Kevin Smith is an American film director who has made a fantastic demonstration of digital democratisation. In a speech at the Sundance Film Festival, talking in front of numerous people who were expecting to be bidding on his film to start marketing it, Kevin Smith made it clear that he was not going to take a normal approach. After talking to the audience about how bringing a film (Red State) to the public can cost 3 or 4 times what it costs to actually produce, Kevin Smith explained that he was not releasing it to the public in a normal format. Instead, he was going to just release it by himself without all the marketing costs. The purpose of his speech was to simply raise awareness of digital democratisation but also use it as an opportunity for a shout-out to his video which he was asking to be shown in cinemas.
In the end, Red State was released to a number of different screenings, along with the sales of merchandise. On top of this, Red State was available on VOD. The fact that there was very little advertising for this film, meant that there were fewer costs. But was this really successful? Let’s take a look at the maths.
So for the costs, Kevin Smith estimated that it would cost about $4,000,000 to fully produce the film. On release, it was shown in 15 city screenings, along with merchandise, which made roughly $1,000,000. This is a fantastic figure for this particular film to generate, effectively Kevin Smith has made back 1/4 of the costs already after a few weeks. However, it doesn’t stop there. There has been a further $1,500,000 worth of sales from foreign countries, and then a further $3,000,000 generated from North American VOD.
So, the costs were $4,000,000 and the sales were $5,500,000 after a relatively short period of time. This means that the net profit was in fact $1,500,000 after a few weeks. This is a huge achievement which worked extremely well in the situation. The reason behind Kevin Smith making profit so quickly, is primarily because the costs were reduced significantly. Marketing could easily have cost another $15,000,000 which is just more money which needs to be earnt back.
This is another fantastic case study example of digital democratisation. Kevin Smith takes on a completely new approach and releases it in a different way to the usual trend but in a way which makes him more successful than he would have been otherwise. Had he released his film in the usual way, he may well have still been trying to earn his money back today. Instead, he has been successful and has time and a good reputation to be working on other films. One of the primary reasons this has been such a successful technique is that Kevin Smith made good use of VOD and generated a huge amount of his money back from that. VOD is a relatively new concept, and so it just emphasises that releasing a film to the public these days is a completely different process when comparing it to releasing a film in the past. Effectively, VOD has allowed other films to be released which have profited which might have not done so in the past. Therefore as a consequence, there is more competition for films and also a wider diversification, which is a benefit for the consumer but a negative to big companies releasing tent-pole productions because it takes away some of their business.