Internet video business challenges

I’m going to be going to see John Battelle this afternoon (he runs the blogging advertising network, Federated Media) and I’m going to ask him about the challenges of making an Internet content business work.

Here’s the trouble. Most people I know are getting advertising revenues of between $10 and $40 CPM. That means that for every 1,000 people who visit a Web site, an advertiser is paying somewhere around $10 usually (often less, and in some cases, far less — Jeremy Wright told me he was only getting about $.50 CPM when he runs Google’s ad bar).

Now, that sounds great, particularly if you can get a big audience and when you write a blog that has minimum creation costs (yeah, some posts take hours, but others can be done in minutes and you don’t need anything but a computer to do this). That low cost of production is why Jason Calacanis was able to create $25 million in value by lashing together 100 bloggers. But, let’s look deeper at video.

First, the videos I’m putting up are around 200MB a piece. The bandwidth distributors I know are charging $.14 or more PER GIGABYTE to distribute those videos. So, that comes to $28, or more for 1,000 downloads (if my math is right).

Wait a second here. We’re going to collect $10 in advertising to pay $28 in bandwidth? Who said video is a great business? We’re losing money, but I’m sure we’ll make it up in quantity. Heheh.

But we haven’t even covered our labor costs. Heck, yesterday’s lunch session had three of us working on it for an hour, then Eddie encoded it, edited it, and published it. That took him four more hours. Let’s assume you can get smart people to work for you for $30 an hour to do video. That right there is $90 just to shoot for an hour, plus another $120 for editing and publishing. $210 in fixed costs just to start, then the bandwidth. And you haven’t even started paying for my camera, my new Mac.

So, what’s the answer? Well, something has to give here. You’ve gotta change some of the numbers.

That’s what I’m working on. It’s also why I appreciate Seagate so much. They sponsored my show for several months and gave me some time to figure this all out.

Speaking of which, yesterday Herschel Horton asked “Are you getting paid by any of these companies for doing these interviews?”

No. The only company who has paid me money is Seagate. Anytime I run a show that an advertiser is paying me to do I’ll disclose that.

Oh, and do I think I’m going to be able to change these numbers? Yes. But it will be a challenge to putting together a network of videoblogs. Jason Calacanis didn’t have these types of distribution and content creation costs to deal with.

If Google and other advertisers can change the revenue numbers for video too, to be higher than the costs, we’ll see interesting new content created. If not, you’ll be stuck with watching kids dance.

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141 thoughts on “Internet video business challenges

  1. Hey, watch what you say about watching kids dance. One of my most popular YouTube videos is of Sticks’ final dance performance before he moved onto drums.

    Seriously, though, this is one of the questions I’ve wondered about too — all this video is great but how do you wrap the ability to make money around it. Embedded commercials? Bandwidth prices aren’t going to drop anytime soon, so I think you’ve definitely nailed the issues and I’ll be interested to see what answers you hit on.

    DnW

    Like

  2. Hey, watch what you say about watching kids dance. One of my most popular YouTube videos is of Sticks’ final dance performance before he moved onto drums.

    Seriously, though, this is one of the questions I’ve wondered about too — all this video is great but how do you wrap the ability to make money around it. Embedded commercials? Bandwidth prices aren’t going to drop anytime soon, so I think you’ve definitely nailed the issues and I’ll be interested to see what answers you hit on.

    DnW

    Like

  3. In theory, video advertising is worth more than text/image ads. Google Ads were nice at first, but I’m willing to bet a great deal of people have learned to tune them out just like ordinary banners. RSS certainly doesn’t help static ad revenue either. Maybe it isn’t that way now, but advertising should be paying more for 1000 views of their ad (even if it’s just a still frame at the end of a show) in a video than 1000 views of an ad on the side of a website. I’d say it’s worth at least 10 times as much, 20 times as much if their ad is a commercial at the start or middle of a video.

    Also, the easy way to kill bandwidth costs is to use services like cachefly and libsyn to host your videos. Pay for the space you need and get unlimited bandwidth.

    Like

  4. In theory, video advertising is worth more than text/image ads. Google Ads were nice at first, but I’m willing to bet a great deal of people have learned to tune them out just like ordinary banners. RSS certainly doesn’t help static ad revenue either. Maybe it isn’t that way now, but advertising should be paying more for 1000 views of their ad (even if it’s just a still frame at the end of a show) in a video than 1000 views of an ad on the side of a website. I’d say it’s worth at least 10 times as much, 20 times as much if their ad is a commercial at the start or middle of a video.

    Also, the easy way to kill bandwidth costs is to use services like cachefly and libsyn to host your videos. Pay for the space you need and get unlimited bandwidth.

    Like

  5. Robert,

    $10/CPM is very low for video ads, you should be able to at a minumum get $20+. Make sure not to go through a video network because they are going to sell your videos for bottom rates. Charge $30+ IMO. If you have an audience, advertisers will buy them.

    Try distributing your videos to other sites like Revver, iTunes, Google etc where you do not need to host them. You will drive traffic to your site (and in Revver’s case make money). Typically you would distribute your older videos, and get them to come to your site to see the new ones.

    Work a deal out with companies like LimeLight Networks so you can purchase a “tiered” package with a set amount of bandwith rather than streaming directly from your site. If you negotiate correctly, this will save you money.

    This is just a quick brainstorm for some ideas for you. We have been doing very well with our videos: http://media.digitaltrends.com

    Good luck.

    Ian Bell

    Like

  6. Robert,

    $10/CPM is very low for video ads, you should be able to at a minumum get $20+. Make sure not to go through a video network because they are going to sell your videos for bottom rates. Charge $30+ IMO. If you have an audience, advertisers will buy them.

    Try distributing your videos to other sites like Revver, iTunes, Google etc where you do not need to host them. You will drive traffic to your site (and in Revver’s case make money). Typically you would distribute your older videos, and get them to come to your site to see the new ones.

    Work a deal out with companies like LimeLight Networks so you can purchase a “tiered” package with a set amount of bandwith rather than streaming directly from your site. If you negotiate correctly, this will save you money.

    This is just a quick brainstorm for some ideas for you. We have been doing very well with our videos: http://media.digitaltrends.com

    Good luck.

    Ian Bell

    Like

  7. A couple of thoughts:

    Lets assume you can build a big audience. We must assume that, otherwise no business model is going to work.

    The consequences of that are:

    o Your production cost for a video may be an issue, but at least these don’t increase as the size of your audience increases.

    o Your bandwidth costs start to become a *big* issue

    So, you could address the bandwidth issue by taking a leaf out of YouTube’s book. That is, distribute videos at lower quality than you do now. It doesn’t have to be as bad as YouTube! However, I’m sure you can cut down the size of your downloads massively from where you are now, and still give the audience a great experience.

    Mind you – if you think you’ve got video “data size” challenges… well… my company is doing high-resolution, high-frame-rate digital video recording. Every two minutes, we can churn out 10.8GB of video data! And we do computer vision on all that.

    Like

  8. A couple of thoughts:

    Lets assume you can build a big audience. We must assume that, otherwise no business model is going to work.

    The consequences of that are:

    o Your production cost for a video may be an issue, but at least these don’t increase as the size of your audience increases.

    o Your bandwidth costs start to become a *big* issue

    So, you could address the bandwidth issue by taking a leaf out of YouTube’s book. That is, distribute videos at lower quality than you do now. It doesn’t have to be as bad as YouTube! However, I’m sure you can cut down the size of your downloads massively from where you are now, and still give the audience a great experience.

    Mind you – if you think you’ve got video “data size” challenges… well… my company is doing high-resolution, high-frame-rate digital video recording. Every two minutes, we can churn out 10.8GB of video data! And we do computer vision on all that.

    Like

  9. The real question is why are your videos so big?

    Nobody really cares about the quality of the video (look at YouTube). I personally hate that you switched to the H264 codec, and it sounds like to encode in H264 it takes lots of time and resources.

    Why produce such high quality, large files? Just to justify the purchase your new swanky dank camera? It is not like you are producing killer nature videos that need to be visually pleasing. You are doing interviews… In offices. Yes, I need to see the subtle color gradations between the desk and the computer monitor..

    Maybe if you had a couple of different formats to choose from (Including one for small, mobile screens), then not everyone would have to download the super big high quality version. If you had different file types with their respective size, then maybe people would choose the smaller files…

    Why would they download a smaller file? Because not everyone has a T1 connection. Some of us have really crappy (and slow) DSL connections. I would much rather download a “lower quality” version that was 50MB than a super high quality, large screen 200 MB file.

    Anything is better than H264, since I can’t watch the videos encoded in H264 on my low-end IPAQ…

    Like

  10. The real question is why are your videos so big?

    Nobody really cares about the quality of the video (look at YouTube). I personally hate that you switched to the H264 codec, and it sounds like to encode in H264 it takes lots of time and resources.

    Why produce such high quality, large files? Just to justify the purchase your new swanky dank camera? It is not like you are producing killer nature videos that need to be visually pleasing. You are doing interviews… In offices. Yes, I need to see the subtle color gradations between the desk and the computer monitor..

    Maybe if you had a couple of different formats to choose from (Including one for small, mobile screens), then not everyone would have to download the super big high quality version. If you had different file types with their respective size, then maybe people would choose the smaller files…

    Why would they download a smaller file? Because not everyone has a T1 connection. Some of us have really crappy (and slow) DSL connections. I would much rather download a “lower quality” version that was 50MB than a super high quality, large screen 200 MB file.

    Anything is better than H264, since I can’t watch the videos encoded in H264 on my low-end IPAQ…

    Like

  11. You think Mr. Furrier would be game for a Scoble Show logo/icon… Something that sets you each of the PodTech offerings/talents apart from one another?

    Just thinking out loud here… that gets you unique branding under the PodTech umbrella… but a brand that the Apple’s, Seagate’s and Sony’s of the world would sponsor… to reach the massive audience you’ve accumulated.

    Look to Greg Suprock at Nature Publishing Group. Their streaming content is getting really good sponsorship. Look to TED… BMW (that hits close to home with Mrs. Scoble huh?). So, the money’s out there. I don’t think it’s a CPM deal for you though. I think there’s some fantastically suited sponsor that could underwrite your whole show. (Whatever you do… don’t ask for people to sponsor your duckies)

    Furrier = Google. Scobles = YouTube. (As Mr. Zawadony’s saying today… He bought eyeballs man!)

    And, for what it’s worth, please keep the H264. It’s beautiful! Even Apple does the small, medium & large bit… just more encoding (ie money)…

    Gerald in Tulsa

    Like

  12. You think Mr. Furrier would be game for a Scoble Show logo/icon… Something that sets you each of the PodTech offerings/talents apart from one another?

    Just thinking out loud here… that gets you unique branding under the PodTech umbrella… but a brand that the Apple’s, Seagate’s and Sony’s of the world would sponsor… to reach the massive audience you’ve accumulated.

    Look to Greg Suprock at Nature Publishing Group. Their streaming content is getting really good sponsorship. Look to TED… BMW (that hits close to home with Mrs. Scoble huh?). So, the money’s out there. I don’t think it’s a CPM deal for you though. I think there’s some fantastically suited sponsor that could underwrite your whole show. (Whatever you do… don’t ask for people to sponsor your duckies)

    Furrier = Google. Scobles = YouTube. (As Mr. Zawadony’s saying today… He bought eyeballs man!)

    And, for what it’s worth, please keep the H264. It’s beautiful! Even Apple does the small, medium & large bit… just more encoding (ie money)…

    Gerald in Tulsa

    Like

  13. Hi Robert,

    I own a hosting company (470+ servers, hosting a lot of names you would know and even some stuff related to your blog — ask Matt M.), and I can tell you that our costs are a lot less than $.14/GB. Either you’re paying for something else other than just straight bandwidth, or else you just haven’t shopped around. For straight colo+bandwidth, you should be paying less than that.

    -Erica

    Like

  14. Hi Robert,

    I own a hosting company (470+ servers, hosting a lot of names you would know and even some stuff related to your blog — ask Matt M.), and I can tell you that our costs are a lot less than $.14/GB. Either you’re paying for something else other than just straight bandwidth, or else you just haven’t shopped around. For straight colo+bandwidth, you should be paying less than that.

    -Erica

    Like

  15. Hey Robert,

    Yeah, the CPM model works pretty well if you have tons of traffic, but if you’re a niche blog, it’s going to be tough.

    Battelle’s business of putting together small blogs into a big network/”federation,” is very compelling and will work, for sure. But, there are other ways.

    I’m with you on the sponorship idea, your deal with Seagate sounds great.

    My thought is this: You have to make great content and build a dedicated audience that is of interest to specific marketers and sell sponsorships. The sponsorship need to be special — customized — like the cool post rolls on Rocketboom. Or they can be micro-sites within a blog with a sponsors video content. We have to think about more than just banner ads.

    It’s like the early days of television, where shows were sponsored by specific companies. That’s the business opportunity now, in my opinion.

    Marketers understand that reaching small desirable audience is important — and they will be willing to pay way beyond the CPM equation.

    As far as your crazy hosting fees, maybe you should consider publishing in Flash for free? OK, I know that most Flash looks kind of weak (I use Google Video) but it works and it’s free.

    Andy

    Like

  16. Hey Robert,

    Yeah, the CPM model works pretty well if you have tons of traffic, but if you’re a niche blog, it’s going to be tough.

    Battelle’s business of putting together small blogs into a big network/”federation,” is very compelling and will work, for sure. But, there are other ways.

    I’m with you on the sponorship idea, your deal with Seagate sounds great.

    My thought is this: You have to make great content and build a dedicated audience that is of interest to specific marketers and sell sponsorships. The sponsorship need to be special — customized — like the cool post rolls on Rocketboom. Or they can be micro-sites within a blog with a sponsors video content. We have to think about more than just banner ads.

    It’s like the early days of television, where shows were sponsored by specific companies. That’s the business opportunity now, in my opinion.

    Marketers understand that reaching small desirable audience is important — and they will be willing to pay way beyond the CPM equation.

    As far as your crazy hosting fees, maybe you should consider publishing in Flash for free? OK, I know that most Flash looks kind of weak (I use Google Video) but it works and it’s free.

    Andy

    Like

  17. SlashChick: the $.14 per gig figure is what I was quoted by CacheFly, the company that hosts Digg, Revision 3, and Leo Laporte’s stuff. They do a lot more than just “hosting” and are closer to what Akamai does.

    Andy: I’m +very+ happy with what Seagate paid us. Obviously it’s not a $10 CPM deal.

    Like

  18. SlashChick: the $.14 per gig figure is what I was quoted by CacheFly, the company that hosts Digg, Revision 3, and Leo Laporte’s stuff. They do a lot more than just “hosting” and are closer to what Akamai does.

    Andy: I’m +very+ happy with what Seagate paid us. Obviously it’s not a $10 CPM deal.

    Like

  19. Why not expand Podtech to offer consulting services to help these companies take full advantage of social media and learn how to harness podtech and it’s offerings well.

    Thanks for being so transparent.

    Like

  20. Why not expand Podtech to offer consulting services to help these companies take full advantage of social media and learn how to harness podtech and it’s offerings well.

    Thanks for being so transparent.

    Like

  21. Greg: Obviously one thing I’m gonna look at is doing lower-quality video. I just got my Mac so I can play around with that from now on.

    Like

  22. Greg: Obviously one thing I’m gonna look at is doing lower-quality video. I just got my Mac so I can play around with that from now on.

    Like

  23. $10CPM does not equal one advertiser paying $10 for 1000 people. It means that there has been $10 of money spent over 1000 exposures whether through CPM or CPC, e.g. 1 to 100 people could have clicked through at a charge to the advertiser of $1 per click through. CPM is such a misleading measure, despite the fact that it’s handy for comparing CPM, CPC, CPP/CPS (purchase/sign-up), etc.

    Like

  24. $10CPM does not equal one advertiser paying $10 for 1000 people. It means that there has been $10 of money spent over 1000 exposures whether through CPM or CPC, e.g. 1 to 100 people could have clicked through at a charge to the advertiser of $1 per click through. CPM is such a misleading measure, despite the fact that it’s handy for comparing CPM, CPC, CPP/CPS (purchase/sign-up), etc.

    Like

  25. Robert,
    Something I have been meaning to tell you for some time is that your videos are unnecessarily large. 200MB is too large a size for a video file. Many people do not have the bandwidth to download such large files. At least you can provide a low res version, so that anybody wanting to download can choose between the two sizes of files.

    Like

  26. Robert,
    Something I have been meaning to tell you for some time is that your videos are unnecessarily large. 200MB is too large a size for a video file. Many people do not have the bandwidth to download such large files. At least you can provide a low res version, so that anybody wanting to download can choose between the two sizes of files.

    Like

  27. dvd weekly newsletters? it is uncool, not on the inetrent and not web20? what a heck, just do the math. plus, you could put hi-def clips on the dvd.

    Like

  28. dvd weekly newsletters? it is uncool, not on the inetrent and not web20? what a heck, just do the math. plus, you could put hi-def clips on the dvd.

    Like

  29. Hi Robert,

    I worry about this very issue, since I also have a web site dedicated to video interviews with entrepreneurs (ZBIZ.TV). I’m happy to share a few thoughts I have on the matter. If they turn out to be useful, perhaps we can meet for lunch some day. I have the feeling we’d get along royally…

    First, forget about the CPM model. Think in terms of flat rates per issue (specifically, per video).

    Second, make it a point to space out your issues. They tend to come out in clumps. Space them out to no more than one a day, 5 days a week. Then you’ve got something a little more manageable to work with, and companies could purchase sponsorships in weekly, monthly or quarterly commitments.

    Third, I don’t think it’s rude or interruptive to begin your interviews with a word of thanks to a specific sponsor (while their logo and clickable URL appear on the screen), perhaps endorsing a particular special they may be offering to your viewers and then move on from there. But don’t give those out to anyone who pays. Make sure they’re someone you personally believe in. Your endorsement is worth a lot in many circles.

    Fourth, you do two types of things with companies: you have conversations with the CEOs and you have demos. I don’t think it would be unethical to charge the company a flat fee if they want to do a demo, especially as long as you have a disclosure statement up front that clearly says that they paid for the right to have their demo in front of this audience.

    Fifth, when you do advertisements, you might also want to think of RocketBoom’s example. They are charging $60-80,000 per week to sponsor their daily 3.5 minute show. You probably don’t have the same mass audience they do, but I’d be willing to bet you attract a good crowd that is steadily growing. Think about them when you set your rates…. and remember, they make their advertisements fun and unique when they do them.

    All that said, I’m nowhere near the audience size you have probably amassed by now, so this will be pie in the sky thinking for yours truly for the foreseeable future. But all of this is based upon my experience in running a very lucrative, but small and focused web site in the past (ClickZ) and what I might do if I were in your enviable position.

    Hopefully, this is a direct answer to the questions you raised which I don’t see truly addressed above.

    Keep up the great work, dude. I’m a big fan.

    Andy

    Like

  30. Hi Robert,

    I worry about this very issue, since I also have a web site dedicated to video interviews with entrepreneurs (ZBIZ.TV). I’m happy to share a few thoughts I have on the matter. If they turn out to be useful, perhaps we can meet for lunch some day. I have the feeling we’d get along royally…

    First, forget about the CPM model. Think in terms of flat rates per issue (specifically, per video).

    Second, make it a point to space out your issues. They tend to come out in clumps. Space them out to no more than one a day, 5 days a week. Then you’ve got something a little more manageable to work with, and companies could purchase sponsorships in weekly, monthly or quarterly commitments.

    Third, I don’t think it’s rude or interruptive to begin your interviews with a word of thanks to a specific sponsor (while their logo and clickable URL appear on the screen), perhaps endorsing a particular special they may be offering to your viewers and then move on from there. But don’t give those out to anyone who pays. Make sure they’re someone you personally believe in. Your endorsement is worth a lot in many circles.

    Fourth, you do two types of things with companies: you have conversations with the CEOs and you have demos. I don’t think it would be unethical to charge the company a flat fee if they want to do a demo, especially as long as you have a disclosure statement up front that clearly says that they paid for the right to have their demo in front of this audience.

    Fifth, when you do advertisements, you might also want to think of RocketBoom’s example. They are charging $60-80,000 per week to sponsor their daily 3.5 minute show. You probably don’t have the same mass audience they do, but I’d be willing to bet you attract a good crowd that is steadily growing. Think about them when you set your rates…. and remember, they make their advertisements fun and unique when they do them.

    All that said, I’m nowhere near the audience size you have probably amassed by now, so this will be pie in the sky thinking for yours truly for the foreseeable future. But all of this is based upon my experience in running a very lucrative, but small and focused web site in the past (ClickZ) and what I might do if I were in your enviable position.

    Hopefully, this is a direct answer to the questions you raised which I don’t see truly addressed above.

    Keep up the great work, dude. I’m a big fan.

    Andy

    Like

  31. Robert,
    Since a large percentage of your viewing audience are highly educated, tech savvy people in an attractive demographic, I would think that you could command a higher CPM compared to most web sites. Especially if you start inserting reasonably short video ads at the beginning of your videos. I’m not sure about other people but I would definitely put up with a 5-10 second video ad at the beginning of the video in return for a high quality informative video.

    Like

  32. Robert,
    Since a large percentage of your viewing audience are highly educated, tech savvy people in an attractive demographic, I would think that you could command a higher CPM compared to most web sites. Especially if you start inserting reasonably short video ads at the beginning of your videos. I’m not sure about other people but I would definitely put up with a 5-10 second video ad at the beginning of the video in return for a high quality informative video.

    Like

  33. Anon: have you been to the SF bay area? Thought not. Editors out here ARE expensive and I’m not gonna ship my big video files somewhere cheaper. And, I don’t just hire people to do editing. I hire people who are smart, know the market, can do a variety of tasks.

    Like

  34. Anon: have you been to the SF bay area? Thought not. Editors out here ARE expensive and I’m not gonna ship my big video files somewhere cheaper. And, I don’t just hire people to do editing. I hire people who are smart, know the market, can do a variety of tasks.

    Like

  35. mdoeff: that is true for my audience, but if PodTech is going to be a business we need to expand out of the tech/influential market. There the CPMs will fall in line with expected norms. General Motors and Procter and Gamble cares about mass market, not just influencers.

    Like

  36. mdoeff: that is true for my audience, but if PodTech is going to be a business we need to expand out of the tech/influential market. There the CPMs will fall in line with expected norms. General Motors and Procter and Gamble cares about mass market, not just influencers.

    Like

  37. One thing you could do is to stop paying for traffic. That would take your CPM cost down to zero. Surely a man of your stature will command an audience without getting involved with CPM.

    Get social, get viral.

    And the reality is that if your content quality is healthy, a drop in your image or sound quality won’t make much of a difference to your product from a users perspective.

    All the best

    Tom

    Like

  38. One thing you could do is to stop paying for traffic. That would take your CPM cost down to zero. Surely a man of your stature will command an audience without getting involved with CPM.

    Get social, get viral.

    And the reality is that if your content quality is healthy, a drop in your image or sound quality won’t make much of a difference to your product from a users perspective.

    All the best

    Tom

    Like

  39. Uh, sorry. I just had a brain fart. For some reason, I thought you were paying for traffic rather than getting paid for referrals.

    Who put whiskey in me tea?

    so…to flip….surely a man of your stature will command advertising revenue above $10 CPM….

    All the best

    Tom

    Like

  40. Uh, sorry. I just had a brain fart. For some reason, I thought you were paying for traffic rather than getting paid for referrals.

    Who put whiskey in me tea?

    so…to flip….surely a man of your stature will command advertising revenue above $10 CPM….

    All the best

    Tom

    Like

  41. Robert
    I plan on downloading your videos and putthingthem on google video and youtube. You will make up all your costs with allthe free promotion and traffic they will give you 🙂

    If you dont like that, you can search those and other sites all day long and issue takedown notices if you can find where i post your stuff.

    Then you can sue them and maybe get a bunch of google stock !

    thats how you make money !

    Like

  42. Robert
    I plan on downloading your videos and putthingthem on google video and youtube. You will make up all your costs with allthe free promotion and traffic they will give you 🙂

    If you dont like that, you can search those and other sites all day long and issue takedown notices if you can find where i post your stuff.

    Then you can sue them and maybe get a bunch of google stock !

    thats how you make money !

    Like

  43. Robert,

    Mark Cuban is right on target. I will take his idea little further.

    Why not allow users who download your video to share and transfer it to other users? This way, you will not need to purchase more bandwidth to txfr video to more users.

    Figure out a way to manage digital rights so that even though video can be transferred from user to user but it can’t be played without a digital license. And the license is only distributed from your site.

    Combine the digital license with new relevant ads that get embedded with video.

    Google (someone else info, my ad) + peer-to-peer bulk data transfer (Napster, only legal) = Ad revenue + Infrastructure cost saving.

    Anil

    Like

  44. Robert,

    Mark Cuban is right on target. I will take his idea little further.

    Why not allow users who download your video to share and transfer it to other users? This way, you will not need to purchase more bandwidth to txfr video to more users.

    Figure out a way to manage digital rights so that even though video can be transferred from user to user but it can’t be played without a digital license. And the license is only distributed from your site.

    Combine the digital license with new relevant ads that get embedded with video.

    Google (someone else info, my ad) + peer-to-peer bulk data transfer (Napster, only legal) = Ad revenue + Infrastructure cost saving.

    Anil

    Like

  45. Whatever you do, I’d stay away from a “pay for content model,” like being paid fees for demos. Even if you disclose it, you’ve transformed the video into a commercial — and we’ve already got lots of those. That’s not what people want to see more of.

    It seems like it probably makes sense to do several of the things suggested above together. Lower your bandwidth costs by accepting a lower-quality video, charge a premium ad rate (which rich content like video ought to be able to command), make use of alternative distribution methods (iTunes, etc.), etc. There’s not going to be a single silver bullet.

    Like

  46. Whatever you do, I’d stay away from a “pay for content model,” like being paid fees for demos. Even if you disclose it, you’ve transformed the video into a commercial — and we’ve already got lots of those. That’s not what people want to see more of.

    It seems like it probably makes sense to do several of the things suggested above together. Lower your bandwidth costs by accepting a lower-quality video, charge a premium ad rate (which rich content like video ought to be able to command), make use of alternative distribution methods (iTunes, etc.), etc. There’s not going to be a single silver bullet.

    Like

  47. MarkT: I doubt I’d do that. Although the Demo Conference certainly is quite profitable and they do exactly that, albeit in a conference setting.

    Anil: using BitTorrent or other P2P distribution schemes (RedSwoosh) is very interesting to me. I’m definitely looking into those.

    Like

  48. MarkT: I doubt I’d do that. Although the Demo Conference certainly is quite profitable and they do exactly that, albeit in a conference setting.

    Anil: using BitTorrent or other P2P distribution schemes (RedSwoosh) is very interesting to me. I’m definitely looking into those.

    Like

  49. @28. Good one…assuming that’s the real Mark Cuban, even if not, still a good model. Heh. =)

    Sponsorship, placements are more the role, strict advertising is on wane, even in things TV.

    Maybe sell a Scoble Show DVD? For the busy biz types…

    Like

  50. @28. Good one…assuming that’s the real Mark Cuban, even if not, still a good model. Heh. =)

    Sponsorship, placements are more the role, strict advertising is on wane, even in things TV.

    Maybe sell a Scoble Show DVD? For the busy biz types…

    Like

  51. hmm I remember the late 90’s when everyone used to start a website to sell something, just to end up a loser. The same thing is happening all over again. Many companies have already been sold in ebay. Dig into techcruch if you want for more info :-). The same might apply to you if you dont act soon. I would suggest you probably sign a deal with microsoft or with youtube aka google. And host your video in Youtube or soapbox. Get a fair chunk of their ad revenue. Bittorrents likely wont work, as my “Gut” says that most of your website viewers, surf during office hours/univ hours. Who will want to read such stuff at house 🙂 In both places p2p/bittorrents are usually blocked… and last make the videos more interesting. I for sure am not interesting in hearing an interview about your safari, or a definitely loss website like flock or the jaljah or something your wrote about yesterday. More interviews with real companies like Microsoft, google, yahoo, myspace etc. I mean atleast to start with you need big brand names to get you popular.

    Like

  52. hmm I remember the late 90’s when everyone used to start a website to sell something, just to end up a loser. The same thing is happening all over again. Many companies have already been sold in ebay. Dig into techcruch if you want for more info :-). The same might apply to you if you dont act soon. I would suggest you probably sign a deal with microsoft or with youtube aka google. And host your video in Youtube or soapbox. Get a fair chunk of their ad revenue. Bittorrents likely wont work, as my “Gut” says that most of your website viewers, surf during office hours/univ hours. Who will want to read such stuff at house 🙂 In both places p2p/bittorrents are usually blocked… and last make the videos more interesting. I for sure am not interesting in hearing an interview about your safari, or a definitely loss website like flock or the jaljah or something your wrote about yesterday. More interviews with real companies like Microsoft, google, yahoo, myspace etc. I mean atleast to start with you need big brand names to get you popular.

    Like

  53. Robert

    Having been working advertising deals for video and audio for over a year now. What we are finding that even though the audiences are highly targeted and the content is really good many advertisers cannot get their brains unwrapped from the Radio and TV pay models.

    It is generally pretty straight forward to get at least a $20.00 CPM but it is really tough to break above the $35.00 CPM rate. Those that are telling you they are getting higher than $35.00 on a consistent basis are in the minority.

    My experience has been even when I have proposed flat rate deals the vendor always wants full blown demographic work ups, and also total viewership which they end up doing some second grade math on to come up with a Cost Per View. Then they model that into standard Cost Per Acquisition models. You can better believe the manager that signs that advertiisng insertion order is going to have scrutinized the potential return, and you are not going to get a sponsorship amount higher than their CPA models allow for if that is their business.

    Suggestion you should take all of your video and produce a seperate audio only track and put that on a seperate feed. I think you may be suprised on the download number comparison. My stats show a nearly 20 to 1 ratio aka Audio gets downloaded 20 times more than the video does.

    Some will contest this but I have a pretty wide spread of data to back that up. Most of us are working, and driving to work. Most do not have time at work unless you want to get fired nor in thier busy lives to dedicate attention to watching a long video, short clips 2-3 minutes sure but long videos no way. I would rather listen to the audio only while in the car and stuck in traffic.

    The solution for you at this point it two fold compress the heck out of the video and go to a lower resolution and create a seperate Audio only clip.

    Next join me in encouraging developers to incorporate BitTorrent in all automated download applications like Juice, or develop a new integrated rss aware download application that has BitTorrent built in natively that will help reduce the bandwidth cost.

    Todd..

    Like

  54. Robert

    Having been working advertising deals for video and audio for over a year now. What we are finding that even though the audiences are highly targeted and the content is really good many advertisers cannot get their brains unwrapped from the Radio and TV pay models.

    It is generally pretty straight forward to get at least a $20.00 CPM but it is really tough to break above the $35.00 CPM rate. Those that are telling you they are getting higher than $35.00 on a consistent basis are in the minority.

    My experience has been even when I have proposed flat rate deals the vendor always wants full blown demographic work ups, and also total viewership which they end up doing some second grade math on to come up with a Cost Per View. Then they model that into standard Cost Per Acquisition models. You can better believe the manager that signs that advertiisng insertion order is going to have scrutinized the potential return, and you are not going to get a sponsorship amount higher than their CPA models allow for if that is their business.

    Suggestion you should take all of your video and produce a seperate audio only track and put that on a seperate feed. I think you may be suprised on the download number comparison. My stats show a nearly 20 to 1 ratio aka Audio gets downloaded 20 times more than the video does.

    Some will contest this but I have a pretty wide spread of data to back that up. Most of us are working, and driving to work. Most do not have time at work unless you want to get fired nor in thier busy lives to dedicate attention to watching a long video, short clips 2-3 minutes sure but long videos no way. I would rather listen to the audio only while in the car and stuck in traffic.

    The solution for you at this point it two fold compress the heck out of the video and go to a lower resolution and create a seperate Audio only clip.

    Next join me in encouraging developers to incorporate BitTorrent in all automated download applications like Juice, or develop a new integrated rss aware download application that has BitTorrent built in natively that will help reduce the bandwidth cost.

    Todd..

    Like

  55. Christopher: that was the real Mark Cuban. He told us basically the same thing the other day at lunch.

    Todd: I’m definitely working on an audio-only version.

    Like

  56. Christopher: that was the real Mark Cuban. He told us basically the same thing the other day at lunch.

    Todd: I’m definitely working on an audio-only version.

    Like

  57. anand: the same thing is NOT happening again. Even the “failures” like Kiko sold on eBay for a few hundred thousand dollars. You do realize that represents a pretty sizeable profit, don’t you?

    Like

  58. anand: the same thing is NOT happening again. Even the “failures” like Kiko sold on eBay for a few hundred thousand dollars. You do realize that represents a pretty sizeable profit, don’t you?

    Like

  59. 40. Cuban made a number of points in his post that he didn’t blantantly call out. Scoble, I’m not sure you completely understand the point he was making. Hopefully he explained things to you the way Joe Miller wanted Andrew Beckett to explain things to him

    Like

  60. 40. Cuban made a number of points in his post that he didn’t blantantly call out. Scoble, I’m not sure you completely understand the point he was making. Hopefully he explained things to you the way Joe Miller wanted Andrew Beckett to explain things to him

    Like

  61. @24 Well, hopefully at some point your hubris will start paying for itself. Because I’m guessing most investors would be asking the same questions mdoeff is asking. I mean, afterall, it’s not like you’re producing a major motion picture. We’ve all seen the quality of the videos they are turning out. At the moment it appears you are not getting what you are paying for.

    Like

  62. @24 Well, hopefully at some point your hubris will start paying for itself. Because I’m guessing most investors would be asking the same questions mdoeff is asking. I mean, afterall, it’s not like you’re producing a major motion picture. We’ve all seen the quality of the videos they are turning out. At the moment it appears you are not getting what you are paying for.

    Like

  63. >Scoble, I’m not sure you completely understand the point he was making.

    I understand perfectly, but why don’t you educate me anyway. Seems you like to do that.

    >>We’ve all seen the quality of the videos they are turning out. At the moment it appears you are not getting what you are paying for.

    Really? It’s pretty clear you haven’t watched anything I’ve done lately.

    My show was edited by Ryanne Hodson and Jay Dedman. They, together, have written two videoblogging books and used to work for a TV station and network. And what have you done lately? What makes you an expert on what video editing talent costs?

    Like

  64. >Scoble, I’m not sure you completely understand the point he was making.

    I understand perfectly, but why don’t you educate me anyway. Seems you like to do that.

    >>We’ve all seen the quality of the videos they are turning out. At the moment it appears you are not getting what you are paying for.

    Really? It’s pretty clear you haven’t watched anything I’ve done lately.

    My show was edited by Ryanne Hodson and Jay Dedman. They, together, have written two videoblogging books and used to work for a TV station and network. And what have you done lately? What makes you an expert on what video editing talent costs?

    Like

  65. Robert – I think you are right to look at P2P – the business model challenge you face goes away with this kind of platform. I for one am very pleased to see you distributing humungous vids over the internet instead of the bad quality flash stuff that prevails today. But you can’t argue with that as a business model either… there seems to be quite a few sites that just upload to Google and then embed to make the cost go away AND get the marketing benefit of the Google community e.g. upyourvideo.net. BTW – do trackbacks show up anywhere on your site? I blogged this post today but no trackback I can see… http://www.morle.net/phil/archives/2006/10/scobleizer_wher.html

    Like

  66. Robert – I think you are right to look at P2P – the business model challenge you face goes away with this kind of platform. I for one am very pleased to see you distributing humungous vids over the internet instead of the bad quality flash stuff that prevails today. But you can’t argue with that as a business model either… there seems to be quite a few sites that just upload to Google and then embed to make the cost go away AND get the marketing benefit of the Google community e.g. upyourvideo.net. BTW – do trackbacks show up anywhere on your site? I blogged this post today but no trackback I can see… http://www.morle.net/phil/archives/2006/10/scobleizer_wher.html

    Like

  67. Robert,

    Focus on the content, and then charge whatever you want. If it’s great content, someone will pay.

    I once worked on a newspaper that published once per week and charged more for a classified than the biggest daily charged for a full page.

    It was built on stories no one else could get because they, well, didn’t have the audience…and they didn’t have the audience because they couldn’t get the stories… greatest barrier to entry in the biz.

    You have something others don’t. Access. Use it. Go get those interviews no one else can. Then name your price and someone will pay.

    This advice is worth what you paid.

    Like

  68. Robert,

    Focus on the content, and then charge whatever you want. If it’s great content, someone will pay.

    I once worked on a newspaper that published once per week and charged more for a classified than the biggest daily charged for a full page.

    It was built on stories no one else could get because they, well, didn’t have the audience…and they didn’t have the audience because they couldn’t get the stories… greatest barrier to entry in the biz.

    You have something others don’t. Access. Use it. Go get those interviews no one else can. Then name your price and someone will pay.

    This advice is worth what you paid.

    Like

  69. Think of the viewers: I had trouble looking at your 7 minutes video on Google lobby because not every one on earth has reliable fast internet access. Even if I had one, I don’t have 30, 40 minutes to spare to keep up with just one tech company or one demo. And I think that the challenge of extracting, at editing stage, the 10 important minutes (maximum) is not downgrading your work. On the contrary.

    Like

  70. Think of the viewers: I had trouble looking at your 7 minutes video on Google lobby because not every one on earth has reliable fast internet access. Even if I had one, I don’t have 30, 40 minutes to spare to keep up with just one tech company or one demo. And I think that the challenge of extracting, at editing stage, the 10 important minutes (maximum) is not downgrading your work. On the contrary.

    Like

  71. techbee: I’m hiring an editor who will be tasked with doing stuff like cutting down a long video into something shorter. But, that increases the costs. I can get free bandwidth right now, so it’s easier just to give you the whole video. And, my interviewing style is pretty hard to cut down to 10 minutes. I’d hate to listen to only 10 minutes of Charlie Rose, for instance.

    Like

  72. techbee: I’m hiring an editor who will be tasked with doing stuff like cutting down a long video into something shorter. But, that increases the costs. I can get free bandwidth right now, so it’s easier just to give you the whole video. And, my interviewing style is pretty hard to cut down to 10 minutes. I’d hate to listen to only 10 minutes of Charlie Rose, for instance.

    Like

  73. LayZ: well, seeing that you’re the equivilent of a Walmart flog (you won’t use your real name, nor tell us anything about yourself, you just like being a troll here) you’ll have to excuse me when I say I don’t believe a thing you say. I’ll bet $10 that you don’t really know Charlie Rose, either.

    Like

  74. LayZ: well, seeing that you’re the equivilent of a Walmart flog (you won’t use your real name, nor tell us anything about yourself, you just like being a troll here) you’ll have to excuse me when I say I don’t believe a thing you say. I’ll bet $10 that you don’t really know Charlie Rose, either.

    Like

  75. Verisign has a peer-assisted technology stack from Kontiki that will dramatically reduce your bandwidth costs but provide you with security, pub/sub distribution, and the ability to traverse home network firewalls and NATs. Drop a line if you want more information about it.

    Despite what many of the folks have said here … some of the analyst reports that I have read cite “poor picture quality” as one reason why marketers are not buying more online video advertising.

    I would target a bitrate that would make a typical automobile tv ad look good.

    Like

  76. Verisign has a peer-assisted technology stack from Kontiki that will dramatically reduce your bandwidth costs but provide you with security, pub/sub distribution, and the ability to traverse home network firewalls and NATs. Drop a line if you want more information about it.

    Despite what many of the folks have said here … some of the analyst reports that I have read cite “poor picture quality” as one reason why marketers are not buying more online video advertising.

    I would target a bitrate that would make a typical automobile tv ad look good.

    Like

  77. A couple of things.

    The going rate for a good editor in Toronto is $45 to $50 per hour. (I owned a medium sized post house here for 20+ years.) You pay for the talent you use.

    I’d love the time to be able to watch your rather long videos. I just don’t have it. I do have the time to watch about 10 minutes of Scoble a day. (And I would love to see your “mug” on camera a little more.) And perhaps 20 minutes to listen to you – in the car, transit, whatever.

    I’d be happy to put up with interesting and content appropriate advertising to support the show. (Perhaps a 15 up front and a quality 30-45 at the end.) But at the end of the day, it comes down to time.

    Provide me with high-quality content (love the H264 codec), at reasonable time lengths, with ad content that fits the stories and I’ll be happy to watch the daily Scoble show.

    Oh, and Robert, don’t feed the trolls.

    Like

  78. A couple of things.

    The going rate for a good editor in Toronto is $45 to $50 per hour. (I owned a medium sized post house here for 20+ years.) You pay for the talent you use.

    I’d love the time to be able to watch your rather long videos. I just don’t have it. I do have the time to watch about 10 minutes of Scoble a day. (And I would love to see your “mug” on camera a little more.) And perhaps 20 minutes to listen to you – in the car, transit, whatever.

    I’d be happy to put up with interesting and content appropriate advertising to support the show. (Perhaps a 15 up front and a quality 30-45 at the end.) But at the end of the day, it comes down to time.

    Provide me with high-quality content (love the H264 codec), at reasonable time lengths, with ad content that fits the stories and I’ll be happy to watch the daily Scoble show.

    Oh, and Robert, don’t feed the trolls.

    Like

  79. Bill: will keep that in mind. I’ll try to get a ten minute highlights show done for you. In fact, it’d be good to do one of those pulling from all of PodTech since now we have quite a few good interviewers doing various audio and video shows.

    Like

  80. Bill: will keep that in mind. I’ll try to get a ten minute highlights show done for you. In fact, it’d be good to do one of those pulling from all of PodTech since now we have quite a few good interviewers doing various audio and video shows.

    Like

  81. 1. Apple should be one of your sponsors since you are using their tech in your podcasts.

    2. Where’s your PayPal Donation button?

    Like

  82. 1. Apple should be one of your sponsors since you are using their tech in your podcasts.

    2. Where’s your PayPal Donation button?

    Like

  83. Kenn: thank you for wanting to donate to me. Go and do something nice for someone else and pass it down the chain.

    I’d love to have Apple as a sponsor.

    Like

  84. Kenn: thank you for wanting to donate to me. Go and do something nice for someone else and pass it down the chain.

    I’d love to have Apple as a sponsor.

    Like

  85. P2P technology is the only way to save cost and keep the quality up. It would be nice if there were an automatic P2P application tht once a user clicks on the link they are automatically sharing “the bits” until the download is finished.

    Like

  86. P2P technology is the only way to save cost and keep the quality up. It would be nice if there were an automatic P2P application tht once a user clicks on the link they are automatically sharing “the bits” until the download is finished.

    Like

  87. ET, Kontiki does that:

    http://kontiki.com/technology

    Files are split into 1MB chunks and encrypted and downloaded to peers. As soon as any peer has a chunk they can serve that chunk to another peer. Only peers with the right content owner key get any chunks.

    I think that folks can watch longer duration content if the quality is great and it is a full-screen, lean back, experience.

    Erik

    Like

  88. ET, Kontiki does that:

    http://kontiki.com/technology

    Files are split into 1MB chunks and encrypted and downloaded to peers. As soon as any peer has a chunk they can serve that chunk to another peer. Only peers with the right content owner key get any chunks.

    I think that folks can watch longer duration content if the quality is great and it is a full-screen, lean back, experience.

    Erik

    Like

  89. Perhaps this was already addressed. But what if a entity were to let YouTube host, and their main website would feature links back to YouTube? Would this not eliminate the server costs? I know for many production shops this is not a professional approach, however, for upstart like myself, it does creat an entry point. We are looking to get into producing 5 minute pieces featuring sports realted content. Is it realistic to expect that ad revenue can be generated from this model?

    Like

  90. Perhaps this was already addressed. But what if a entity were to let YouTube host, and their main website would feature links back to YouTube? Would this not eliminate the server costs? I know for many production shops this is not a professional approach, however, for upstart like myself, it does creat an entry point. We are looking to get into producing 5 minute pieces featuring sports realted content. Is it realistic to expect that ad revenue can be generated from this model?

    Like

  91. You’re paying for bandwidth? What’s wrong with this picture…

    I’ve never had to pay for bandwidth charges, even back when my previous show had over 40,000 weekly viewers and each episode was over 50MBs.

    On our current show, we offer about 6 different formats (.mov, .flv, .wmv, .3gp, .m4v, .divx) per episode and since we’re on Blip we don’t have to worry about bandwidth charges. Why not switch hosts?

    Like

  92. You’re paying for bandwidth? What’s wrong with this picture…

    I’ve never had to pay for bandwidth charges, even back when my previous show had over 40,000 weekly viewers and each episode was over 50MBs.

    On our current show, we offer about 6 different formats (.mov, .flv, .wmv, .3gp, .m4v, .divx) per episode and since we’re on Blip we don’t have to worry about bandwidth charges. Why not switch hosts?

    Like

  93. How about a mix model with a few juicedrops of previews and charging micropayments for full content via sms (I heard once that if your think people would not pay a buck for your content, then it may not be worth a buck) plus the current CPM plus product placement or embeded commercials… the mix might work, and I can make you a good deal on the micro payments by sms part in about 11 countries…

    Like

  94. How about a mix model with a few juicedrops of previews and charging micropayments for full content via sms (I heard once that if your think people would not pay a buck for your content, then it may not be worth a buck) plus the current CPM plus product placement or embeded commercials… the mix might work, and I can make you a good deal on the micro payments by sms part in about 11 countries…

    Like

  95. I have a video productiuon facility in south east asia and my cost for shooting, editing and misc is around $120 per hour. This is with state of the art digital cameras and superb editing.

    Like

  96. I have a video productiuon facility in south east asia and my cost for shooting, editing and misc is around $120 per hour. This is with state of the art digital cameras and superb editing.

    Like

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