Thursday, November 06, 2008


For a while now I've been searching far and wide for any kind of data that shows whether or not the monetization of video online, particularly by independent producers, is a sustainable and scalable business, but much to my chagrin it's been hard to come by. I guess it shouldn't be much of a surprise since the reality is that there really isn't any data out there that is compelling enough to make us all believers in this business.

Sure - there's a ton of information out there about traffic, video views, engagment, etc. - but that's all window dressing for the most part. What I want to know is pretty simple -- how is making money and how much.

I recently got some good intel from a small company (who shall remain nameless) that proclaims itself as one of the largest and most popular online video producers. In business for a little over 2 years with a total investment of about $1 million, this company recently surpassed 30 million videos served -- a great accomplishment to be sure. When asked how much revenue these 30+ million videos have generated, the answer was . . . . $500,000. This revenue has been generated through a combination of ad sales on its own site(s), rev share deals with its syndication partners and licensing deals with third parties who pay for access to this company's video library.

Doing the back-of-the-napkin math, and ignoring the licensing apsect of their business, the unofficial eCPM here is $15. And knowing how lean this company runs (including not having a fully built out internal sales force), this is a respectable accomplishment. But looking at it another way, the revenue does seem like a drop in the bucket when compared to the enormous volume of video views that have been generated. Also, the reality with this company is that the lion's share of their revenue to date is generated from the licensing side of their business, as they say that they're only now starting to generate revenue from advertising, and the CPM's on that side of the equation are "in the single digits."

So the question is -- is it possible to be wildly successful as an independent producer of online video content?

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