Is there any money in web video?  That question has been forefront on my mind of late.  I think the short answer is: some people are.  We’ve all heard the stories of people like Michael Buckley making a living from YouTube.  But let’s face it, Mr. Buckley’s YouTube success story is the exception, not the rule. Plus he’s an acquired taste.  As I played the video while writing this, my wife said: “make it stop or I’m going to come over there and smash your computer.”

Frankly, I’m more interested in people and companies who have created sustainable business models in this ecosystem – networks with a portfolio of successful web shows.  As two leaders in the world of web video startups celebrate notable milestones – Next New Networks, its one billionth video view and Revision3, its 5 year anniversary – the economic infrastructure of web TV seems to be maturing.

Can I Really Make Money Doing This?

In terms of how one makes money from web TV, the simplest answer is advertising/sponsorship. Regardless of what people say about “dialogue with community”, “marketing is a conversation”, “unmarketing” and other web 2.0 platitudes – the money transaction in video is audience for dollars. Trouble is, on the web, those dollars just aren’t adding up.  In this interview with Paid Content’s David Kaplan, Next New Networks CEO Lance Podell bemoans the disparate valuation of web vs. TV video viewing audiences.

We’re constantly being asked to educate and consult advertisers. And we’re more than happy to do it. Ultimately, advertisers have to put their money where their mouth is. The only way they’re going to find out what really works is to start trying new things. While we have brave advertisers, who have come back time and again—Warner Bros., Samsung, Frito Lay, Unilever—but we haven’t seen the number of advertisers that is commensurate with the pace of the viewers we are attracting.

- Lance Podell, CEO Next New Networks via PaidContent

That said, I think the key is to balance targeted, niche content (you’re not going to win on the commodities of generalized content) with a desirable level scale, demonstrating those key elements to potential customers (advertisers), and creating a price point that sustains your efforts and satisfies your customers.

In my mind, you need to create a sustainable competitive advantage in order to be successful.  TV is tricky in that regard.  There are always new shows nipping at your heels and audience taste is mercurial.  But part of being competitive in media is anticipating those challenges and creating new offerings.  While big media relies on celebrity, the web often derives value from social currency or trust.  Many successful web shows are hosted by trusted sources in their topic or niche.  A few years ago it would’ve been simple enough to just start creating video awesomeness and aggregate a sustainable audience.  Now there are just too many players.  So, if you’re thinking of creating web video for profit,  I would say to you:

• refine, with laser focus, what your show would be and who you would want to reach
• define how it is differentiated from competitors
• look where advertisers are spending now and create an offering that appeals to them (baby boomers?)
• do market research
• create a concept statement about your show and shop it around to potential customers
• from positive feedback, I’d write a business plan and take a hard look at costs/revenue projections

Thinking it Through

It is a complex ecosystem with a lot of moving parts – giving the prospective media entrepreneur a lot to think about.  But such is the life of a micro-media-mogul.  As you think about your show idea,  you’ll need to really define why people need to watch your show.  You’ll also need to consider the expectation for higher production value in web TV.  Many people are watching video “over the top”,  via devices connected to big screen TV’s.  It takes a few more steps to “tune in” to a web video show.  How are you making it worth the extra effort?  Why do people need to come back to your show?

These are just some thoughts that I’ve been kicking around.  Do you have a web show idea?  Are you thinking of launching one?  Have you thought it through?  What have I missed here?

There’s been a lot of movement in the web video world of late, and as a micro media mogul at my very core, I’ve been paying keen attention to it.  Broadband proliferation, the rise of smart, connected TV’s, set-top boxes from Google, and PC to TV app-based systems like Boxee, are all driving forces behind these shifts. Now, with web entrepreneurs like Jason Calacanis jumping into the fray on the content side, there are some indicators that a new, vital marketplace is emerging for web TV content.

The long term vision is to have 30 shows that each have a natural audience of between 10,000 and a million people, Maybe they have on average 100,000 views each which means we could have 3 or 4 million people a week watching these shows pretty easily I think.

- Jason Calacanis, from LA Weekly post

For some time, I’ve had this idea to create a stable of niche market shows that appeal to passionate, targeted audiences – and build on a social web component to help viewers be more engaged with the content.  Now I’m certainly not the only person who’s had this idea -Revision3, Next New Networks, and TWiT, among others – have been enjoying successes as trailblazers of this medium.   At the same time, the field of battle is littered with good web shows that failed to get the traction needed to become self-sustaining.  Here’s a couple “good” failures I created myself.

Crafty Nation Episode

Pregnantly Plump Promo

The reasons these failed are instructive and manifold, but thankfully we failed fast.

New Marketplace – New Risks and Complexities

Never in the history of television has it been easier to bring a show to market.  Gone are barriers to entry of FCC licenses, prohibitive transmission facility costs, large staffs, and high priced talent.  Just about anyone – this very minute – can launch their own web TV show.  As with the blogging market, the cream rises to the top. Those with more resources, higher volume, and better content get more traffic and are as a result, more successful.

I’m operating under the assumption that any content play like this will have advertising as the primary revenue model.  Premium content models would depend on the niche and the quality and utility of the content in question.  I believe that there is a delicate balance between niche and scale here.  Beyond that, you have to take into account whether the segments that you target are broadband connected and inclined to watch web video.

New web TV delivery platforms are opening up new distribution pipes for content producers, and as more people watch web TV on their “smart” connected TV’s, the more indistinguishable the experience will be from watching regular TV.  Having said that, I believe the more viewers blend the PC to TV experience – pushing web video to their 42″ flatscreen HDTV’s – the more they will gravitate toward higher production value content – separating the wheat from the chaff.

Is This Really What The People Want?

Consumer demand for this type of content also appears to be mercurial.  While by some accounts, web video – and not just the short form kind – is seeing increased consumption rates during traditional prime time hours, much of it via some PC-to-TV connection.  At the same time though, Nielsen research says overall online video consumption is down for the first quarter of 2010.  I wonder if the reason for the decline might be that people are becoming more selective about the online video choices they make, especially for those watching on their big screens.

The success of video content networks like these hinges largely on the availability of broadband.  The expectation is a seamless viewing experience between regular TV and web delivered video on your TV.  As Verizon is ending their FiOS deployment and AT&T threatening to slow their broadband rollout, that leaves cable companies wiring houses with fast pipes.  Unless they can find a way to make money off of “over the top” video, they have a vested interest in seeing it as a threat.

So this is a very complex marketplace with a lot of moving parts.  My hat is off to those who have had success thus far.  As demand for this content rises, it will be instructive to watch the market levers that drive successes and setbacks for web video ventures.

What’s Next

As I said in this interview with Don Martelli of Shamable, “Good ideas and good products aren’t enough”.  As the web video ecosystem matures, new players taking the field will have to balance startup cost containment with immutable, inevitable burn associated with creating high production value TV.

Me? I’m sitting on the sidelines for now waiting to see who enters the fray next.  So readers, are any of you closet micro-media-moguls?  Are you watching video “over the top”?  What kind of shows would you watch?

Uh oh!Buzzmachine’s Jeff Jarvis yesterday detailed a very compelling IBM study on TV and internet use. The complete study results are available for download here. For folks like me, currently a foot soldier of traditional TV, his post header – “TV Explodes” – merely fuels our worst fears and suspicions. (I wish he’d stop saying “explodes” though!) Quietly, and off the record, my sources tell me high level executives at a certain network have been heard saying “TV is dead.. the future is the internet”. Parts of the IBM study seems to buoy that belief, and outline several key shifts in how we are consuming, creating and particpating in media. Some of the results are promising for Television though, so don’t count us out just yet. The survey is very informative and I’d encourage readers to download the entire study.

Consumers are seeking consolidated, trustworthy content, recognition and community when it comes to mobile and Internet entertainment. Armed with PC, mobile and interactive content and tools, consumers are vying for control of attention, content and creativity. Despite natural lags among marketers, advertising revenues will follow consumers’ habits.         

To increase usage of new channels, consumers ask for consolidated content and thoughtful recommendations.

Users reported significant incidence of user contribution and interactivity.

For those respondents who contributed content online, they did so for recognition and community.

Consumers are increasingly contributing to online video or social networking sites: nine percent of German and seven percent of U.S. respondents claim to have contributed to a user-generated content site; 26 percent of U.S. respondents reported contributing to a social networking site.

Looks like a lot of people want to be more involved in, or have a stake in their content. Folks are looking for dialogue and community, not just content. Sab Kanaujia, NBC’s VP for Digital Product Strategy, recently participated in an online Wall Street Journal discussion with Revver chariman and founder Steven Starr entitled “Is Web Video a Threat to TV?” and posted excerpts on his blog. There’s interesting back and forth between Kanaujia and Starr and it’s worth checking out.  

To me, that isn’t the question. The question is: “Is online activity a threat to TV?” Clearly the answer is yes. I left a comment on his blog, which has yet to clear moderation, which essentially pointed out that smart media makers are creating content, conversation, and community online. Video alone isn’t enough, it’s simply the icing on the cake.Of note to me in this study was the question: “What would increase your use of mobile and Internet entertainment?” to which 21% answered “Niche site that specialized in genre or category content” (IBM Study). So as I continue to operate from the unique perch at the intersection of old and new media, I’m both buoyed and concerned by these revelations (or merely statistical support for what many of us have suspected for some time). Many of these findings spell the end of many a television career, but at the same time, create huge opportunities for those who can capitalize on it. This is the time to strike.

Capricorn, Community, and Craft

Just before boarding a flight to the Craft Hobby Association show this past Friday, I gave one last check on Twitter. Twitter friend and resident astrologist @KrazyKritter had just posted Capricorn. Now look, I’m not normally superstitious, but the outlook for Capricorn resonated with me.

“Today is finally the right time to embrace a new idea and work on fleshing it out”horoscope for Capricorn, 7-20-07

I was energized by this message as i flew to Chicago to cover this huge crafting industry trade show for Crafty Nation our new media venture.

The show was a huge success for us, by way of coverage and for getting our brand out there. We met wonderful people working in this space who were very excited about what we are creating – folks like Margot Potter, Candie Cooper, Katie Hacker, Cari Clement, Debba Haupert, Nicole Mumma, and Amy Romano. Why build a social network and content channel for crafters? Well for one, it’s a natural for social networking. Crafters are passionate about what they do and love to share their ideas and their work with others. They truly are a community. Even at the CHA, which is a decidedly commerce driven event, the community was vibrant and energizing. Craft and Hobby is a 30 billion dollar industry and there are many brands out there looking to associate themselves with the online craft conversations.

promoting the Crafty Nation brand during an education session at CHA

Fleshing Out the Idea

Now it’s time to tackle the most important part of Friday’s horoscope: “work on fleshing it out”. This means listening to our “board of advisors”, the early adopters of CraftyNation’s social media platform. How do we build it and make it better? A drop dead simple, stare-you-in-the-face, idea about how to do that came from Margot Potter. She told me that crafters like to customize their profiles because they’re, well, creative. Thank you Margot!! @conniereece, @AnnOhio, @WickedStepmom, @Uavery, @brendajos, and many more “Twitter Knitters” have been tremendously helpful in pointing out usability issues. What we’ve done with our phase one beta launch is to take an idea that only a year ago was a discussion over coffee, between myself and business partner Toni Lyn, and turned it into a strong start for something that will only grow. As we build out Crafty Nation, it’s the feedback from our community that will drive the direction and growth of this space, so that we can help create real value. We want to give voice to the vibrant fabric of the craft community, and create a place where we’re merely custodians of something much larger than the site itself.

Niche Market Video Content Engaging Your Target Audience

Here’s a link to the programs we’ve created. We also did some quick turnaround daily dispatches from the conference. Video is a very big part of Crafty Nation. Our video content celebrates the creativity and spirit of crafters, and our hope is that it acts as a springboard for conversation and community on our site.

At a dinner on Monday night with Lee Aase and Dennis McDonald, that was supposed to include Jeremiah Owyang, we discussed social media, niche market content, and the evolution web video. Dennis and Lee both have tremendous insight into this space, and are lovely dinner companions. Great food and conversation. Jeremiah’s absence led us to wonder if he was in fact a real person, or just an avatar.

The CBS/Wallstrip deal that I wrote about on Monday got me thinking about how I and other people define themselves in this space. I’ve been making a good living in the media business for many years now and despite seismic shifts within the industry, I’m pursuing opportunities presented by emerging media models.

To create opportunity, I believe you have to think beyond the limits of the traditionally defined media roles of cameraman, producer, or talent. I think the emergence of the micro media mogulis emblematic of this shift, a shift that is blurring, if not erasing the line where media jobs fall above (executive and management) or below (crew and production staff). So as media workers begin to chart a new course in these re-defined roles, they are faced with a number of questions. Not the least of which is how much entrepreneurial fire do they have in their belly. Are you as passionate about the art of the deal as you are about the art of your media? Or do you prefer the comfort of steady paycheck?

What if you’re somewhere in the middle of those two options? An innovative media company called Next New Netwoks offers unique opportunities to those whose passions are weighted more on the side of media maker, rather than media mogul. I inadvertantly gave them kind of short shrift the other day when I asked this:

I have to wonder though, what is the value (read deal) for the content creator/micro-media-mogul, of aligning with a Next New Network.

Looking back, my wording seems a bit dismissive. Purely unintentional, as I truly wondered precisely what the deal was. Next New Network’s Tim Shey contacted me with more details about what an agreement with NNN looks like. Independent media makers can leverage their creativity for a regular show based fee by entering into licensing agreements with Next New Networks.

We create and build networks which are fully owned Next New Networks properties,
and then license or commission shows to run on those networks. Show
producers who work with us get a guaranteed, regular fee for the
right to run their shows, upon delivery, whether we sell advertising
or not (in other words, it is not rev-share dependent).

This model isn’t necessarily a perfect fit for every producer, but
we’re here to work with the people for whom that is; there are lots
of other options in the marketplace (YouTube, Revver, Blip,
Brightcove, Videoegg, etc) for people who want to bootstrap their own
independent network and have someone work with them for a rev share,
as well as companies like PodShow which will work in a joint
ownership / partnership model.

-Tim Shey via email, published with his permission

Next New Networks’ impressive leadership roster brings together a strong list of executives drawn from old and new media. In a media landscape of ever expanding opportunity for savvy, independent media makers, Next New Networks provides unique and creative arrangements for those who want to make a living doing what they love.

So where do you fit in to all of this? Are you a micro media mogul, or a media worker? Or maybe somewhere in between?

Wallstrip, the online financial news show where “stock culture meets pop culture”, has been purchased by CBS Interactive for a price tag reported to be far less than the rumored $5 million price tag. Wallstrip announced the news on their show in typically tongue in cheek fashion, asking CBS employees about the deal on the sidewalk in front of “Black Rock”

Click To Play

CNET reports that it was CBS Interactive president, and former Silicon Valley M&A maverick, Qunicy Smith that sealed the deal. In a NewTeeVee article by Liz Gannes, Wallstrip’s distribution and syndicaton are reported as favorable considerations in CBS’ decision to buy the show. As Wallstrip puts it: “Watch Wall Strip where YOU want!” Here’s a snip of Wallstrip chief Howard Lindzon’s reaction to the deal:

I am dipping my toes tomorrow. I like their syndication strategy and I am bullish on Quincy and the Interactive Division of course.

I am looking forward to making Wallstrip better every day. Congrats to the Wallstrip team for their hard work and our investors for their sheer genius. Awesome day.

-Howard Lindzon

This points to two trends that this content creator hopes to take advantage of:

Now big media companies can sit back watch while savvy media makers bootstrap their content business models, and then simply come by waving cash and cherrypick the best. Call me old fashioned, but I like the sound of that! Here’s a sneak peak at one of the niche market content plays Verge New Media is creating.

Click To Play

Another emerging trend in the niche market content space is the rise of the aggregators like Network2.TV and Next New Networks. The team at Next New Networks seems very happy with their recent tip of the hat from TechCrunch. Surprisingly TechCrunch made no mention of Jetset, which I’ve often praised here as very smart interntet community TV. Next New Networks describes their model this way:

Next New Networks had some simple goals in launching: be authentic voices of the communities we launch networks around; build networks around online emerging television with web features that allow others to share, contribute and distribute; and be dependable and reliable

I have to wonder though, what is the value (read deal) for the content creator/micro-media-mogul, of aligning with a Next New Network. Wallstrip is an example of going it alone and bootstrapping. Maybe there is merit in that strategy for the entrepreneurially inclined.

So who will be the next small TV acquistion headline? Maybe it will be the surreal, sexy, sci-fi stylings of Galaciticast, or the hip, twenty-something web comedy Something to Be Desired. I think niche market web content is a HUGE sandbox that is creating tremendous opportunity for micro media moguls. I suspect content that Verge New Media has in the pipeline will be part of that mix, creating value in niche market content.

Finally, Amanda Chapel, of Strumpette, was recently sighted on Twitter describing value like this:

value is based on standards; standards are vetted by hierarchy. A bank is a bank for reason and that’s where the money is
- Amanda Chapel via Twitter

Privately, she added this: (and agreed that I publish it)

branding, seduction, under promise and over deliver. Ya can’t go wrong.

Apparently value, and money, can also be found in niche market content created by savvy, agile new media startups. Look for more of that from me and form legions of other media makers. Who do you think are the new micro media moguls to watch this year?

How about just calling it MEDIA? Sure, labels are useful, but at the end of the day there will be media that people connect with, and the unwatched, unread remains. There seems to be a renewed slugfest between the “revolutionaries” storming the gates of traditional media, and the keepers of corporate status quo. As both sides trade barbs, it’s curious to this blogger why the loudest amongst both sides of this “debate” promote such zero-sum theocracy.

From bloggersblog today, a link to this rant against blogs from South Africa’s Sunday Times, calling blogs “the air guitars of journalism” And from my favorite contrarian Strumpette, some snarky satire on the introduction of MLB’s “Citizen Player Program”

Chris Brogan lends his typically keen insight and measured criticisms to discussions that took place at AlwaysOn, Hollywood. His concerns that “we” (people who create media independent of large corporate infrastructure) are living in a fishbowl. Brogan then takes the informations he’s gathered and builds a very smart roadmap for moving beyond amateur media. Chris “gets it”…big time.

In almost no time, “talking about nothing” shows are going to dry up. You have to deliver value. In video, audio, and even a blog, if you want to bring your message into a larger circle of people, you’re going to have to give value back for what you’re doing.

Most of this discussion seems to be framed in an either/or construct, which I believe to be a false pretext. Those who believe that Web 2.0, social media, and citizen content will completely evaporate are wrong, just as wrong as those who believe that the democratization of media spells the demise of large corporate media. What I see happening is that the “amateurs” are building relationships with their audience, and with corporate media. There, you’ll find the winners. Don’t believe me? Then why are guys like Jeff Jarvis having dinner with Rupert Murdoch and making deals with Washingtonpost.com?

For those of you who believe that bloggers don’t have juice, how do you reconcile CNN’s decision to release Presidential debate footage under a Creative Commons license? Clearly they were bowing to the outcrys of the “air guitar” players of the blogoshpere.

Much of what is taking place in social media space is all about buzz, and in-the-moment, viral types of content. This is the type of media that I believe will be the shortest-lived. They are also easy targets for critics as the sum-total of ALL new/social media. The below-the-radar people in this space are sometimes the most successful. At VON07 in San Jose, I met Nicholas Butterworth of Diversion Media. His firm has built two successful social media sites, Travelistic and Snowvision. Butterworth says that the key to social media success is community and relationship.

Coverage of VON07

Butterworth, and other micro media moguls like Zadi Diaz and Steve Woolf of Jetset are defining a new class of crossover talent. Media makers who understand the community nature of social media/Web 2.0 and have the business savvy to grasp the value of that community. The fact that they’ve partnered with Next New Networks demonstrates that savvy and sets them apart from the “air guitar” set. Amani Channel of My Urban Report is another example of new media being courted by old. The Atlanta Journal Constitution has expressed interest publishing content from his blog. Again, the gates aren’t being stormed so much as being opened by smarter old media firms.

The bottom line is that the marketplace will decide the winners and losers of traditional vs. social media. I’d keep an eye on the ones creating value for their communites and the ones who build tools for participation.

Twittering in the shadow of my boss

I’m SOOOOOO going to get in trouble for this. I was guest camera on the set of NBC’s Meet The Press with Tim Russert today, and as always, there was lively discussion and debate. This show featured former CENTCOM commander Gen. Tony Zinni (ret.) and a reporter’s round table which spent the entire time discussing the Imus situation. So I thought, “let’s Twitter this!” Here’s a sampling of my Tweets:

So my Twitter friend, Annie Boccio tweets back with this:

So that translates into one “confirmed” person who was influenced by my real-time behind the scenes reporting. And as DC Media Maker, videoblogger and media consultant Jonny Goldstein points out:

The kind of people who use Twitter are highly connected people who use technology to spread ideas; many of us are bloggers, like me for example. We may well blog about what Jim reports. This multiplies the effects of Jim’s messages.

Jonny goes on to suggest the Tim should give me a hug for my enterprise. I don’t know if that will be forthcoming, but I’ll surely Twitter it if he does. To many of us, using Twitter as a promotional tool is second nature. In the corporate/old-media world, I’m finding that it’s not being adopted as easily as I would’ve thought. How are people in your worlds responding to it?

NBC’s Meet the Press is inducted into the NAB Hall of Fame on Monday, April 16th. Russert will be out in Las Vegas to accept the honors, so if any of my assembled readers or Twitter friends will be out there, stop by, shake his hand and say hi. I’m not able to attend this year, but Twitter friend Frank DuVal will be doing some guest reports from NAB here on this blog!

This DC Media Maker will be here tomorrow night. In fact, I’ve been asked to subject the assembled videologists to my 4:3 stylings. It’s always a fun, informative gathering, so come check it out!

Earlier today I posted an entry about journalists and self promotion that spoke of the notion of promotion being part of journalists new duties. Old media companies, new media upstarts, journalists, in fact anyone looking to be successful in social media, promotion, conversation and engadgement, need to look at the accomplishments of Zadi Diaz and Steve Woolf. The genesis of this post, to be perfectly honest, is that I’m all-a-twitter that Jetset’s Zadi Diaz added me as a Twitter friend today!!

In the words of social media raconteur and Twitter friend Chris Abraham… “She is SO MONEY!”

JETSET, assembled readers, is a wildly popular and immensely cool internet TV show/community that their site describes like this:

Created by Zadi Diaz and Steve Woolf, JETSET is an Internet and pop culture show for young adults featuring cool, weird, fun, geeky, underground, true-to-life, curious, quirky things and people found online and off.

Jetset, recently announced a licensing and distribution deal with Next New Networks, detailed here in a New Tee Vee article by Liz Gannes.

What I struggle with as someone working in old media, is the difficulty people in that space have with the notion of linking, sharing, engaging, and promoting. There are powerpoints, conference calls, mandatory meetings all geared toward stumbling clumsily into something that mimics and apes social media. Sometimes they/we get it right, sometimes..not so much.

Zadi and Steve, and many others like them, get it. They are part of a new class of entrepreneur that I call the “micro media mogul”. Agile, savvy, passionate.. they are the future.