MAKING MONEY ON WEB SHOWS - My Two Cents

I can’t tell you how many people ask me how we make money with NonSociety.  It’s the third question after “What’s your name?” and “What do you do?”.

Let me back up for a second.  On March 28, the first annual Streamy Awards will take place in Los Angeles.  Think the Emmy Awards for original online video content.  In my opinion, this is the second step in legitimizing the production of shows only broadcast online.  The first step being money, the big bucks, that ole bottom line.

How can we generate a substantial revenue with videos on the Internet?  Certainly it must be easier than tv because the production is cheaper, the videos are non-proprietary and easily distributed for maximum exposure, and the views are quantifiable.  None of this is true for television.  Even cheap reality tv.

Let’s break this down:

1. Production:  The Internet audience doesn’t demand high quality for original online content.  It just needs to be entertaining.  So why are people pouring six figures into online series (Dr. Horrible by Joss Whedon) when you can spend less than half that and be just as popular?
2. Duration: Ah ha.  Entertainment is a pretty big variable.  DiggNation can last up to 45 minutes of 2 guys chatting and drinking beer.  BlahGirls episodes are less than a minute.  TMIweekly is 5 minutes.  What is the true attention span of our audience and does production value influence their decision to click away?
3. Cast:  To celebrity or not to celebrity?  This question weighs heavy on that bottom line.  But then again, if you use an A-lister, can you skimp on the production value?  Do web celebs count? Can we build more Tila Tequila’s? Let’s be honest, can we really consider iJustine and Kevin Rose celebrities?
4. Scripted v. Reality:  With the decline in episodic comedies and dramas on television, does that mean the Internet should follow suit?  Screw tv, look at YouTube.  Millions of people tune in to watch other people do anything and everything. Perhaps a happy medium is the answer.  I think people want to see others being genuine and giving real reactions to situations.
5. Money:  As fun as it is, we can’t just make videos to brag about being on the cutting edge of digital media.  Advertisers and sponsors have to come onboard to fuel your fire.  But with their head in the traditional tv/print campaign model, how do we convince them the Internet is where the cool kids hang out.  The fact that they could spend a fraction of their tv budget by investing in Internet video doesn’t seem to be convincing enough all the time.  There’s a debate here because viewers don’t always click through to the brand’s site, so what’s the value of associating their brand with the content?  How do you sell promoting their brand image instead of quantifiable sales?

Here’s my answer:  I think the key to web video is creating all different formats that can exist together.  Create a show with a relatively high production value with approachable characters or personas.  Have these people or actors make their own unedited videos so the audience gets to know and love them.  Concurrently, short, edited videos should be shot with experts and celebs to show a different perspective in an entertaining way.  Approach major brands with sponsorship packages that supplement their current traditional campaign (so they don’t get their panties in a bunch).  Pitch brand awareness and your distribution channels (which should be any website that will have you).  License the show to a major network to increase your eyeballs and the show’s value and revenue.

I could be wrong.  In fact, the “professionals” would probably disagree with me.  Today I watched Children’s Hospital(think Scrubs meets Grey’s Anatomy starring Lake Bell and Megan Mullaly) and Dr. Horrible(starring Neal Patrick Harris).  Both are high-production value, episodic comedies with big name celebs.  I couldn’t stand either, but the critics LOVE them.  Children’s Hospital is produced by the WB so sponsorship can be built into tv ad pitches, but Dr. Horrible is an independent production and self-funded by Joss Whedon (of Buffy The Vampire Slayer). 

I was reading “Screenwriters Strike Back”on Variety.com which plays Dr. Horrible against Ask a Ninja.  Whedon apparently spent six figures on three episodes of Dr. Horrible (to pay for celebs, backlot shooting, equipment, tv “sheen”, etc), while Ask A Ninja founders Kent Nichols and Douglas Sarine used $60,000 to launch a weekly show they continue to shoot out of Nichols’ apartment.  Their show generates over $100,000 monthly with sponsors like Verizon, Universal, and Net Flix.  Book deals are also in the works.

“According to digital ratings firm comScore, Internet users in the U.S. alone viewed 12 billion online vids in May, up 45% from May ‘07. The average user devoted 228 minutes per month to watching vids online,” says the article.  But what are they watching and why? And how do we as content producers show the Ketchums and Edelmens of the world that sponsoring and advertising on web shows is worthwhile?  What I really rant about are the Federateds who say we can’t secure the cash without them. 

In my opinion, we’re here at the edge of the digital frontier for online content.  Several people have made the leap and reached the other side to bask in their Internet money.  I’m in mid-air, and knowing me, I’ll come out alive :)