Tuesday, November 10, 2009

"50 thousand fans in the world at the same time"


"50,000, keep your record deal CHUMP, 50,000 in the world at the same time."  - 50K - Bavu Blakes (ATX my dude.) 

Imagine being a filmmaker with 50,000 fans that always bought your film, tickets, dvd's, soundtrack vinyl, hosted your widget, etc.  It's all about the personal connection.  Malcolm Gladwell says it takes 10,000 hours to be good at what you do, Bavu Blakes asserts it takes 50,000 fans to be sustainable. The same concept can apply to independent filmmakers. How many people does your message need to reach so that you could potentially convert 50,000 of them to actual fans and buyers of your films? How many fans do you need for your film to make a profit?

Lets look at the mathematics...

So Selling to 50,000 Fans... Only a portion of people who see your message will investigate further, largely based on the effectiveness of your marketing promotions and the marketing channels, and only a portion of those people will actually buy your product. Lets use the 5% impressions conversion percentage, and a 5% sales conversion percentage (both very conservative percentages)In marketing lingo the total number of people who will see your message, your ‘Total Impressions,’ is the Total Addressable Market (TAM). 

Your impressions conversion is defined by the number of people who see your marketing message that choose to interact with it, ie. clicking your banner ad and going to your destination site, reading a print ad and visiting your site, receiving an RSS update about your film and reading the coverage, then going to your site. These impression conversions are your Sample Addressable Market (SAM), or potential direct customers. The sales conversion governs all those that did interact with your message who decide to purchase your product.

In layman's terms, for every 1000 people that see your ad, blog, tweet, or Wall posting about your new film, 50 people will go to your site under a 5% impressions conversion percentage.  Scrutinize that further, and project, of that 5% of those that hear your message and visit your point of sales vehicle, 5% of those people will pay for your product thus moving 2.5 product units.    

So under the 5% impression and sale conversion assumption, to build relationships with 50,000 fans that purchase your product every time its released, you need to reach 20,000,000 people (roughly 1/13 of the US population), your TAM , and 1,000,000 of those people need to visit your point of sale ie destination site, amazon link, Itunes store, etc., your SAM.

Obviously the quality of your creative content, the authenticity of message to the target audience, and the understanding of the product's target audience influences both of those conversion percentages dramatically.  So as a marketing producer your goal is to nail the conversion of people reached to people converted.  

So lets look at the revenues now.  You built your list to 50,000 with your first film. Now your film is available in the theater, on DVD, and direct download via Itunes through an aggregator, or a ‘broker’ that gets your product up on iTunes, who both take 30%, (ie, of the 14.99 Itunes is charging, they take a 30% cut and your aggregator will take an approximate 30% cut of the remaining balance...ie you are seeing $7.34), and 5% of your audience will purchase your product.  Itunes streams your film for between 2.99 and 3.99, and sells the download for 14.99.  They are going to get their cut of 30% regardless, so hopefully your aggregator's terms are favorable.    

Assume those 50K buy the digital download version of the film, you are looking at approximately $367,000 in revenue at per unit return of $7.34.  I hope your film costs less than $367,000 to make and market, and if you can do it for that, then I am all about 50,000 fans in the world at the same time.  

Shout out to Marcy Garriott for turning me on to this song, and to all you producers and directors with 50,000 fans, hopefully you are providing enough value to them that your conversion percentage is better than 5%. 

Respect your peeps, respect your fans.  They make or break you.  

One Love.