IFH 366: Why Amazon is Only Paying .01¢ Per Streaming Hour

Alex Ferrari 3:04
But today, we're going to talk about something that really kind of sent shockwaves into the independent film world, which is Amazon after January 1 will be dropping their per hour streaming rate for content on prime from a whopping six cents per streaming hour down to a rock bottom. one cent per hour. If they could go any lower. I'm sure they would. But it is down to one cent. Now I know that sent absolute shockwaves throughout the business because they're like, well, six cents was insulting now one cent. So how are filmmakers even supposed to make money on these platforms at such a low rate? Well, there's some good news. And then there's some bad news. So the bad news is that yes, Amazon has dropped their minimum rate per streaming hour to one cent. So that means if you upload your movie to Amazon Video direct, or if a distributor uploads their your movie to amazon video for Prime This is not effect t VOD is not effect transactional. So you can still rent, sell, sell your movies and get different percentages. If you rent your movie for 99 cents, you're going to get like 40 or 40 to 60 cents. I forgot what the exact cut is. But you're going to get a substantial more, substantially more. So that's an that's another piece of advice. If you're going to put it up for TV or print it for 99 cents put up for $1. And at least you're going to get some more with that. But yes, it's down to one cent but the good news is that on the high end, you can go now up to 12 cents per hour, which I know does not sound like a lot but trust me Because of Amazon's massive infrastructure, and massive customer base, you're talking about millions of potential millions upon hundreds of millions of potential people watching your film for free on prime and you getting upwards of between one cent and 12 cents per hour, it does add up, believe it or not. Now I have seen behind the scene numbers of films on amazon prime at the set the old six cents per hour streaming rate, and they were doing very well we're talking about 1000s of dollars per month, sometimes 10s of 1000s per month, depending on the title, and how aggressively it is marketed. Now, this new rate is for North America. So in Canada, and the US, it is one cent minimum and 12 cent maximum per hour of streaming, it's a little bit different for the UK, Germany, Austria, and Japan. They're all within the same realm depending on the currency. But the area that you have the most potential for growth is outside of those, those core countries I just laid out. So Amazon's looking for content overseas, because that is the growth market in the world, the US, UK, Germany, all these big markets, they're pretty much saturated with a lot of content, but where we they need content is in the rest of the world. So in France, Italy, Spain, and the rest of Europe, they're paying 13 euro 13 cents, Euro, I don't know what the cent is in euro, but they're paying equivalent of 13 cents, which will be about 10 to 12 cents per hour. India, they're paying more Mexico, Brazil, and all of Latin America is a flat 13 cents US and Australia and the rest of the world is being paid eight cents flat. So there is some upside to this. And I know that sounds weird, because we're talking about pennies, we're talking about like between one cent and 12 cents, or 15 cents or something along those lines per hour, which sounds ridiculous. But as I talked about, in another episode, did the value realization of our content is happening, you are not able to generate the same amount of money you used to even a couple of years ago, off of the exploitation of the film itself. because things are people are changing streaming, the streaming wars are in full effect now. So everything is changing so so rapidly. So you as filmmakers need to change the way you look at things before you're like oh, Amazon is the only way to make money or DVD was the only way to make money or, you know, movie theaters are the only way to make money. There is multiple ways to generate revenue. And if your only hope is that you're going to get paid money from Prime, it's to make money for your film or to get your money money back from your film, you are in a bad bad shape, that is a bad place to be. Again, I'm going to keep busting out the film shoprunner method, you have to diversify your revenue streams. Amazon is one of many revenue streams that you should generate from the exploitation of your film. And furthermore, you should of course create more ancillary revenue streams from products and services and other things that you can generate from the film. But I've gone deep detail about that in the book, and in other episodes. Now, why has Amazon done this? Why did Amazon drop their rates so much and raise drop the low end and hot and raise the high end? The reason why is that Amazon Video direct, they are the only major platform streaming platform that allows direct uploads from independent creators. By doing that, they opened the floodgates up to a lot of crap, to be honest with you a lot of bad movies, a lot of low quality stuff that is bogging down the system. So that was one of the reasons a few months ago, if not less than six months ago or something. They just started pulling movies off without any reason any, any reason any warning, they would just literally pull titles off the dish, the infield was good anymore. And you know why they could do that? Because they can because they're Amazon and that's their, that's their sandbox. Like I've said many times before, when you play in someone else's sandbox, you got to play by their rules. And if they want to take their toys and walk away, guess what, they're gonna do it because they own the sandbox that you're playing in. So the reason why they did what they did is they want to discourage this lower end quality content to be uploaded. So if you if they go look at the low end, you're only going to get a penny an hour. So if your stuffs not really that good, don't bother. That's basically the message They're sending to independent creators. And for better or worse, that's just the way it is right now. But on the flip side of that, it is good news for good high quality content and high quality movies. And in the show notes of this episode, I lay out all the things that Amazon is requiring, or factors to contribute, that will help you in the algorithm and Amazon's algorithm to get paid more per hour streamed. So here are some of the things that you need to do to be able to get paid more on Amazon per hour of streaming. First thing they're looking at, or the algorithm is looking at is unique customers, the amount of current and new Prime members that view your title, meaning that if you can generate more people to come and watch your movie or your content on their platform, that's a plus. Next thing is streaming hours, the time each customer spends engaging with your content. That also includes sharing, commenting, reviewing, all of those things are included in the interaction or engaging with the content. So if you can have people click on the share button from your Amazon page of your movie, that helps it also the rating on IMDB, because Amazon owns IMDb. So if you have a higher rating on IMDB, that also is a factor in their calculations. Next thing that titles popularity, if you have notable talent, meaning high end actors, recognizable faces, people who are popular, that helps if you have relevant genres, meaning that if there's a genre that that is being really well consumed on Amazon, that's going to help again, your IMDb presence and rating helps. And box office performance is also a factor. So if you were in the box office, and you made money, if you're bigger, smaller, it helps in the algorithm. And finally, the title caliber things like having a compelling and high quality poster really helps having accurate and Representative copy. And metadata is super helpful. Meaning the more details you have, the more little keywords you're able to put in there, the better. And also localized subtitling and key art for those sections. So if you have subtitles for outside countries and key art for those outside territories, that's going to be a plus. Because right now currently, Amazon's looking to expand in these other emerging markets. Basically, Amazon's making you work a little bit harder for those pennies that they're giving you. But that is the reality of the world. You can bitch about it, you can complain about it. Or you can get on the you could get on the train and go or you get off and pout, it is up to you. This is the new world guys. When I say the new film economy, this is part of that new film economy. Things are changing daily, weekly, monthly, it's changing very, very fast. What was true six months ago is no longer true today. What is true today, as of this recording, in a month in January 1 will change. Amazon will change the way they do business with independent content creators. So you have to understand and be aware of what's going on and adjust, pivot and make it work. If not, you'll be left behind guys, this is just a bottom line. Now here are some best practices for customer engagement. According to Amazon, make sure you review your dashboard performance metrics to identify engagement trends, top performing titles and more. You can use these insights to bring additional selection and quality content for customers on prime. providing accurate, crisp, clear and compelling title metadata, like your synopsis and description will help. You should absolutely create an IMDB page for your title. If your movie already has an IMDB page, make sure that production and award details are accurate and up to date. Align your programming with seasonal relevancy. So horror movies for Halloween, holiday movies for the holidays, love stories for Valentine's Day and so on. Now, a power tip and Amazon power tip I can give you is because Amazon is looking to expand outside of their core countries that they've already established themselves in is if you have a movie and you happen to have dubbed versions of that movie in other languages. That is a huge, huge advantage. for you. So if you have a movie in English, and you have a dubbed Italian version of that same movie, and you place it in that territory, you will make a lot more money, I promise you, you'll make a ton more. So if you're able to generate dubbed versions of your movie for different territories around the world, that's going to be a huge, huge moneymaker for you now, does it? Does the cost of create a dub version Make sense? Or is the ROI make sense for you to do that? So if it's going to cost you $5,000, to do a dub version of your films, so you can put it in the Italian market? Does the Italian market have that? Can you make enough money in that market to justify that cost? That is up to you, if you happen to be one of those films on older title, maybe that has dubbed versions already done, and that that's already been paid for long ago, you'd be foolish not to upload your films directly to Amazon Video direct, and publish them in those territories. Another thing that Amazon will be looking for is social media metrics, meaning that the more that you send traffic from all the big social media platforms to Amazon, will also help you get a little bit more of a push by the algorithm. And one last thing is, if you're with a studio, that a bigger distribution studio, that adds to the algorithms help. And there's a handful of studios out there who have been identified by Amazon as a studio, there's not a lot, there's probably 1520, something along those lines. So there's not a lot of those studios. But if you happen to make a deal with a distributor, ask if they are a studio on Amazon? And are they identified as a studio and to send you their studio page. So you can verify that they're an actual studio and find out because that does help with the algorithm as well. Now, I hope this episode was helpful to you guys. I know a lot of people were going crazy, like what are we supposed to do now? How are we supposed to make any money with our movies? Again, if your main distribution plan was to upload this to Amazon Video direct, and that was the only way you're gonna make money. I'm sorry, that's just not the way the world works anymore. It's just not the way it is. It might have been a handful of years ago, when Amazon first launched, they were paying obscene amounts of money, you were making 10s of 1000s of dollars, but those days are gone. Gone. So you have to look at the new landscape, the new film economy that is going on right now. And seeing what you can do, how you can pivot? How can you adjust your approach to the marketplace, so you can generate revenue with your film, again, you need to start thinking like a film intrapreneur, you got to start thinking like an entrepreneurial filmmaker, you have to generate multiple revenue streams that you control, to be able to generate revenue for your movie, that is the key, that is what is going to save you, that is what's going to make you more resilient to any major changes in the marketplace. So if I have 15, or 20, different revenue streams coming in from my movie, and I control most of them. And you know, one of them, like Amazon just dies on me or for whatever reason the algorithm changes, they decide to start paying you one cent per hour, whatever that is, then you have 14 other revenue streams to fall back on, you have to diversify your revenue income. That's just the bottom line. If you don't, you're setting yourself up for major damage, and a lot of pain. So it would be the equivalent of me investing in one stock, let's say pets.com. Back in the early 2000s, there was a stock that was called pets calm. And imagine if I would have taken my life savings of $200,000. And I would have invested everything in it because it was hot. It was what was going on. And that was the rep and I was making money with it left and right. But when that company went under when the entire.com crashed happened, I would have been left penniless because all of my money would have been tied up in one stock in one company. So that's the same mentality that so many filmmakers have. They've they put all their eggs in one distributor in one company to make all the money for them. And you can't do that you have to think like a film intrapreneur you've got to diversify your revenue streams coming into your movie. And once you have 12345 movies like that, now you have a business. I know it's crazy, but now you have a business so each one of those movies might have 10 or 15 revenue streams. So now you're talking about close to 100 revenue streams coming in from your movies consistently daily, while You sleep. That is the goal. That is the dream. And if you're able to make 20 movies, 10 1520 movies, and you're able to generate all those revenue streams, and once you have those systems in place, then it comes, it becomes turnkey. And all of a sudden, you're able to build a business out of this. That is the key. So I hope that this episode shows you that you shouldn't freak out, because one revenue stream decided to change the game, because I promise you, all these other revenue streams that you might have all these other companies, Netflix, Hulu, all the new streaming platforms are coming out, DVD, whatever the revenue stream is, if you put all your eggs in that basket, I promise you you're gonna lose might not be now but you will lose in the long term. I mean, look at companies like Hulu, I sold my movie. This is Meg to Hulu two years and change ago. They're not buying independent films right now. Why? Because when Disney bought 20 Century Fox, they became the majority shareholder in Hulu, and they changed the game. That is the way this world works, guys. And it's not like the olden days where revenue streams and distribution outlets were pretty stable. And when they change, they change slowly. It took a long time, for VHS, to turn to sell through VHS, to turn into DVD to turn into blu ray to turn into rental revenue to turn into streaming and so so but if you notice it's starting to pick up the speed now is like it's lightning fast, it's changing so fast, you can't even keep up. But as independent filmmakers, as filmtrepreneurs, it is now your job to understand what's happening in the marketplace. If not, you will fail. If not, you will not be able to make a living doing what you love to do. Bottom line, straight raw bottom line talk here, guys. So you need to understand the marketplace, you need to understand how you can make money in the marketplace. And then you need to understand how you can generate revenue outside of the traditional marketplace, like ancillary product lines, like services like other things that you can build out around your film to make money. Now if you want to check out the show notes and have all these links and information about Amazon and what they're doing, and specific policy guidelines, best practices and all sorts of other stuff. I put everything in the show notes at indiefilmhustle.com/366. And guys, if you haven't already, please leave a review for this show. And share this information with as many filmmakers as possible share this episode with as many filmmakers as possible. We as a community need to help each other, survive and thrive in this new film economy to survive and thrive in this business. This is a revolution I want to start a revolution in independent filmmaking, I want filmmakers to take back control of how they make money with their movies with their content. That is what needs to happen if we're going to survive the new film economy. So if you can, if you haven't already, please leave a review for the podcast at filmmakingpodcast.com. And I will have a surprise for you next week. Guys, I have a couple surprises for you next week, because that's who I am. And I like to surprise you guys. So one is I will be releasing the new trailer for on the corner of ego and desire it is coming out next week. So keep an eye out on it from all all my social media platforms on YouTube and so on, I will finally be releasing that trailer and the movie itself will be released on the 21st of January 2020. A few days before the Sundance Film Festival. It will be available on Amazon on Apple TV, and of course on indie film hustle TV, which will have exclusive content available nowhere else. And exclusive audio commentary as well as behind the scenes of how we were able to shoot a $3,000 feature film at the Sundance Film Festival in about four days. I'm super excited to finally bring this movie to you guys. It's been way too long. It will never happen again. I hold so long onto a movie. But I was busy guys. I was writing books, I was doing other things. And I wanted to kind of wait for this perfect timing to release the film. So I can't wait to hear what you guys think about that. But that's coming out next week and I have a special Christmas edition of the podcast coming out which is going to be a lot a lot of fun. I promise you. So thank you for listening guys. As Always keep that hustle going. Keep that dream alive. And I'll talk to you soon.