As Featured in Digital Content Producer
October, 2008
At media and entertainment businesses, I often find myself walking through hallways and squeezing past boxes of blank video tapes. And when I do this, I usually ask some innocent questions, which beget some startling answers. I may say, "Wow! How many tapes do you use per month?" The answer is typically a much larger number than I imagined, answered with a chest-puff of pride, ranging from 10,000 tapes per month to 20 tapes per day to 130,000 tapes per year.
Naturally, my next question is, "What's the cost to distribute your content on tape?" This question is usually taken literally and even looks past the actual cost of the tape. They'll say, "Fifteen or 20 bucks, whatever the FedEx overnight rate is these days."
That price may not sound bad, and it wouldn't be if it were true. The real cost to produce, deliver, ingest, and track a single videotape is in the $100-to-$500 range - and don't forget to multiply that by your 10,000 tapes per month.
Here are some of the costs that are frequently left out of the equation.
Duplication. The marginal cost to replicate a 30-minute DVCPRO (or similar Beta SP, DVCAM) tape, including the labor, stock, and labeling, is about $75. If it is longer or HD, the cost will easily approach $200 for each tape. In most cases, this is seen as the cost of doing business and is either fundamental to producing your product or is absorbed by someone else and is just an accepted practice.
Shipping. I guess the people that quote me $15 or $20 for overnight delivery haven't looked at the price in a while. A quick visit to the FedEx website will show that the cost to ship a 2lb. package overnight from New York to Los Angeles starts at around $55 and goes up to $100.
Ingest cost. Tape has become more of a transport and storage medium versus something that people actually work in. As a result, once it's received, content needs to be ingested into a file-based system for editing, playout, or some other task. And don't forget that this is a manual, realtime process; a 30-minute tape will take 30 minutes to ingest. The entire process and the associated quality control measures is estimated to cost around $50 for each tape, after accounting for labor, equipment, and equipment maintenance.
Tracking cost. Data wranglers are on staff to ensure that the hand-off of these tapes goes smoothly and that all things are at the right place at the right time - a daunting challenge that often involves a handshake with someone on the other end that has the same job. It's a very detailed and labor-intensive job to ensure that everything is accounted for and moves as it should. It is estimated that for each tape that is shipped, there is $25 of overhead in people and systems to ensure that tapes are at the right place at the right time and that nothing slips through the cracks.
Remember, these are very conservative estimates that don't even address issues such as international shipping, courier costs for same-day or cross-town delivery, or security for valuable content that needs to be hand-delivered. And don't forget about the cost of lost opportunities when content isn't at the right place at the right time, or is sitting on a shelf with stored value because you haven't had time to distribute it yet.
After taking all of this into consideration, a digital media-distribution solution that can automate, accelerate, manage, and secure your content probably looks pretty attractive.
The real cost to distribute a single tape? Let's recap.
Digital media distribution? A one-time investment with priceless, intangible benefits.