Filmmaking Blog Posts by Indie Film Factory

Is Amazon Video Direct really a good partner for indie filmmakers?

In today’s post, I would like to talk about Amazon Video Direct (AVD) and whether it is a good partner for indie filmmakers.

As some of you know, I have been a huge advocate for this platform since its launch. I have recommended it to dozens of filmmakers as an alternative way to earn royalties from their creative endeavors.

Before AVD, there was CreateSpace, which was owned by Amazon. It allowed filmmakers to publish their work directly to the Amazon marketplace by selling DVDs, and offering streaming and digital delivery options to customers. Back in 2016, CreateSpace migrated all of their film clients to the Amazon Video Direct platform, allowing indie filmmakers to reach millions of Prime Members world wide. It became an alternative to Netflix, and for a while was the best thing that happened to self-distribution.

However, like any good thing for the indie filmmaker, it’s quickly dismantled.

Last month, members of AVD were notified that Amazon will cut royalties nearly 60% effective March 1. Previously, filmmakers self-publishing titles on AVD were earning $.15 per minute streamed domestically and $.06 internationally. It was a fair rate and allowed filmmakers to see a little cash each month for their efforts.

BUT NOW… Starting March 1, 2018, royalties for Prime Subscription Access will be paid according to a new rate card on a per title basis (for standalone titles and seasons) based on aggregate hours streamed by customers worldwide. The new rate card is as follows:

Tier 1
For titles at 0–99,999 hours streamed
$0.06 – US
£0.04 – UK
€0.05 _ Germany
¥6.80 – Japan

Tier 2
For titles at 100,000–499,999 hours streamed
$0.10 – US
£0.07 – UK
€0.08 – Germany
¥11.30 – Japan

Tier 3
For titles at 500,000–999,999 hours streamed
$0.15 – US
£0.11 – UK
€0.12 – Germany
¥16.90 – Japan

Tier 4
For titles at 1,000,000+ hours streamed
$0.06 – US
£0.04 – UK
€0.05 – Germany
¥6.80 – Japan

Hours will start accruing when the title is streamed for the first time and will continue for a 365-day period. After the 365-day cycle, the streamed hours resets to zero and earnings will begin again at the lowest tier. AVD logs and calculates customer streaming to the second.

The new rules force filmmakers to reach over a 100,000 hours streamed within a year in order for their royalty rates to be paid at $.10 per minute streamed. That is nearly impossible for most average filmmakers to reach, unless they have major marketing budgets or simply get lucky! And even if they did reach 100,000 hours streamed in a year, they’d have to get to 500,000 hours streamed in that same timeframe to get back to the rate you were getting paid previously. I would suspect that most independent filmmakers will now be looking at .06 cent per hour streamed indefinitely, which is a dramatic decrease in revenue. You would make more money selling recycled bottle caps!

Meanwhile, AVD will continue to benefit from all the paid ads, SEO and social media advertising it gets from filmmakers promoting their movies. Its a win-win for Amazon and a lose-lose for the filmmaker.

Also an interesting side note, in addition to cutting back royalties rates to independent filmmakers, Amazon has increased the cost of monthly Prime memberships nearly 18%, and is raising the rental and purchase rates for videos and movies across the board.

One can only make the assumption that this new move will be benefiting for Amazon and crippling to content creators. And although there has not been any official comment as to the reason why Amazon made this move, it is probable that the rules are designed to clean up the platform, chasing away the smaller companies and keeping more profit.

Changing royalties isn’t something new to Amazon. The same thing happened in 2013 when Amazon’s publishing devision decided to cut royalties to self-published authors. The outcry was enormous, and since then, Amazon has made every effort possible to offer more reasonable royalty earnings for self-publishing. Perhaps that same thing will happen (in time) with independent filmmaking. We shall see.

As an independent filmmaker it is always my goal to figure out alternatives for distribution. That being said, I have a really great distribution partner that helps me get my content out across the world. I’m one of the lucky ones.

However, this isn’t the case for a vast majority of creatives who are making movies in the budget realm of $30,000-$100,000. Most filmmakers end up stuck with crumby distribution deals, and have to wait years (if not forever) to get their money back, or to make a profit. This was one of the main reasons I supported platforms like AVD. It gave filmmakers the ability to compete. Regardless of a film’s budget, everyone was on an even playing field. It didn’t matter whether or not you got into one of the big festivals. We were all in the same conversation. But this recent move to decreasing the royalties, only adds speculation that the company is moving more toward the Netflix model of inclusion. It also makes being competitive in this market even more challenging.

But as I digress, the silver lining in all of this is that for the first time in history, independent filmmakers have had a taste of success. And now that we’ve had that taste, it will be very hard to get us to go back into the dark ages of indie film distribution. I suspect that there will be new innovations moving forward. I also think that as a collective community, we will figure out new ways to reach audiences and distribute our content without needing a Goliath. And perhaps this set back with AVD will open the door for other platforms such as Hulu, iTunes, and YouTube step forward offering filmmakers more competitive options. Because in the end, what we do does have a purpose, and there is a market for it. Its up to us to soldier on.

As a special note, if you are a AVD member, I encourage you to write them and let them know your opinion with these new rate rules. Perhaps with enough conversation, Amazon will consider a more fair system moving forward. Maybe they will continue being champions for independent film distribution.

I hope you all enjoy the rest of your weekend, and keep creating!

Indie Film Factory, LLC

Indie Film Factory, LLC

Ironic mustache

Kelly Schwarze is an Emmy © Nominated filmmaker who has written directed and produced 6 feature films, dozens of music vides and commercials, and has owned successful media companies in Las Vegas. 

Kelly also does one-on-one consulting for filmmakers. Click here for more details.

All Rights Reserved © 2016 Indie Film Factory, LLC

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