Hannover House Inc (HHSE)

[mdimport]

There are really only three revenue generating models:
1. Periodic subscription (Netflix)
2. Pay per view (RedBox)
3. Free with advertising (YouTube)

A possible fourth model might be donation: free viewership and the viewer makes a donation based on what they think the movie is worth. That's been done by a few music groups and authors, but would be revolutionary in the movie sector. Would also be revolutionary since it'd be the first mass market + mass product donation service for online on-demand movies.

To compete with Netflix or RedBox head-to-head, VODWiz would need to offer a lower price point to entice viewers to its new service, otherwise the only USP is independent movies on-demand.

If the price points are higher than established competitors, VODWiz viewership should be lower as cost prices consumers out of the market. Bear in mind that at some level movies are a commodity and charging higher prices simply stops people paying (witness the decline in moviegoers).

It's also going to be harder for VODWiz to justify higher price points with movies with largely unknown actors and that they're independent.

Where VODWiz can cut costs is through lowering its per movie costs as it signs partners. Remember that these studios don't have a ready market for their product -- something VODWiz offers going forward.

Annual income doesn't mean anything if it costs much more than that to operate the service.