Business Model for Making and Selling Instructional DVDs

Hello All,

I am interested in obtaining some feedback from other professionals about what works and what doesn't work in terms of ownership, royalties, etc when it comes to instructional DVDs. I have already produced several successful instructional DVDs based on the following business model and want to see if there is room for improvement on future projects.

Right now, when I make an instructional DVD I collaborate with the subject matter expert who is a recognized authority on the subject. I do all of the production work - filming, editing, etc. I do not get paid for any of this. We share the costs of music rights, professional voice overs and replication when we create the physical product. We distribute through a distributor who takes 40% of the retail costs. My partner and I then split the remaining 60% 50-50. In other words, he is the expert and I am the production company. Recently we acquired another person who does the marketing of our DVDs so we included him into the equation with an equal share so we each get 20% of the royalties after the distributor takes their 40%. This seems to work okay but I have other opportunities to create more DVDs with other "experts" and wonder about the validity of the following model:

I tell the new expert that I will produce his entire DVD free of charge, explaining to him all of the costs and work that go into production, etc. I will retain all rights to the material and keep all money made from the sale of the DVD. He can purchase as many of them as he wants at a 40% discount to sell on his own. What he gets from all of this will be the exposure that the DVDs generate for his business and 40% of whatever DVDs that he sells. Is this too much to ask for or does it simply boil down to how powerful a negotiator I am?

Obviously the second approach is much better for me financially in the long term. I would be getting 60% of all DVD sales instead of 20%. What formulas do you know of or use when it comes to producing and selling niche type instructional DVDs?

Thanks for any advice,


Sterling Noren




Sterling Noren
Owner/Writer/Producer/Editor
WideWorld HD Productions
Seattle, WA