The Impressive Economics of MOD
How You Can Finally Take Advantage of the Long-Tail!
Manufacturing on-demand changes the economics of long tail content which we define for our purposes as titles that sell less than 250 units per year. Consider the following comparison:
In the diagram below we outline the initial cost of bringing a single title into production. The metrics include replication cost, loading costs, MOD cost, and fulfillment costs.
For purposes of “apples to apples” I’ve set any integration or web development fees at zero for the moment.
| Library Data Below | On-Demand Information Below | Conventional Fulfillment Information Below | ||||
| Library information | ||||||
| Enter number of titles in the collection | 1 | |||||
| Enter average annual volume of DVD units per title | 200 | |||||
| Enter the average selling price of the titles | 22.95 | |||||
| Manufacturing and fulfillment information | ||||||
| Enter cost of disc manufacturing | $4.00 | $1.20 | ||||
| Enter cost of fulfillment | $2.00 | $2.00 | ||||
| Enter monthly storage/management/carry costs | $2 | $14.50 | ||||
| Enter cost of capital/opportunity | 0.70% | |||||
| Program startup information | ||||||
| Initial Integration including web development | $ - | $ - | ||||
| Title loading | $15.00 | $15.00 | ||||
| Other start up costs | ||||||
| Initial inventory of replicated discs | $1,200.00 | |||||
| Total start up costs | $15.00 | $1,215.00 | ||||
MOD Economics Continued:
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