Shoestring Part 1: How we (almost) revolutionized the way independent films are distributed

Post by Jason Goldstein. Oct. 25 2009.

This is the first post in a series. Read the second post: What went wrong.

After we premiered American Gothic, all sorts of people wanted to know how they could get copies of the film. Some had missed the show, and some just wanted to own it themselves. Without even thinking about it, we started burning DVDs.

Let me express this as clearly as I possibly can: DVDs suck.

Why DVDs suck

When big distributors want to bring a film to to market, they create a platinum DVD master, send it to a factory, and have a million copies cranked out. They pack the discs in plastic boxes covered in quality artwork — or at least a big picture of the lead actor's face. They ship these things to retail stores and online sellers all around the country, sacrifice a small animal to the gods of cinema.

When a couple guys in St. Louis want to make DVDs, we have two choices.

1. We can use a service CreateSpace to have DVDs made for $4.95 each, pay high commissions, jack our price up to $20 per copy and still barely make any money.
2. Or we can call in our crew, line up our laptops, and start burning discs ourselves.

That's what we did for American Gothic. Each copy took 17 minutes to burn, and we had to spot check every disc. The resulting product looked cheap (this wasn't something we could ask people to pay for), and the cost of blank DVDs started to add up very quickly.

As we approached the completion of Salad Daze, we started asking ourselves if there was a better solution.

That digital thing

Everyone can read the writing on the wall: the future of all media is digital. This is scaring the living shit out of the powers that be, but if we've learned anything from the music industry, it's that digital media is great for independent artists.

As far as quality goes, I can't tell the difference between an MP3 produced by a major studio and one recorded by a local band in their friend's sound studio. They can be sold in the same online stores, and they're roughly the same price. And they can do this because there is no giant factory, retail stores, or other  giant operations that require a large investment.

We started looking for an outlet that could do the same thing for film, and we weren't impressed with what we found. We needed something cheap, that would let us sell our film at a reasonable price, maintain DVD quality video, and keep our digital rights.

Nothing of the sort existed.

So we decided to build one ourselves.

One small step for a production company

It's not every day that you sit down and decide to build a state-of-the-art distribution platform for digital cinema. I could barely tell anyone what I was up to with a straight face. It sounded ridiculous.

But in theory, our plan wasn't all that crazy. Lot's of people sell digital things on the Internet... it's just that most of them are dealing with things somewhat smaller than a feature film.

After a lengthy series of tests and many pots of coffee, one spring night I downloaded a full-quality copy of Salad Daze from the web. Project Shoestring was born.

You could say we had great timing. Shoestring took advantage of technologies that didn't even exist when the Shoe was founded. The H.264 video format, the same codec used on BluRay, gave us the ability to pack DVD quality video into a file one quarter the size. Amazon's cloud computing service provided us with servers fast enough to deliver a 2GB file... this didn't even exist a few years ago.

But the key to the program is its scalability. Instead of using a standard hosting plan, which bills a flat fee for the month, Amazon's server billed us bills us only for what we used. If all we did was leave a file sitting on the server, our bill for the month would be a couple dollars. Every time someone downloaded the film, our bill would go up. In a way it's almost like an electric bill: you pay based on how much 'service' you use.

That means as long as we sell the movie at a price that's higher than what we get billed for the download, we're guaranteed not to lose money. The only way our bill would ever reach $5000 for the month would be if we did over $30,000 in business.

The day that happens we're buying a bottle of campaign. Until then, our our bills will be small, our profits will be small, but the system will keep working.

Brave New World

Within a few days of the first demo, we realized that this could be a very powerful tool for other filmmakers. What if, we wondered, we could open a digital store full of independent films?

And so, as the first sales rolled in, we started reaching out to all the directors we knew, and began constructing the foundation of a new digital store.

We didn't know if we could pull it off. We didn't know if it would turn out to be a viable business or just a neat experiment. We just did it. 

And it almost worked.

To be continued...

This is the first post in a series. Read the second post: What went wrong.