Setting the Table to Get a Piece of the Pie
April 1st, 2008
There’s an interesting debate going on in the comments at NewTeeVee regarding a recent post where Yuri Baranovsky, creator of the web series Break a Leg, opens the books on the revenue, or lack thereof, his show has generated on a variety of partner sites including Youtube, Blip.tv and MetaCafe. As he says:
with over 2 million views on YouTube, we’ve received roughly $1,600 from their Partner Program.
Ouch.
The full interview with Yuri is worth a read, but the conversation in the comments is the best part.
What you have is a debate as to why there hasn’t been a financial breakout in the web show category. In fact, the bigger question is: why is so hard right now for content creators to make any significant cash through online video?
For the sake of this post I’m talking about serialized, narrative video. Not daily wrap-ups, news shows, one-off events or how-to videos. These are of a different content set, wrapped with unique revenue models that we can talk about later. Also, I’m focusing on the ubiquitous ad supported model, not sell through or subscription.
Defining financial breakout isn’t easy, but I think we can agree that 2 million views should be worth more than $1600. That turns out to an effective CPM of $0.80. In other words, for every 1000 views, the creator gets 80 cents. If we take the most viewed Youtube video of all-time (as of today), The Evolution of Dance, with its 80+ million views, at a$0.80 CPM that nets out to about $64K. That’s for the top video of all time. Not pocket change, but that’s not a financial breakout by any stretch of the imagination. Now consider that there’s not a single ad unit on that page. So the guy who created the video, Jud Laipply, received no money from Youtube. The artist gets no money but the site gets to build its brand immeasurably. I would assume that this exposure on Youtube has led to an increase in his personal appearance business, but…I’ll let you judge for yourself.
Even if we take what many consider to be the biggest web narrative hit, Lonely Girl 15, and project the 282 videos currently on its Youtube channel out to an optimistic 200 million total views, at a $0.80 CPM you’re looking at $160,000 gross. Again, nothing to spit at, but that’s not good enough to incent ongoing creative energy to pour their souls into digital programming. In fact it’s downright abysmal.
Another qualification: I want to carve out a separate discussion of ancillary revenue like licensing and merchandising, upstreaming your show to a network or studio, dvd sales, etc. There’s a whole host of problems associated with those options that comes down to rights management and the growing challenges that we’ll be presented with growing forward.
So what needs to happen to make web video a viable path to wealth creation for the artists? Is Web video a solution to a non-existent problem? Doesn’t HDTV have an insurmountable head start?
I’ll set the table with this broad list and plan to address each category in an upcoming series of posts.
- Video ad unit standardization
- Technology roadblocks
- Legislative issues
- Performance metrics that make sense
- Regulatory concerns
- Rights management
- Deal precedents
- Pricing and The Culture of Free
- Spectrum
The bottom line is that an efficient pipeline needs to be built to allow for the spigot of the advertiser’s dollars to pour from their marketing budgets through the filter of the agencies onto the publisher sites and finally into the pockets of the content creators. The loop needs to be closed back by allowing the advertisers access to metrics that show them that they’re spending their capital effectively and thus perpetuating the cycle
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
April 5th, 2008 at 7:02 am
Looks like you need to get yourself to Ad-Tech SF where your broad list will start to be narrowed down by topics that the Association of Downloadable Media will be addressing.
Anyone can email me if they would like a DEEP (50%) DISCOUNT and I can hook you up.
Also, if these topics interest you and you would like to be part of an organization working to build the marketplace for online video and audio content visit:
http://www.downloadablemedia.org/
Jake, You should run for President of the ADM next year.
April 8th, 2008 at 7:27 pm
[...] they were big, because Wall Street needed to hear that they were big. I also knew that there were big challenges in the way of those numbers being big and that very few people, including the big executives, knew [...]
June 5th, 2011 at 5:09 am
Good web site! I truly love how it is easy on my eyes and the data are well written. I am wondering how I might be notified whenever a new post has been made. I have subscribed to your feed which must do the trick! Have a great day!