John August is an American screenwriter whose blog contains great info about the screenwriting craft and business. August’s latest movie, Big Fish, is now out on DVD and on his blog this week, the screenwriter revealed that he makes just under $0.05 per DVD sold. Let me do the math for you: It means that if Big Fish sells 1,000 copies, the screenwriter gets 50$.
Doesn’t seem like much, considering the fact that the screenwriter is one of the main « creative » associated with a movie. On the other hand, if you think about how much a hollywood script can sell for, this DVD business can become a nice sideline… To evaluate this fairly, we would need to know what the distributor, the producer and the director’s cuts are. According to the Writers Guild of America, « under the existing formula, the studios keep 80% of DVD revenue and put 20% on the table. Writers get less than 2% of the available 20%. »
So, how much can this screenwriter expect to make out of the total sales of Big Fish? Hard to tell. According to Video Business Online, « revenue from the purchase and rental of DVDs increased more than 40% to $16.3 billion, with the average DVD player household buying 16.5 DVDs in 2003. » (U.S. market.) That seems like a lot of DVDs to me, but then again I don’t have kids and the top sellers tend to be family oriented titles.
The two top sellers in DVD last year were Finding Nemo with 18.5 million copies sold, and Lord of the Rings: The Two Towers with 14.75 million sales. If we estimate that the screenwriters had the same deal as John August (0.05$ per DVD), it means that the author(s) of Finding Nemo got a nice 925,000$ just for the sale of the DVD. Not bad at all.
According to Video Business Online, Universal’s Seabiscuit sold more than 7 million copies, a number usually only achieved by movies skewed to young male audiences and kids. My Big Fat Greek Wedding sold 7.18 million DVDs. If Big Fish sells 3 million copies, like Catch Me If You Can did, the screenwriter will get 150,000$. Seems like the number of DVD sales does not always correspond to the number of movie tickets sold, which makes it even harder to predict.
The Writers Guild of America is currently negotiating with the studios over DVD residuals: « The studios aren’t giving in without a fight », writes Merissa Marr in The Wall Street Journal. « They (the studios) say DVD revenue keeps the cogs oiled in a profoundly erratic business model. With costs of making and marketing films soaring, many movies no longer cover their costs at the box office as they once did, and the studios say they need DVDs to turn a profit. According to the Motion Picture Association of America, only six in every 10 films actually make money, and DVD sales go a long way to financing the other four.
But while the studios plead poverty, DVDs have been showering them with cash since the late 1990s. These days, studios often make more from DVDs than from U.S. ticket sales. (…) The residuals formula dates back to the early 1980s, when the videocassette business was just taking off. At the time, the studios argued that the industry needed to rally behind the new format and convinced the talent to take only a small share in residuals. But now DVDs are a much bigger business and the studios are earning bigger margins on each disc. »
I think I’ll keep an eye on that issue for a while. Who knows…