How to Sell DVDs and Videos Online and On-Demand: Part 2

by Huntley in Author Tips, General, Selling Video Online / 03.17.10

This is a continuation from How Sell DVDs and Videos Online and On-Demand: Tips Part 1. In Part 1, we address whatsell-key we’ve learned about selling video content online in a paid and on-demand format specifically in the areas of previews, SEO, streaming options versus digital downloads, upselling and alternative models (subscriptions and a la carte and bundled models) and preparing DVD or other content to be “web-ready.” Here, in part 2, we’ll pick up where we left off and continue on to talk about pricing/conversion, DRM, competing with free/ad-supported content, production quality concerns, and the distinctions between ‘making it available’ and ’selling it.’

On the off chance that you didn’t read part 1 (umm, which you should *totally* do), let me tell you a bit about me and MindBites so you know how we’ve come to learn all the nuggets we’ve picked up along the way. MindBites is a platform through which you can sell access to your video content in an online and on-demand format. You can use the MindBites platform to create a streaming video-on-demand store on your own site or you can sell through our marketplace.  Since we started in this space a few years back, we’ve learned a tremendous amount about how and what to think about when you’re considering a move to make your DVD or video content available online in a streaming on-demand format.

6. PRICING  - The penny gap persists.  Venture Capitalist Josh Koppelman coined the term to explain how the “gap” in getting someone from $0.00 to paying $0.01 is substantially bigger than the gap in getting them to move from paying $0.01 up to paying $0.02.  This is particularly true in the paid video space.  Interestingly, I’d take it even further.  It’s hard to control for all of the different factors that contribute to conversion (the % of visitors that opt to purchase a given video lesson on our site), but we do generally see increases in conversion rates as prices move from $1 to $5.  I attribute this to a bit of a ‘get what you pay for’ mentality - users think, ‘if it’s only $2, it’s probably not going to be sufficient to meet my needs’.  Interestingly, even beyond $5, we see revenue per visitor continue upwards despite declines in conversion rates.  At these price points, the increased revenue on each sale more than makes up for the fact that a smaller percentage of people are buying.  Unfortunately, the trick to pricing lies in the realization that there is no trick - data-driven decisions need to be made, so pricing optimally is going to require both experimentation and meticulous tracking.

7. DRM - We get asked frequently if someone could conceivably buy and download an author’s video and then share it with a friend or even upload it elsewhere.  Unfortunately, the answer is yes.  There is no perfect DRM solution out there, and honestly, the pace of DRM technology seems to pale in comparison to the pace of piracy technology innovations.  The best DRM options out there require a user to download a particular application and video player in order to access videos.  Unfortunately, even with these, not all systems can be supported (many are PC-only), and if someone knows what they’re doing, they can easily set up their computer to record what is playing on their screen and thus obtain a copy that they can do what they want with.  It’s obviously illegal to rip or steal or re-purpose someone’s content without their consent, and thus, if someone is caught (by you or us or anyone), they can face civil and criminal penalties. That said, much like selling DVDs, there isn’t any way to completely protect material from being pirated and shared with friends or even sold illegally.  This is also one of the greatest challenges that DVD producers contend with - people buying their DVD and then copying it and selling it to others (oftentimes in mass quantities).  One thing we do offer to authors at higher MindBites platform levels is the ability to set lessons to be ‘Stream-Only’ (as opposed to both download-able and stream-able). Even this, though, is not a perfect solution. If someone knows what they’re doing and has the right software, they can unfortunately pirate anything they view online.  That said, we have come to believe that most people are good at their core.  And, if given the option, they will pay for something instead of stealing it.  Plus, as a video content producer, the biggest risk you face is not in someone stealing your content but instead in no one purchasing it.

8. COMPETING WITH FREE/AD-SUPPORTED VIDEOS - It’s no surprise that your content is going to have to compete with other content out there for eyeballs.  Many people ask us about these dynamics, and it’s good to think about them.  What we’ve found is that people are willing to pay for what they are looking for.  That said, conversion rates vary pretty substantially across subject areas.  Generally speaking, the more free stuff there is out there, the more you need to make sure your content addresses some need that those free videos don’t address. AND, even more importantly, you need to highlight these things in your text description.  Even with the explosion of free content online, a blend of content models will continue to exist - some will be free and some will be ad-supported.  Historically, we’ve seen that content that errs towards the ‘entertainment’ side of the spectrum tends to skew towards ad-supported models and content that errs towards the ‘educational/informational’ side of the spectrum skews towards paid models.  That said, it’s not hard to find exceptions in both of these cases.

9. PRODUCTION QUALITY - How good does it need to be?  A new study from Nielsen (covered here on Mashable) recently suggested that people were more inclined to be willing to pay for video content if it was professionally produced.  This makes sense.  The challenge, though, is that there are other factors to consider.  First, prices can be set to take production quality into effect.  If there are two videos out there that offer exactly what you need but one has poor lighting, will you deal with poor lighting to save yourself $10?  Probably so… unless it is really poor lighting and you really need good lighting to understand the concept and get any value out of the video.  Thus, even if you don’t have an HD-quality video, people are still willing to pay for it if it contains the information they want and is priced accordingly.  The other consideration here is that everyone has a different notion of what ‘user-generated video’ looks like.  In my mind, I immediately jump to grainy/jumpy YouTube videos.  Truth be told, cameras and editing software have come a long way.  While neither you nor I could put out something to rival Avatar, the tools available to the average consumer these days (for consumer prices rather than professional prices) can help you to put something together that’s pretty compelling and that looks pretty professionally done.

10. MAKING IT AVAILABLE vs. SELLING IT - As with any business, selling your video content online is not simply a matter of just uploading it and making it available for sale.  You’ll get some organic traffic that way and will likely generate some sales that grow over time.  However, much like just making your DVD available for sale through Amazon isn’t going to make you a millionaire overnight, the same thing holds in this space.  That said, there are some pretty good formulas to use to help you with the promotion side.  We’ve tried virtually everything and have a good feel for where you can get the most bang for your buck (or for your time, which is generally the case).  As far as ’selling’ it goes, there are three areas on which you should focus your efforts initially: 1. on the product itself (titles, descriptions, images, etc) 2. on your own site or blog (which you should be creating if you don’t have one… don’t worry - it’s easy and straightforward) and 3. via social media and online communities (twitter, facebook, forums, linkedin, groups, answer sites, etc)

I feel like I could ramble forever on the nuances of paid video content models that we’ve picked up on in the last few years, but instead I’ll try to zip it there.  Have questions?  Have your own insights or learnings or experiences to share?  Let me know in the comments below.

As always, if you’re interested in working with us or learning more about the MindBites platform and marketplace for selling access to streaming video on-demand and onlineContact us or sign up to get started!  We also have a special group dedicated to developing and deploying custom paid video solutions for enterprise customers, which you should also check out.


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