Why does Fandor have a 50/50 royalty split?

Fandor blogWe recently received a great reply to an interview our Chief Content Officer Jonathan Marlow gave to Beyond the Box Office about the Fandor revenue share model. The commenter asked: “why should a filmmaker, who puts their blood, sweat and tears into the creation of their film, give Fandor 50% of the revenue it earns on your service?”

Good question! This post attempts to clarify how Fandor works with filmmakers, in what ways we add value and why we think the revenue split works for all of us.

First of all, it’s worth emphasizing that in general our license agreements are non-exclusive, meaning Fandor is just one part of a filmmaker’s digital distribution strategy. We live in a time of incredible opportunity for filmmakers to realize the value of their content. What Fandor offers is a subscription revenue option designed to maximize the potential for your film to be seen by a new audience. Our strengths are expert curation paired with discovery and exploration features. What we are not is a just a catalog of well-known films.

Additionally, building a subscription VOD service is VERY different than building a transactional VOD service. We need to attract people to the service as a whole, not only to a specific title. We also need to provide an exceptional, gratifying viewing experience so subscribers will stay with the service and continue to watch movies.

How do we accomplish this? Here are some of the things that we do with our 50%:

  • Presentation
    • We take on the full costs of preparing films in the highest quality resolution, offering films in HD whenever possible (many other services do not absorb these costs).
    • We perform exhaustive quality control on all of our media sources.
    • We provide a rich context for films, including publication of our digital magazine Keyframe, which features leading film writers and video essayists along with David Hudson’s Keyframe Daily.
  • Product Development
    • Our website is designed to drive discovery – and viewership – of your film (this is important because under our revenue model, filmmakers get paid more the more their film is watched). For example, we have showcase features such as Spotlight (a curated collection of films that revolve around a common topic) and Journey Into Film (curated film playlists that explore a shared theme or cinematic motif). Our analytics show that when we include a film in one of these collections their viewership increases about 200% over a two week period.
    • Our product development is focused on continually integrating new technology that makes your films easier to find and available on more platforms and devices. (There’s lots of stuff that we can’t talk about yet but will be rolling out in the next several months. Stay tuned.)
  • Marketing to film enthusiasts
    • We regularly work directly with filmmakers and distributors to co-promote films.
    • By building a strong brand presence in the film community, people know to come to Fandor to watch great independent movies.
    • We run social marketing campaigns on Facebook, Twitter, Pinterest, YouTubeGoogle+ and Tumblr.
    • We run targeted digital outreach campaigns to bring film enthusiasts directly to film pages.
    • We make sure that search engines find your films by title, director, cast and crew, topic, genre…you name it.
    • We maintain on-going email marketing campaigns to let viewers know about the great new movies we’re featuring.
  • Audience analytics, to make sure we know:
    • What is being watched.
    • What type of films we should try to get more of.
    • What product features viewers want.
    • What product features people don’t use.

The value of Fandor to the viewer is in the breadth of the library, so the more we all work together, the more revenue gets generated both for Fandor and filmmakers. We want to align our interests with the content owner’s interest so we all share in the ever-increasing value of our service. To date, we have received extremely positive feedback from the filmmakers and distributors we work with.

Thank you for taking the time to read a little bit about our 50/50 revenue split. I hope this clears a few things up. I very much welcome additional comments and questions and would like this to be an ongoing dialog.

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