IndieFlix vs. CreateSpace #4

(This is a reprint of blog originally posted at http://nwrann.wordpress.com on August 10th 2009. Future IndieFlix vs. CreateSpace blogs have clarifications as well as the outcome of the comparison.)

Background: My first film, "Hunting Season" was released nationwide on August 1st, 2009 via Cable and Dish Video on Demand (VOD). In conjunction with the VOD release I wanted to capitalize on the added exposure by offering DVDs for sale on-line. The best way to do this without dropping a minimum of $1,000 up front is to distribute through one of the DVD On-Demand sites, www.IndieFlix.com or www.CreateSpace.com (there are others but these seem to be the most popular). Since both sites are non-exclusive I decided to distribute through both of them simultaneously to see which one offers the “better” (in my opinion, for my needs) experience, and document it all here.

I have 2 requirements:

1. I will ONLY be selling DVDs on Demand. Both of these sites offer numerous digital download options. None of what I write about here will take that into consideration.


2. I want to price the DVDs as low as possible but still make an acceptable amount of revenue per disc (equivalent to the average that I will receive per VOD purchase).

Please see the previous blog post “IndieFlix vs CreateSpace Day 1″ and IndieFlix vs CreateSpace Day 2 and IndieFlix vs CreateSpace Update 3 to catch up.

I've pretty much completely written off CreateSpace as an option at this point. It has NOTHING to do with their service. The fact is that, at this point, IndieFlix is offering me everything that CreateSpace is offering, and more.

I received some responses from Mike Williams (the Filmmaker Relations & Acquisitions guru at IndieFlix and my contact):

My Question:

"I'm sorry to keep bothering you but I have one more question before I send my master DVD in. What is the best way to make the Master? I burn with iDVD. Should I put a menu page? Should the Trailer be on the same DVD? or should I save it as a Disk Image or just save it as a Video_TS folder?"

Mike Williams' response:

"Yes, ideal would be for you to submit your DVD with menus and a trailer included on the disc. However, that’s not a requirement if you don’t have that available."

Perfect. That's easy enough. (And I'm going to slip a trailer for my second movie "Burning Inside" on the disc too. See if we can drum up some advanced notice for its future release.)

My next question (this is in regards to distributing the disc through IndieFlix on Amazon.com):

"How do the royalties work when IndieFlix goes through CreateSpace? In the research I've done the rates are different? Does the 70/30 IndieFlix split happen after the Amazon 60/40 - $4.95 split?"

Mike Williams' response:

"Yes, the royalties through any revenue source we offer is 70/30 or the NET (rather than Gross) so prior to our begin paid we have to pay out any costs. In the case of Amazon DVD (via CreateSpace), we pay out their $4.95 and the remainder is our Net Royalty with 70% going to you."

Holy CRAP! That's considerably better than CreateSpace's deal with Amazon (which is that Amazon takes 40% off the top, then minus $4.95 and the filmmaker gets whatever is less).

"I just want to clarify
one thing about this. The only COST prior to the IndieFlix NET through
Amazon via CreateSpace is the $4.95. So the 40% that Amazon normally takes
on top of the $4.95 (if I were to go through CreateSpace myself) does not
apply?

For the following scenario: Retail price = $14.99

Amazon Via CreateSpace: $14.99 - 40% - $4.95 = $4.04 (to filmmaker)

IndieFlix Amazon via CreateSpace: $14.99 - $4.95 = $10.04 (NET) - 30% =
$7.02 (to filmmaker)



Is that how it works? If so, AWESOME! I'll have my DVD and agreement in the
mail as soon as I hear back from you."

Mike Williams' response:

"IndieFlix has a different, enterprise, deal negotiated with
Createspace/Amazon than is available for individuals. I believe $4.95 is
correct but since IndieFlix usually doesn't use that service unless by
filmmaker request, I'm actually less familiar with those details as I should
be. I've just left a message with our enterprise contact there to make sure
I have the correct numbers. Unfortunately it sounds like she's on vacation
through the weekend (as is our CEO and Accounting who'd know the details on
this end) so I'll probably have to get back to you next week on that point.



In any case, you're free to select only those revenue sources that work for
you when working with IndieFlix. I'd love to have you get the submission
underway so that we can screen HUNTING SEASON and once it's accepted get it
into the release queue for IndieFlix.com. Subsequent to our accepting it we
can work out what third party outlets work best for you. And, of course,
you're not locked-in with us so you're free to pull the plug at any time."

And then the next day I received this from Mike Williams:

"I’ve just gotten word from Createspace that I did actually have the incorrect split on that. IndieFlix pays $4.95 only for our internal orders from them. For sales on Amazon.com we get a straight 42.5% of the selling price. So, a title for sale on Amazon.com at $12.99 would earn a $5.52 royalty. Of that $5.52, you’d receive 70% and IndieFlix 30%.

I hope that helps. As always, please feel free to let me know should any further questions/concerns arise."

Let's see how that stacks up against selling on Amazon directly through CreateSpace:

For the following Scenario: Retail Price = $14.99

Amazon via CreateSpace: $14.99 - 40% - $4.95 = $4.04 (to filmmaker)

Amazon via IndieFlix: 42.5% of $14.99 = $6.37 @ 70% = $4.45 (to filmmaker)

That comes up pretty close but the IndieFlix deal is still better. Of course this deal will fluctuate with the retail price of the DVD:

Let's look at it with a $12.99 Retail Price:

Amazon via CreateSpace: $12.99 - 40% - $4.95 = $2.84 (to filmmaker)

Amazon via IndieFlix: 42.5% of $12.99 = $5.25 @ 70% = $3.86 (to filmmaker)

Now we've got a $1.02 difference. Which is pretty considerable. As the retail price of the DVD goes down (= better for the consumer) the IndieFlix deal is better for the filmmaker. The CreateSpace deal is better for the filmmaker when the retail price is somewhere between $15.99 and $16.99 and up. Requirement #2 above is to keep the retail price as low as possible. In order to do that IndieFlix is the only way to go. In fact at a $8.99 retail price through Amazon via IndieFlix the filmmaker is bringing in $2.67. Amazon via CreateSpace nets only 44 cents.

Plus IndieFlix offers a straight 70/30 split for disks sold through their own site.

SOLD.

My MASTER DVD and Filmmaker's Agreement will be in the mail tomorrow.

P.S. You may have noticed up there that Mike Williams made this statement:

"...I'd love to have you get the submission underway so that we can screen HUNTING SEASON and once it's accepted get it into the release queue for IndieFlix.com. Subsequent to our accepting it we can work out what third party outlets work best for you"

I underlined a few key words in there. Those terms are the somewhat "gatekeeper-ish" which can be a bit worrying. There is still the chance that IndieFlix may not deem "Hunting Season" fit for their distribution. At which point the game is over and I move forward with the CreateSpace distribution model. I will be sure to keep you informed.