefly box-set (a 13-episode series) is $50 for 13 episodes plus commentaries, extras, etc. (source).

Retail rule-of-thumb is that the bricks-and-mortar stores get half of that, the rest goes to the production company. Let’s knock off another fiver for the cost of production. This means, then, that we have $20 per box-set to put into the production pool.

We’d have to sell 975,000 box-sets to break even if we’re bearing the full cost.

Not gonna happen. So let’s see if we can take that down a bit.

Doctor Who releases the new series on DVD within two months of an episode airing on a vanilla release – just the episodes, no extras. Four disks with either three or four episodes on it.

This way you can dip into the series, without having to shell out fifty bucks. It also has a creative corollary: We need at least one “big bang” episode every three episodes.

OK, so what’s a reasonable price point?

If the RRP was 15 bucks, we could expect to see maybe $7.50. 15 bucks will likely get discounted to 10, so the actual cost in-store or via Amazon is three or four episodes for ten bucks. That’s a nice price-point, psychologically.

It’s very difficult to get hold of sales figures for DVDs, unfortunately. Assuming this comment is correct and 200,000 is a respectable sales figure for a $50 box set, then I think a good working figure for our sales would be 100,000 per disk.

Multiply that out by the vanilla releases and we’ve got a nice round $3 million.

Assume another 100,000 for the box set. We get twenty-five on this, so that’s two and a half million.

We’re going to pre-sell the series, given that we have a star showrunner, to at least one foreign network for $300,000 per episode. That gets us an extra 3.9 million.

So:

Pre-sales: $3.9m
Vanilla: $4m
Box: $2.5m

Gives us a grand total of $10.4m

So we’re ten-and-a-half million short of break-even.

So in conclusion, I can’t see a method by which we could make broadcast-quality television and sell it direct to DVD. Unless the budget for the show could somehow be brought down to $750k/hour without any corresponding loss in quality.

Obviously all of these figures are guesstimates – if anyone has more accurate ones, I’d love to know.

Also, if the show is a success and racks up five series, it will go to syndication, which will change the outlook. But I can’t personally think of a production company that would be willing to take a $10.5m gamble like that.

I’d love for decent D2DVD episodic storytelling, but my first pass seems to indicate it ain’t gonna happen.

The very clever Mr Bill Cunningham believes that the time is right for a D2DVD television series.

So, let’s take a look at some of the requirements needed for success.

Axiom One:
We want quality entertainment.

Axiom Two:
We are here to make a profit.

OK, what can we derive from that?

First things first. Quality entertainment.

Let’s define that as network-quality TV without the network problems, problems being defined as Stupid People With Notes, be they stars, execs, or sponsors.

So under that definition, we need network style money. Let’s estimate that to be $1.5 million dollars per 45-minute episode. (source).

Argument One:
The series consists of 13 episodes.

13, because that’s a half-season.

If this thing works out, and runs to more than one season, then part of the future income stream will come from selling broadcast rights in the future, both in the US and abroad.

13 episodes is a nice chunk – exactly 1/4 of a year. Three months of a “new” show every week. If you can last five seasons, that’s three months in syndication with a show every weekday before you have to repeat yourself.

13 episodes is also a handy size for a box-set – six episodes would be too short to feel that you’ve got your money’s worth, and 22 would be an extra 13.5 million dollars.

And more to the point, 13 is a number that a broadcaster is comfortable dealing with. (The alternatives would be 6 or 22.)

So 13 it is, for a total cost of 19.5m

Argument Two:
It’s a genre show

It needs to be a genre show, because we need to sell a huge number of DVDs in order to make a profit on network-quality entertainment. The best way of selling shows is to people who are rabid about new product. Which is genre fans. This is going to be the best way to build underground buzz, which you’re going to need to take this out of the gate on the first day.

Think of it as being like an opening weekend. You need huge in-store promotion and marketing from the retail giants to sell effectively. So you need to prove pent-up demand.

Argument Three:
It has an established showrunner.

This needs to be a showrunner whose name will sell the series to the public directly.

So you’d need someone of the stature of Joss Whedon. Or Dick Wolf. Or Chris Carter. Or Steven Bochco. Someone, in other words, who has already made it, and big, on Network Television.

Because the biggest sell of this particular operation is going to be that this series is just as good as if not better than what you can get on your TV already. And the only way of guaranteeing that is a top-tier showrunner.

This experiment has never been tried before, so it’s got to be someone whose name can actually sell the series to the general public.

In the second tier: Russell T Davies, Tim Minear, Marti Noxon, Jane Espenson, Manny Coto, Joe Straczynski. All good people and true, but they’ve not had the super breakout hits. I’d buy an original DVD series from any of them, but are they big enough for the mass market this would require?

Argument Four:
It’s an American show.

American through-and-through. The biggest television audience in the English-speaking world is in the US. Along with most of the talent we’ll need to make this thing. No ifs, no buts, it’s made out of LA or Vancouver, and set in the US.

Argument Five:
It’s not just for DVD.

You also sell abroad, for preference selling first broadcast rights in that territory in advance.

For example, CBC co-fund Doctor Who by buying rights to screen the series in advance. (I haven’t been able to source the exact figures, so if anyone knows what the are let me know). Given that you’re not getting a licencing fee that you’d receive from a traditional broadcaster, pre-sales will be important.

It may also be possible to offer individual episodes through iTunes.

Argument Six:
Each episode lasts 45 minutes

This allows TV sales through existing channels. An hour show, once you’ve added in space for the adverts, doesn’t fit neatly into a broadcast slot. A 45 minute show does.

So we’ve got 13 episodes from a top-notch showrunner at Broadcast TV quality for a grand total of 19.5 million dollars.

Onward!

EDIT: Hello everyone from Whedonesque! There’s another post in this series in which I’ve crunched some numbers and reluctantly come to the conclusion that a broadcast-quality D2DVD series probably won’t make its money back. Though I’d very much like to be proved wrong on this.