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I understand how some don't like the philosophy behind selling so cheap, but I'll add my opinion here.
For content brokers who operate on a revshare basis, you have little chance of doing these $5, $3, $1 per scene deals because the provider will never ok such a deal.
For 2 years now we have been buying out studio libraries, therefore no revshare and no need to get approval from a studio on pricing. The risk of recouping our investment falls solely on us.
We walk into 2 studios in Chatsworth and pick up 2500 scenes (500 DVD's) and pay them a one time lump sum payment of $50,000. Honestly there are studios lining up to do these bulk one time payment deals. We get masters, high res art work and matching photosets. In essence we pay $20 a scene and we now have resale rights (Internet, Mobile, Tube, iPTV, Broadcast, VOD).
Now understand, we can't expect to walk into a studio like Vivid, or Evil Angel and ever get a deal like this or any resale deal at all. Some premium lines we pay a lot more for, and you will be unlikely to see that content included in a $1 deal.
We contact our major customers by phone and email and offer them deals on DVD's or scenes, and even photosets. Many customers are on automatic and simply take anything new that they dont currently have. After that we put the content on our site in DVD and scene format and sell at full price and sometimes offer a 50% off once a week deal. Even at 50% off a $65 HD scene, we are still making a profit per scene and the customer get a great deal.
Once we have doubled our money on our investment we then have the leeway on that content to make bulk deals at low prices such as $1 scenes. In other words there comes a point when we stop looking at the per scene cost, and instead focus only on the size of the sale ($100, $1,000, $10,000). We routinely do deals for 5000 SD scenes, up to 15,000 SD scenes.
The customer is happy for getting good quality content at cheap prices, the studios are happy because they are getting lump sum payments since DVD sales are dead and 90% of the studios don't do in-house licensing. We simply keep reinvesting our profits into buying more studios. And ever since we have resolved our website/server issues and all content is now 100% downloadable, the experience for all has been smooth. Our past problems are well documented, but like any growing company our launch had problems all around, we have come full circle 4 years later and think we now provide a great experience for all.
To vendors like Lykos, Duck and MaDalton, those are 3 of the best guys in the business and I admire them for what they have done over the years. They have top reputations and continue to supply good content. In effect they are part of the reason we came up with this strategy. They do a lot revshare with their content partners, so this was a way we thought we could separate ourselves from our competition.
Our philosophy is simply to be profitable. We pay for our content, we resell it to make a profit, programs and webmasters buy the content and in turn make money. Everyone wins.
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