This tweet from Ben Cousins over at ngmoco (looking forward to The Drowning!) got me thinking:

In a response, I said that's true if you consider the entirety of the movie industry (where some people buy everything they watch, while some pirate it - and yet another group pirates the movies and buys a lot of movie-related merchandise), but that on the level of any one movie, if they're analyzed from a free-to-play angle, they're terrible businesses.

I guess that obligates me to write something about how would a free-to-play movie work. Not being very well versed in the details of how movies get produced today, I guess I'm either way off in the deep end, or in an advantageous position to speculate about it. Take your pick, shoot me down in the comments. It's entirely possible it's not even possible to make every movie work as a standalone free-to-play (in which case we're back to something like Netflix as the freemium business model for movies), but since we did figure it out for games, why shouldn't we try to figure it out for movies?

What's a good free-to-play product design like? A quick summary:

  • A basic version of the product should be available for free. If someone's motivated enough, they should be able to enjoy the full experience without opening their wallet, but they'll have to contribute in some other way. Pirated movies don't count, that's not contributing. Ad support is a weak solution - better than nothing, though.
  • "Basic" doesn't mean low quality, because the free product should be as engaging as the premium version. A low-rez online clip doesn't cut it, it just drives people back to piracy.
  • The bar to spending money should be really, really low and well incentivized. An Amazon $0.99 rental for 24h counts, iTunes store $15 download does not. The incentives still need work, though - ease of access, good recommendations, easy streaming to the big screen are a good start.
  • The upper limit to how much one customer can spend on the product should be high enough to be practically unlimited. Spending more should always result in some additional marginal value.
  • High value customers come in two shapes: those who buy something really expensive once (such as a collector's edition, like Ben was linking to), or those who keep spending, again and again.

In some markets and for some movies, the industry does manage to capture the middle. However, these are not optional points for a free-to-play design. You have to consider all of them, or you're turning away customers. A free-to-play design typically expects a few percent of the audience to pay for their experience.

On the level of basic free edition, the easy suggestion to make is to have each movie be viewable from its own site in exchange for a Facebook Like or a retweet. By doing that, free viewers are contributing viral visibility to the product. As I mentioned above, this should not be a crappy low-rez edition, but a real, enjoyable stream. Done this way, movies would have to have stable, long-term addresses, rather than the marketing campaign sites they now have, but that would be a good thing. Free-to-play is a lot about the long tail, in both volume and time.

That site can sell offline copies as DVD or BluRay for someone who (for whatever their reasons) can't or doesn't want to stream. That may be quaint, but hey, people still buy vinyl, too. It can also rent the movie for streaming to something else than a computer. Clearly, there would need to be several incentives for someone to want to contribute a couple of bucks for the regular edition of the movie, and this is probably the hardest thing to get right. Eg, you could charge for pause function, but that would be a pretty dick move, likely to drive away people who would otherwise enjoy the experience. Perhaps the free edition should only come to play a month after release, until which streaming always costs.

Stuff like comment tracks, making of, etc can be a paid extra. They're made for true fans, and true fans are by definition willing to pay for the work. Some of that stuff can reasonably be priced much higher than it typically is, today.

Selling merchandize and collectors editions are obviously something the site should feature. It should also have exclusive items, such as limited edition access to the production crew. Just look at any of several successful Kickstarter campaigns to see what might a $5000 edition of a movie be packaged with. Today's featured documentary on Kickstarter about the Arab Spring has 10 premier night tickets next to the crew for that price, and another reward for double that (check it out yourself). The Kickstarter rewards are time-limited, but a free-to-play movie should have similar items available for fans throughout its distribution lifetime. They will need to be refreshed. Free-to-play is a service, not a product.

A re-watch would need to have some special features for it, all of which could be paid stuff. This would benefit some movies much more than others - and create an incentive for artists to create more movies like that. I wouldn't mind!

Now, I haven't even tried to run any numbers on this thought experiment, and I don't know where to pull the reference data. According to Box Office Mojo, last year's top grossing movie was The Avengers at $623M US, and on position #100 was The Five Year Engagement at $29M US box office revenue. The same site estimates US ticket prices today at $8.05, so that would mean 78 million US viewers for Avengers and 3.6 million for "5 year". However, those figures probably do not include rentals or online, and almost certainly do not include merchandize, which I would guess is a substantial extra for Avengers (and included in my suggested model above), so basing any comparisons on those data points would be very flawed.

A blockbuster film like Avengers collects most of its revenue very close to the release date, but other movies, like the perennial favorites Sound of Music, The Wizard of Oz and It's a Good Life, or somewhat more recent examples like Pulp Fiction, Inception or The Fight Club would keep racking views and revenue for years, even decades. So, would the Avengers ever get its current revenue as free-to-play? Perhaps not. Would Five Year Engagement? I don't see why not. Would Pulp Fiction or Fight Club, neither of which apparently make it to the all-time top 200 grossing movies on Box Office Mojo be able to generate a billion dollars off their engaged fan base over time? Of course they would.