What The Movie Business Can Teach You About Increasing Revenues From Each Product You Develop
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Here’s how to apply the same £Million Pound+ revenue business model that Hollywood Movie Studios use to turn loss making productions into £Million pound success stories and how you can quickly and easily copy this idea for your own products and serivces. In fact this strategy is so powerful it could be the difference between making £2,000 form a project or £200,000
Here’s how
Most people think making a movie in Hollywood is a sure fire way to get rich.
When in reality the opposite is true.
According to Malcolm Ritchie Co-Managing Director, Qwerty Films, almost all Hollwood productions start out £50 million dollars in the red
Then you add £30 million in marketing costs.
And with cinemas getting 50% of revenue from each showing, box office ticket sales will only rarely cover the £80 million combined production and marketing cost of most movies.
So why aren’t Hollywood movie studios going out of business?
Because they use a proven ‘timed revenue flow business model’ that in most cases turn their £80 million+ losses, back into millions of pounds worth of profits. 🙂
Here’s how they do it (and why you’ll want to considering using a similar strategy).
The Hollywood Timed Revenue Flow Model Explained:
By following a strategy of timed released of specific rights to a production, the producer can usually recoup his production and marketing costs.
The strategy flows like this:
* Cinema Screening – 0 to 6 Months in movie houses, representing income from ticket sales
* Product Licensing – toys, games, apparel, etc
* Video/DVD sales – 6 to 15 Months, sales and rental of DVDs
* Licensing Pay per View Television rights – 15 to 18 months, ticket sales via Pay Per View TV networks (Sky Box Office)
* Licensing to Subscription or Pay Television – ie (Sky Movie Channel)
* Licensing to Free Television – major networks, BBC, ITV, Channel 4, Channel 5 Sky1 etc.
Each step in the product lifespan shown above, generates significant revenue.
And often, the steps beyond the original cinema screening to generate much more revenue than just box office sales.
In fact, some movies skip the first step (the cinema screening) altogether, and go direct to product licensing and DVD rental – as in doing this they can generate significant income WITHOUT the expense of cinema distribution.
How you can apply this to your information publishing business
In many cases, you can apply a similar ‘Timed Revenue Flow’ to your own products.
For example, instead of just relying on retail product sales, you could follow a strategy like:
* Retail product sales – 0 to 6 months
* Affiliate Sales – 0 to 6 months
* Offering rights to sell on Amazon – 6 months, one licensee
* Offering rights to resell licenses with Amazon Exclusion – 12 months and beyond, multiple licensees
* Offering master rights to resell resell licenses to others – 12 months and beyond, one licensee
* Offering rights to include parts of your product into other products – 12 months and beyond
* Offering private label renaming rights to your product – 12 months and beyond
* Bundling with other products to build new package – 18 months and beyond, multiple licensee
* Offering rights to offer product as incentives – 24 months and beyond, multiple licensee
This kind of strategy creates a number of potential income streams for your products, with some having much greater income potential than just selling retail copies of your product.
While you probably wouldn’t do ALL the above suggestions (depending on what kind of restrictions you place on resell rights), the ones that you did do can significantly increase the long term income stream from your products.
