(Note to reader: The downside of running two companies during a recession is that you get twice as many fires to put-out. That has been the modus operandi for us since last fall. There hasn’t been any extra time to contribute to this blog, and things were getting stale. Two months ago, I asked our people to posts articles from the January newsletter to this blog. It was a lesson in “beware what you ask for”. There were several posts, mostly for the benefits of our clients, and probably made not much sense to the general public. Those have since been removed, and we’ll do our best to blog open topics–recession or not.)
How has the recession affected DIY? The most obvious change is decreased sales. While the official government marker placed the recession start date began in December 2007, Neoflix clients in general did not see any adverse effect to sales during 2008. In fact, the whole year, including the fourth quarter, was very strong despite the slate of poor news coming from Wall Street and the financial sector. Then came January and February 2009; sales fell off a cliff. The sales numbers per client, as well as the aggregate, were dismal. There were some speculation that home video purchases may increase as people shifted discretionary spending from watching movies at the theater to watching movies at home. Actually, movie rentals went way up (see Netflix’s FY results) and the numbers for ticket sales at the movie box office remained surprisingly strong (at least the blockbusters). From our sales data, a discretionary shift–if there was any–did not benefit our indie films whether they were docs or not. In March the numbers began to improve, but are still lower than what we projected at the end of 2008. My guess is that we will see it bounce back after summer. There are still some clients doing well, but those are the ones actively doing outreach.
Over the next a couple months, we’ll be able to track if the consumer sentiment improves as Magic Rock is launching a direct-to-consumer website at www.indierush.com (note: the website is still work in process as of today 10apr09). We’re doing a test with an affiliate marketing company; the goal is to see 20 indie films + 300,000 hits = how many sales. I’ll blog the results in a couple months…stay tuned.
