03/18/2015 05:31 pm ET Updated May 18, 2015

Gumroad Turns Social Media Into The New Video Shop

By Noah J. Nelson (@noahjnelson)

The people who brought the "Buy Now" button to Twitter are going all-in on film distribution.

Once upon a time film distribution seemed to be the most staid and stable of things: there were the studios, there were the exhibitors, and there was home video. If you wanted to get a film made and out into the world, you either had to know someone or take your chances in the volatile film markets.

Everybody--and I think at this point that its safe to say "everybody" without it being hyperbole--knows that the Internet has changed the way that people consume film. This is an ongoing process, with a seemingly endless number of new paths being cut into the dark forrest that is Hollywood.

This week another path opened up, this time from the social media commerce company Gumroad: video rentals.

Here's Gumroad in a nutshell, for those of you who don't know: the company was founded by Sahil Lavingia, one of the first designers at Pinterest, who wanted an easier way of selling digital assets other than setting up an eBay or an Etsy account. Lavingia designed Gumroad so that instead of driving a creative's customers to a marketplace website, they could start the transaction right in social media.

The creator doesn't hand off the relationship with their patron to Gumroad, but the site takes care of fulfillment. Even hosting video files for digital distribution. All for just 5 percent plus 25 cents per transaction.

"Which I know sounds crazy now," said K. Tighe of Gumroad's communication team when I met with her last week in LA. "We're a start-up, we have room to come up with what we think is the perfect product, so we have a little bit of time to grow."

That "perfect product" got a little more perfect this week with the Rentals feature. Filmmakers have already had the option of selling film and video content on Gumroad, but at launch the site says that nearly 28,000 products "will be rentals-capable." Over 2,000 of that stock are feature-length films.

Let's cut to Gumroad's own fact sheet on the features.

Any creator selling a film or video product (from feature length films to web series, instructional videos to comedy shorts) will now have the option to make the product available for rent as well as sale - at a price of their choosing.

Consumers will now have the option to rent instead of buy. They'll have 30 days from the time of renting to begin viewing, and 72 hours of all-you-can watch after the first view.

Consumers can stream rented videos online or on a mobile device via their Gumroad app (available on iOS and Android).

In other words: makers can set up rentals that look like the kinds of rentals that consumers expect to find out in the rest of the world. No weird hybrids. Delivering a rentals option puts Gumroad into an ever more crowded online video space, but low fees and a lack of exclusivity requirements are powerful tools to wield in the marketplace.

Marketplace is the tricky word here, however. Most of the players in the online video space--be it Apple, Amazon, or Vimeo--are built around the idea of building a marketplace where consumers come to discover what's available. It's a replication of the multiplex experience. Gumroad's tack bets on the idea that the network will replace the marketplace--and idea championed by economist and social theorist Jeremy Rifkin--that the relationship between artist and patron will be more powerful in the long run than that between consumer and market brand.

Given the experiences of the music industry in the past two decades, Gumroad isn't betting blind.

For her part, Tighe came to the company with a background in the music press, and music has been a big part of the company's business so far. They've attracted acts like Girl Talk, Amanda Palmer and Eminem to the service--which aims to be as transparent as you can be.

For artists with a large following the Gumroad experience is kind of a no-brainer: it's a direct-to-fan tool that exists in the spaces like where the fan/artist relationship already takes place: like Twitter or an artist's own website. There's not much value in having middlemen take 30 percent on each sale when the network is already in place, waiting for you to drop your next piece of work.

"What's exciting to me is that the independent guys are using Gumroad as well and they get the same experience," said Tighe. "Eminem isn't getting a deal, they pay the same amount."

Conventional wisdom says that there's still a place for markets to play a role in artist discovery and artist development. Yet we know from how connected we all are to social media that the networks do a fair amount of that heavy lifting these days. Not that every filmmaker is--or wants to be--marketing savvy. Towards that end Gumroad has been developing educational material that helps creatives understand just what to do with things like e-mail lists, explaining why they are so valuable.

There's a few other features to the way that Gumroad does business that will be of interest for filmmakers.

1) Pre-orders. Gumroad has them. So if you want to get your opening day--especially a day and date theatrical/VOD opening day--numbers looking good you can stack the deck ahead of time.

2) Bundles. Feel like putting a bunch of work together, or offering discount codes? Done.

3) Plus-pricing. Creators can set "$5 plus" style prices, letting their patrons leave a little extra if they're feeling generous. (This actually works, which seems crazy if you're as cheap as I can be.)

Maybe the most compelling feature of Gumroad is the scrappy "change the world" vibe that comes from the people and the product. The service occupies a place on the landscape that might be distinct from crowdfunding sites like Kickstarter and Patreon, but the emphasis on the direct relationship of fans to creators is part of the same movement those companies are the vanguard of.

In my lengthy conversation with Tighe, I got the sense that what was powering Gumroad is an ideology that these tools enable.

"What I think the future looks like if Gumroad succeeds and companies like Patreon succeed along with us." said Tighe, "[Is that] it will be a viable thing to become a filmmaker or a musician or an author. It won't be a thing that horrifies your parents. It won't be a thing that requires you working as a barista during the day or having a terrible nine to five that you hate. You're actually going to be able to make a living at it."

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