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.
3 responses to “D2DVD – Number Crunching”
I crunched the numbers back in April 2004 after Angel was canceled and have updated them since. Take the sales figures of the Firefly sets (over 500,000) figure out on the low side the viewer count the Nielsen’s gave Angel in the last season, cut that by half and then add back in Britain and Australia. Deduct for the fans who would actually pay for a shortened season, like FX does, add back in what Fox charged the WB for each episode in S1-4 (S5 doesn’t count as Fox cut their fees) and I come up with a hefty chunk of change for those who are willing to go one step beyond what the Scapers and Henson did. And I have an idea how to get the filming funded if Fox doesn’t want to.
I other words, I’ve seen the future and and it is “Direct to DVD”. And it scares the networks shitless and they will try to block it from happening. But it will. Two more years and it will.
Piers –
This is the first I’ve seen of this post “D2DVD Number Crunching” so let me weigh in on this:
1. Actually for DVD the stores buy them at approximately 60% of Suggested Retail Price. Store chains like Wal-Mart get a slightly better deal as they have the capacity to push a lot of DVD’s out the door.
2. Remember also that this D2DVD series is going to be sold to rental chains as well – not just retail. That means that a studio can command a % of the rental fees.
3. Remember the BLACK SCORPION TV series? It was 22 episodes that was made for $19M dollars. It was sold directly to Germany for $500K per episode ($11M).
4. Knowing that you are going in for 6 or 13 episodes you can “block shoot” the series and save money by using one location for multiple episodes. A little tougher on the actors and crew, but a huge savings on the shows budget.
5. By bringing in the development folks early and having the whole story outlined – production can make suggestions (as can SFX, etc…) to help minimize costs.
6. You can pre-sell the show at multiple markets. A show I am doing the marketing on right now has pre-sold. The company is taking the material I produced for them to Mipcom to sell the rest of the world. It has been licensed to Showtime here in the US.
7. Use financial /tax incentives. That’s what they are there for. The state of SC has a production rebate program where if you spend a certain amount on crew and production in SC, you can receive up to 50% of your money back upon wrap of picture. Imagine how pleased your banker would be if he suddenly received 50% of the money he loaned you back – and your show hadn’t even been released yet!
7. Use product placement. Equipment and cash for featuring products on the show.
8. And all this is pretty moot considering the fact that Sony has set up CULVER ENTERTAINMENT to do just what we have been describing -create TV for DVD and other media (internet, etc…). This isn’t a fantasy – it is reality.
9. Remember the movie THE LAND BEFORE TIME? It has had 5 or 6 sequels (or possibly more) released D2DVD since then and has grossed over a BILLION dollars.
I wish you had emailed me and told me you were discussing this way back when. Again, I only now discovered it, but I’m glad I did.
And of course the increasing move to downloadable content make all this a lot more viable financially…
Good post Piers, thanks.