After reading that Warner Bros was streaming The Dark Knight and soon thereafter the Harry Potter films though Facebook, I immediately thought it was a genius move. More information is shared on Facebook, and this would be a great way to close the window between discovery and consumption. In addition, on Facebook distributors and filmmakers are provided very meaningful analytics — and then, of course, there’s the monetization aspect.

In Part One of this two-part email interview I talk to David Raycroft, co-founder and Vice-President of Product and Operations of Milyoni, the company that made this all happen. He talks about one of their solutions, iFanStore, which allows the easy set up of a storefront on Facebook that integrates with your Fan page. Tomorrow in Part Two he talks about the company’s Video on Demand (streaming solution).

Selling on Facebook

Filmmaker: From what I can see you have two offerings: the iFanStore and Video on Demand. Let’s start with the iFanStore. How is one created through Milyoni?

Raycroft: There is a requirements gathering process. It is important to understand the number of products that will be carried, where they will be fulfilled from, and specific business objectives. This helps define the project scope and helps determine pricing and the time [needed] to implement. Depending on the results of the requirements gathering process it can take anywhere between seven days to seven weeks to implement a storefront. The biggest factors are existing systems and fulfillment operations. The more complex the existing environment the longer an implementation will take.

Filmmaker: Is there a minimum number of Facebook fans/products a person should have before considering an iFanStore? For instance, if a filmmaker has just one DVD to offer, does it make sense?

Raycroft: We have customers who range in size from a few thousand fans to tens of millions of fans. It is really more about the community that has been built and how engaged they are. A great example of a filmmaker who has created a strong community and uses our solution to promote his film is Matt Farnsworth and his horror film The Orphan Killer. When we started working with him, he had less than 50,000 likes and now he has over 80,000. He sells DVDs, Blu-Rays and a couple of Tee Shirts. You can check out his store at http://apps.facebook.com/orphankiller/ That being said, we do recommend that you have well north of 10,000 fans to create the kind of community that can drive transactional revenue.

Filmmaker: Once the iFanStore is up is there anything a proprietor can do to encourage people to make purchases?

Raycroft: Putting up a store in Facebook is just the first step. To really be successful it is important to engage with the community and connect your content to a commerce opportunity. We have a set of Social Merchandising Tools that create a seamless link between your fans and your store. We also provide a set of “merchandising manners” that are the best practices we have found to increase fan interaction and drive impulse purchases. The most important thing is to interact with the community and create a passionate response; our tools simply create a frictionless way to turn that engagement into sales.

Filmmaker: What is the iFanStore business model? (i.e., Is there a flat fee? Does Milyoni take a percentage of purchases?)

Raycroft: We are a Software as a Service solution. Our business model includes a monthly service charge with a per-transaction fee.

Filmmaker: How much does it cost to set up an iFanStore?

Raycroft: The cost of an iFanStore depends on a number of variables. The final price is based on the complexity of the fulfillment integration and the features you want to enable. We need to understand the business and technical environment to provide accurate pricing.

Filmmaker: Do iFanStores work on mobile devices?

Raycroft: Our stores are compatible on all mobile browsers. We will be optimizing for smaller screens by mid-2011.

Filmmaker: Finally, what do you provide in terms of analytics to Milyoni customers?

Raycroft: We provide a unique mix of visitor, viewer and consumer data. We have robust reporting on demographic and transactional activity and a wide range of graphical views. We are the only solution that combines profile data, ecommerce data and social engagement data.

Read Part Two of this interview here.

Malaika likes watching films as soon as she hears about them. To get filmmakers to feed her insatiable appetite, she blogs about online film distribution at Beyond the Box Office. She’s currently working on a book on the same topic, that will cover how to distribute films by streaming to PCs, mobile devices and set-top boxes. Follow Malaika on Twitter.