An Affiliate Distribution System for Films or Other High-Cost Video Productions

I will readily concede that nonfunctional goods are superiorly distributed through anarchistic means. I also concede that even where financial recompense is sought for the work, either through a fixed cost or donation system, an anarchistic distribution will show a better return for the artists in most cases (through the minimization of overhead). Yet in class Eben admitted that this system would likely work better for singer-songwriters than for full orchestras. The more times you have to “slice the pie,” the more important it is to reduce the number of freeriders in the system, at least until all parties have received the minimum amount of restitution for their work. I define this minimum quite simply: at what price would an individual working on the good have agreed to participate, were they to bargain in advance? After this point any additional money collected is pure benefit, and arguments against freeriding lose much of their strength. Yet even full orchestral performances involve the participation of far fewer parties than feature films, and the numbers involved in modern films is increasing. The cast and crew list for Citizen Kane includes 386 entries (some duplicated due to individuals wearing more than one hat). That for Lord of the Rings: The Return of the King runs closer to 1000. These lists do not include a full count of the number of people involved secondarily (music used in the film whose rights need to be cleared, etc.). Suffice it to say, there are a number of people to pay. So how best to do it?

Let me state a few assumptions I am making. First, while by our definition of aesthetic goods we state that these are goods for which we can have no qualitative value analysis, I assume we can all agree that there are tiers of quality. In other words, I imagine we can agree that the best independently produced clips on YouTube? do not rise to the quality level of Citizen Kane, <i style='mso-bidi-font-style: normal'>Auntie Mame, <i style='mso-bidi-font-style: normal'>The Godfather, etc. I state this because it is important to note that given the quality that full-feature films can reach there will be (and should be) a market for such even in the digital age. Our goal should be to ensure that such a market can exist outside of the studio system, to put a stop to rent-seekers driving down supply (and often quality) in order to drive up profits. Secondly, I assume that my system will be put to use in a world after the current financial crisis, when hopefully there will exist creditors willing and able to supply the budgets for such films outside the studio system (recall that this is the reason the system came to power in the first place). Lastly, while there will still be a place for box-office returns to pay for films, I assume that the reliance on such will decline as time passes (though evidence shows that this assumption may not be valid).

I should also note that mine is only a possible solution. The benefit of breaking from the studio mold would be to allow for a diversity of options for filmmakers to choose in order to recoup the costs of their art, mine is only a sample of the options available.

An Affiliate System Will Provide a Maximal Return While Still Allowing for the Benefits of Anarchistic Distribution

My idea is quite simple, and indeed is not all that novel. The adult industry and others have been using something similar for years. I propose that filmmakers adopt a copyleft licensing system in which the streaming of their films is allowed at not-for-profit websites. At the same time, they encourage the distribution of their films in downloadable or streaming form at for-profit pages by giving these sites a small piece of any funds received from their inclusion of the film. Filmmakers could set up a web site for their films, including prepackaged embeddable code that affiliates can use on their sites. They could even watermark the films based on this code, to help track improper distribution outside the copyleft scheme. The code could included a donation system or require a fixed fee – which would work better would depend on the expected viewership, number of expected affiliates, and the film’s budget and recompense needed to those involved. The links would include a tag which defined the affiliate page from whence the user accessed the film, and affiliates would receive a small fee for each such user access/download. Whether that fee would be percentage based or fixed would again be decidable on a case-by-case basis.

The strength of this system is simple. By allowing those who would never pay to see the film in the first place to view it, you can garner word-of-mouth advertising for the film at no real cost. Additionally, those most likely to freeride on your product by distributing it gratis in order to increase viewership of their own pages have a financial incentive to instead encourage individuals to pay for your film. The filmmaker would still retain the ability to take legal action against those who used the film for financial gain without payment, and avoid the overhead of systems like iTunes or Amazon Unboxed. The affiliate system can even be used to allow for grassroots DVD/Blu-Ray distribution, minimizing the filmmaker’s overhead further.

While filmmakers should accept the growing importance of anarchistic distribution methods, I believe that affiliate systems with fixed fee access will be a good way for them to get their ‘feet wet’ in the system. While smaller budget films will likely be willing and able to adopt a pay-what-you-will system sooner (just as singer-songwriters can), this sort of system garners those producing higher budget films a way to avoid high-cost rentseeking distribution systems, maximize the number of nodes from which interested parties can gain access to their films.