At SXSW, Rob Millis and Will Coghlan of the newly launched Dynamo Player talked about different routes online video producers can take to try and make a buck. While the discussion ultimately led up to the duo’s demo of its new product, it was not above representing some different options fairly. The two talked about some of the pros and cons of advertising, such as:
– Fosters dramatic growth (financed first forty years of TV and last 15 years of Internet content)
– Blip.tv and YouTube define a stable market
– Reliable high quality programs…
– High value advertising demands high value programming (production). Costs a lot up front – higher costs to return
– Content can be unreliable, too hot to handle, or simply unappealing to advertisers. Short films, docs, r-rated or controversial content can’t get high value CPM.
– Advertisers can’t depend on a certain number of viewers
– Random advertising can damage brand while paying little to nothing
– Must have very, very large audience
– Can put a plane crash next to an ad for Delta or something to this effect
So the question is, will people pay for video online? They talked about how a lot of people are already doing just that through services like iTunes, which the pair say "changed the marketplace."
When deciding whether you want to ask people to pay for your content, you should ask yourself the following questions, according to Millis and Cohlan:
– What content do you pay for now?
– Have you ever quit halfway through a payment or subscription process arrangement?
– How often do you click away because of pre-roll ads?
– Are you willing to download software?
"Asking your audience to pay for your content is about eliminating these ‘why bother’ factors," they say.
Then ask yourself:
– How do you want to sell your content?
– Does it need to happen now or are you willing to wait for approval?
– How much do you need to charge, and how soon do you need to get paid?
– How much info do you want to ask your viewers for?
– How technically savvy are you?
– How important is image quality?
– Do you want your viewers to go to your site to watch or somewhere else?
– Do you want to be able to embed your video?
– Do you want to allow your viewers to share?
– What kind of content do you have – serial, one off, short format, feature length?
– How much publicity do you want/need?
"Ask these questions before you commit to a solution," they say.
One option is what they refer to as the Ze Frank model. This is a show that used drop.io to package shows that are otherwise free, and sell them together, so viewers can take them and easily watch them on their iPods.
Another option is to work with a partner like re:frame or NewVideo, which will work with you on getting stuff into iTunes or Hulu.
Then there are sites like MyContent.com and IndieFlix. With MyContent.com, you get choices like free streaming, rental streaming, and selling through the site as a paid download. They are your partner, and they only pay you after costs are covered. They have a revenue share deal. MyContent.com will take 35% after costs, and they charge a small monthly processing fee, according to the Dynamo guys.
With Indieflix, you can upload content through them, and sell it as a DVD or make it available as a paid stream, but they’re fairly selective about their content.
Another option they discussed was Amazon’s Create Space. Advantages of this, they say, are that Amazon’s a leader in cloud computing – they can store and serve content more efficiently, and at a lower cost, they are a well-recognized brand, and they’re connected to a lot of TVs and living rooms. They’ll list films on IMDB for you, and stream stuff to the XBox. However, they take 50% of royalties, and you can only suggest a price for your video.
Then there are YouTube rentals, a system Google introduced not too long ago, at Sundance. They let content creators set the price and viewing window, and they have the obvious huge advantage of social media for promotion. It doesn’t hurt that YouTube is also the second largest search engine, behind Google itself.
YouTube lets you use Google Checkout, which is easy enough, and content streams quickly. You need to use an AdSense account, and as you may know, Google is not up front about how much revenue sharing they do, although it’s supposed to be "the majority".
You can read about Dynamo’s own option here.