How To Make Money Video

Editor’s note: This is the fourth in a series of posts by guest writer Ashkan Karbasfrooshan.Previously, he wrote about the State of Making Money & Web Video, 12 Surprising Things Holding Back Online Video Advertising, and Context is King: How Videos Are Found And Consumed Online. In part 4 today, he examines where he thinks the sweet spot is for making money in onljne video. Karbasfrooshan is the founder and CEO of WatchMojo.

In Search of Profits

Ten years ago, web companies didn’t generate much revenue. These days, web companies are some of the most profitable around. Online video is where the Web was ten years ago: in investment mode as video companies that are generating high revenue are not necessarily the most profitable.

Are those companies suffering low margins because they’re investing in the future or are they fundamentally lower-margin businesses?

Ad Networks Are Low Margin Businesses

This week, video ad network Brightroll raised $10 million from Scale Venture Partners. Ad networks aggregate audiences and sell ads to marketers, sharing the proceeds with publishers/producers. Scale’s Rob Theis’ argues: “the most strategic Internet investments are those that compete not with other Internet businesses, but with the much larger amount of money still being spent offline.”

Brightroll’s CEO Tod Sacerdoti added: “I think by this time next year the majority of the top five to ten video properties by any measure will be aggregator networks. The best example for this is display advertising.” Indeed, networks have an unmatched ability to scale but can also crash to the ground awfully fast.

The low margin is the least of their problems; differentiation and defensibility are. Blue Lithium and Right Media hit jackpots by selling to Yahoo! But those who didn’t sell (Tribal Fusion, Valueclick) suddenly found themselves under pressure from search advertising on performance and video on branding.

Content Networks Have Little Differentiation

Similarly, aggregators gather videos from content providers, sharing ad revenues. iFilm (sold to Viacom, renamed Spike), Guba, Grouper (sold to SONY, renamed Crackle), Revver, YouTube (sold to Google), Veoh, DailyMotion, Metacafe, Viddler, blip.tv, are all vying for content, audiences and dollars.

YouTube is master of this domain. Hulu is giving YouTube a run for its money, but the business model is anything but certain and its long term exit strategy is murky (Disney, News Corp. and NBC Universal/Comcast are shareholders but also competitors).

Ultimately, ad and content networks operate in a high-risk, winner-take-all game. For publishers, it’s a lower risk world. Consider the two acquisitions News Corp. made in 2005: Rupert Murdoch paid more for IGN ($650M) than for MySpace ($580 million), but MySpace’s subsequent growth made him look like a genius (for a while). Today, MySpace is searching for its raison d’etre while IGN treks along as an unstoppable force in its sphere.

The Myth of Hyper Distribution?

In online video, producers are agnostic to distribution channel or platform. To reduce risk, they diversify distribution, but the jury’s out on whether hyper distribution bears fruit. Hyper distribution refers to syndicating one’s content as broadly as possible with little or no restrictions.

When it comes to generating revenues, is hyper-distribution wise? Not according to Chris Pirillo, a prosumer video producer who leverages video to promote his empire but only counts YouTube as a commercial platform: “YouTube offers the largest audiences and generates most the revenue. If you’re not YouTube, you have challenges in creating value for content producers”. If that changes, look out for Freewheel, which according to CEO Doug Knopper allows “media companies and content owners to be able to monetize their video libraries across multiple channels and devices”.

Advertisers Follow Audiences…

Ex-Disney CEO Michael Eisner doesn’t pretend to know how the industry is going to play out, but he’s got no doubts what the end result will be: “I don’t know if the growth in content made for the Internet will be evolutionary or revolutionary, but it can’t not happen: a death march has been going on for other media who are in trouble because there is a more efficient way to share content around the world with the Internet.”

Business Models Take Time to Develop

Eisner made his fortune in television. One VC who’s made his online has another opinion. In Fred Wilson’s influential 2005 post “The Future of Media (aka Please Take My RSS Feed)”, he suggests to:

1 – Microchunk it – Reduce the content to its simplest form.
2 – Free it – Put it out there without walls around it or strings on it.
3 – Syndicate it – Let anyone take it and run with it.
4 – Monetize it – Put the monetization and tracking systems into the microchunk.

In theory, in the future when video streams monetize the way search queries have (whereby a search query is always associated with some kind of paid listing) then perhaps Wilson’s thesis will prove right. But in practice, at least in the five years that have passed since the post, it’s been a recipe for financial disaster.

Hyper distribution is great for promotional purposes but not necessarily for commercial purposes. Marketers do pay more attention as an audience grows, but they also pay a premium for scarcity and exclusivity.

This is the fundamental conundrum facing new media producers who rely on hyper-distribution to build brands and audiences but who weaken their pricing power and ability to secure guaranteed dollars by giving away their videos. This can work if you can build ad-supported businesses, but that takes time and money.

Today, a few new media producers have managed to build ad-supported businesses, namely Revision3 and Next New Networks. But between the two, they have raised over $30 million in venture capital. Most producers don’t have that luxury. For those others, I recommend creating content that other media companies will pay for, to buy them enough time to build a syndication business and eventually, a fully ad-supported business which commands the large ad dollars.

An imperfect but useful analogy I use is the banking model, where retail, corporate and investment banking fees can create a large business.

This diversified strategy provides:

* a safe income stream: licensing, like retail banking, provides a recurring and non-volatile revenue base.
* a growth business: syndication, like corporate banking, requires other companies in the ecosystem to do well. This can provide higher CPM rates by placing content in the right context.
* a wildly lucrative stream: advertising, like investment banking, takes time to develop, is speculative and seasonal, and risks drying up abruptly. Notice how advertising revenue spikes each fourth quarter, for example.

The reason why I place content producers in the highest Profitability circle over time in the first chart above is because only they can build such a business. (The Profitability Index represented in the chart takes into account operating margins and total return on investment, including likelihood of a liquidity event). And, yes, I am completely biased, since this is the kind of business I am trying to build with WatchMojo. Aggregators and networks are solely advertising based businesses; just ask YouTube who generated $10,000 in a paid model test, even though it can generate billions in simpler ways. Video advertising will be a bigger business, but not necessarily a higher-margin business.

Video will be Everywhere: on all Websites

Video on the Web is no longer just about entertainment. It is also about marketing, instruction, and conveying information of all kinds.

* Content bellwether Wikipedia announced it will be rolling out videos soon enough.
* e-Commerce leader Zappos encourages users to submit their video experiences which increase sales 6% to 30%. In 2010, it will create 50,000 videos.
* It won’t be long before organizations feature their accountants, lawyers, management, VCs in videos too.

Video will be Everywhere: in Ads

Videos won’t simply be on all websites; video ads will converge with rich media and display banners. Publishers and ad networks will swap out low yield ad placements for videos that sell at a premium. Rupert Murdoch is right to say that there isn’t enough advertising to make all publishing online profitable, but if you insert a video-enabled ad where a display banner exists today, maybe it will become more profitable, as video rates tend to generate a tenfold premium over display banners. Of course, the flip side of that argument is that if video ad inventory lost all scarcity as display banners have, then it rates would also see a steep drop.

Video is the Anti-Search

Google’s dominance of the Web today stems from a perfect storm. Search benefitted from low expectations. Whereas Google’s competitors threw in the towel to focus on portaldom (or outright handed them the business), online video companies’ war chests seemingly have no bottom as they wage the war for the online audience.

With YouTube being a unit of Google, it’s hard to compete being a pure video aggregator. Those who have tried are flailing badly. Yet video’s expectations have always been high and will only get higher.

History Repeats Itself

Video will follow search in two ways though.

Search is software and Google is the only successful ad-supported technology company. Video is media, which has a natural disposition to embrace ad-supported models. As such, advertising will monetize video streams. In fact, as large ad agencies and marketers shift online, they’ll embrace branding campaigns and push video advertising could eventually top search advertising. Once that starts, online advertising will surpass television, it’s already happened in the UK.

Search for The Leading Ad Format

Everyone agrees that video advertising will be huge but what will the prevailing ad format be?

Stakeholders are obsessed with finding the ad format likely to follow television’s 30-second ad spot and search’s paid listings.

What might lead the way?

Pre-rolls are the equivalent of pop-ups (and mid/post rolls the equivalent of pop-unders) in that users hate them, but unlike pop-ups, I actually think pre-rolls won’t disappear, mainly because

* They’re the most in-demand ad format (according to Brightroll CEO Tod Sacerdoti)
* It is easier to include a pre-roll when you’re syndicating to other websites and platforms (says blip.tv co-founder Dina Kaplan)
* But largely because they’ll get more user-friendly: the 30-second ad will make way for 5-10 second interactive pre-rolls (SpotXchange CEO Michael Shehan).

However, there will always be properties which will forego pre-roll revenue to improve the user experience in order to build audiences, and all else being equal users will migrate to those sites. So I’m not sure the pre-roll will remain all that ubiquitous. The other problem with pre-rolls is lack of attention. When a pre-roll starts, I tune out and look for my headphones or go grab a coffee.

That’s why I like the contextual display banner (and not necessarily the companion banner). A companion banner comes bundled with the video pre-roll, but sits alongside the video A contextual banner comes without the pre-roll. Whereas most banners disappear quickly next to text with one downward scroll of the mouse, alongside a video player, that banner becomes quite valuable and top-of-mind since people are just staring at the video.

We’ve also seen the rise (and fall) of overlays, which is basically an expanded Picture-in-Picture (PIP) format; we know how that fared.

Of course, content producers are also salivating over branded content (more than product integration and product placement, the brand becomes central to the story) or outright sponsorships.

Finally, there’s the Web’s favorite offspring: the viral video. Viral video is not an ad format, of course, but it is not quite branded content nor is it supported by ads. As these become more common, achieving success with content alone becomes a sure-fire recipe for failure. All content will need to be supported by a media buy or some kind of promotional push. After all, on TV you spend millions creating an ad but you need to buy media spots to promote it. It’s not going to be that different online. Yes, it’s a meritocracy, but it’s a loud, cluttered one.

Genre Complete Videos

A portrait is a painting, photograph, Genre Videos sculpture, or other artistic representation of a person, in which the face and its expression is predominant. The intent is to display the likeness, personality, and even the mood of the person. For this reason, in photography a portrait is generally not a snapshot, but a composed image of a person in a still position. A portrait often shows a person looking directly at the painter or photographer, in order to most successfully engage the subject with the viewer.

Painting the Head in One Sitting I ("Tom")
This video demonstrates step-by-step the procedure for achieving a thorough, satisfying portrait likeness in a single sitting. Beginning with a simple drawing made directly on the canvas with the brush, the artist shows and describes the creative steps: stating the shadows, the halftones and the lights... achieving the "mosaic of tones"... restating and refining... "particularizing" the portrait with detail. 90 minutes.

Painting the Head in One Sitting II ("Tessa")
John Howard Sanden shows you, step-by-step, how to achieve a satisfying portrait likeness in a single painting session. Nearly two hours in length and based on Mr. Sanden's recent book Portraits From Life in 29 Steps, this video describes in detail everything you need to know to paint a convincing portrait in oils.
Proceeding with a simple drawing made with the brush on an untoned canvas, the artist proceeds in a logical and direct manner, painting the dark tones first, then the halftone passages, and finally the lights and highlights, with a continuous commentary on color-mixtures, brushwork, tonal values, blending and other important elements of oil technique. Then Sanden shows how to refine the details of the features, pulling together the elements of a successful portrait in oils.

Painting the Head in One Sitting III ("Pam")
Our latest release is number three in our popular series, Painting the Head in One Sitting. This program varies from the other two in that the presentation is specifically arranged to illustrate the 29-step method featured in Mr. Sanden's book Portraits From Life in 29 Steps (North Light Books, 1999). Like the other two, this video takes the viewer step-by-step through the painting of a head-and-shoulders portrait, this time specifically enumerating the 29 steps featured in the book.
The 29 steps are divided into six sections: (1) The Layout, or preliminary drawing, (2) The Shadows, (3) The Halftones, (4) The Lights, (5) Restating, in which the artist refreshes and improves on previous judgements, and (6) Particularizing, in which the precise details of the facial features are painted.

This division of the job at hand into six manageable portions, which in turn are completed through several precise steps (it may sound complicated, but it's really quite simple) gives the painter a logical plan of accomplishment. .

Color Mixing for Portraiture
John Howard Sanden explains and demonstrates his popular Pro Mix Color System, used by professional portrait artists everywhere for over twenty years. You will learn how to mix an endless variety of subtle, delicate flesh tones by combining only two colors! How to mix 78 basic flesh tones and be able to repeat the mixtures again and again, exactly! 90 minutes. exactly! 90 minutes.

Light and Shade in Portraiture
The precise judging of tonal values provides the underlying structure of a portrait. No other factor is more important to the portrait's success. This video explains the bases on which these critical judgments are made... the six kinds of tone... the nine-tone value scale... "reading" values... making a tonal study of simple objects... making a tonal study of complex objects... Relationship of light and shade in portraiture. 90 minutes.

Painting the Facial Features
This lecture-demonstration was presented annually for twenty-three years at the Art Students League of New York, and is always a popular favorite. Mr. Sanden paints an enlarged close-up of the facial features, describing the elements of construction and drawing, color mixing and value determination. 90 minutes.

Painting Hands
Next to the head itself, nothing is more important to the success of a portrait than the painting of hands. This helpful video stresses careful observation... how to simplify... understanding the light and shade... stressing the individual character of the hands... examples from professional assignments. 90 minutes.

John Singer Sargent's Lady Agnew
John Singer Sargent's brilliant 1892 masterpiece. Lady Agnew, is the subject of this three-hour video demonstration. The album consists of two 90-minute video cassettes. In the first program, Mr. Sanden paints the head, and in the second program, the hands, arms, garments, the background, including the chair and accessories. Includes reprint: John Singer Sargent: His Technical Procedure. 2-cassette album. 3 hours of instruction.

John Singer Sargent's Head of an Arab
In 1891, John Singer Sargent traveled to the Holy Land and the Middle East to gain background material for his Boston Public Library murals. This dramatic head of a bearded man in Arab headress resulted from that trip. John Howard Sanden replicates Sargent's brilliant masterpiece, with a continuous commentary. Sargent clearly reveled in achieving the rich bronze tones of the swarthy complexion, the deep shadows which give volume to the head, the fierce intensity of the expression, and the broadly realized turban and garment details. 90 minutes.

New Video Start-Up Joost

Janus Friis and Niklas Zennstrom, the duo that brought the world Skype and Kazaa, have chosen the name 'Joost video' for their new online-video start-up. The name has no meaning in Danish, it was simply chosen because it had a nice ring to it. Originally referred to as "The Venice Project", Joost will offer studios, cable stations and anyone else who wants to distribute high-quality video over the Internet, a fast, efficient and cheap distribution method.

Just like with Skype and Kazaa, the concept will come to life via peer-to-peer technology. Nevertheless, Joost will have to compete with many video-distribution platforms, including the fashionable YouTube and iTunes. San Francisco-based BitTorrent is in direct competition with Joost since it is a peer-to-peer technology and is attempting to license technology to Internet video companies. Yet even more competition comes from the growing number of websites offering top cable and movie channels without permission. The main problem, however, is not competition: Joost has yet to sign any deals with top film or TV producers. Will Joost be unique enough to be as successful as Skype and Kazaa?

Joost replicates the TV-viewing experience better than many of the other companies. Joost's nifty technology may be enough to sway the entertainment industry. A menu allows users to switch channels with the click of a link. Just like with Tivo, users will also be able to access offered content regardless of the time of day. Moving forward and backward within a show is also possible. How will the Joost support itself? Advertising. The Luxembourg-based company will have Internet ads that behave just TV commercials. "These are the kind of ads that the TV industry and viewers understand," Joost CEO Fredrik de Wahl said.

Free Hulu movies and TV shows could hit the iPad

Remember how an unnamed entertainment industry exec allegedly said last summer that Apple’s tablet will be “fabulous” for watching movies? Surprising then how Steve Jobs announced no new content deals at the iPad unveiling, leaving many folks scratching their head.

According to TechCrunch, the lack of Flash player on the iPad doesn’t have to mean that users will get movies and TV shows exclusively via Apple’s iTunes. The publication wrote Tuesday that Hulu video, the second-largest video library on the Internet, is developing a workaround solution that should unleash the vast catalog of movies and TV shows on the iPad outside the Flash-based Hulu.com site. An industry insider alleged to Eric Schonfeld, the author of the report, that Hulu is working on an iPad-friendly version of its site that should be ready by the time the iPad hits the market late March.

This potentially killer move would bypass Apple’s entertainment ecosystem entirely and Apple may be unable to do anything about it. Hulu has been encoding its videos in H.264 since the summer 2008. Because the Flash player supports H.264 out-of-the-box, the Hulu.com backend needn’t be changed. The site still serves both Flash- and H.264-encoded videos through the Flash player. Schonfeld explained how Hulu might serve its existing H.264-encoded video library to the iPad:

They could build a custom iPad/iPhone app with its own player, or rewrite the site in Javascript for the iPad/iPhone browser.

Read more at TechCrunch
Christian’s Opinion

The H.264 trick helped Apple put YouTube videos on the iPhone even though the handset still doesn’t support Flash. When the original iPhone had been announced three years ago, Steve Jobs had cut a deal with Google that saw the search firm re-encode the entire YouTube video library in H.264. When you tap inline YouTube videos in mobile Safari on your iPhone, the YouTube app retrieves a H.264 version off Google’s servers. Encouarged by that experiment, Google fully embraced H.264 on the YouTube backend. When Adobe updated the Flash player with H.264 support, YouTube began encoding all video uploads in H.264 due to its bandwidth-savvy nature and superior quality.

The search firm is now experimenting with a HTML5-based YouTube player that needs no browser plugin in order to stream the videos – a tell tale sign that YouTube could abandon Flash technology and take the HTML5 route. When that comes to be, rival video sharing sites are likely to follow suit. As a result, all those videos encoded with Flash Video codec will be viewable on the iPhone and iPad because mobile and desktop Safari support the latest HTML5 specification. Meanwhile, Apple probably has no interest in helping Hulu put its free movies and TV shows on the iPad. Who in their right mind would buy or rent TV shows on iTunes – even at 99 cents per episode – if they’ll be a tap away on Hulu.com, free of charge in exchange for a few ads?

SingPost's viral video

Like flash mobs and street art, viral videos are notoriously hard to control. But the marketing potential is worth every cent if it's pulled off successfully. Just look at the amount of Publicity Video generated from the Raffles Place Ghost hoax of 2008. But when a masked man starts spray-painting mailboxes at crowded areas of Singapore, concerned citizens did what they do best -- they called the police.

That's when this box mayhem was revealed as an endeavor by SingPost to drum up publicity as a sponsor for the upcoming Youth Olympic Games. The personnel are obviously not happy about it. According to the Straits Times, a personnel representative said that they will be attractive the matter up with SingPost as this whole episode has caused unnecessary open alarm and wasted valuable resources. SingPost had earlier sent an e-mail query to the personnel about the need for a permit for a possible advertising event. It, however, did not provide us the full picture and details of the publicity stunt, the company stated.

The stunt's backfiring was difficult enough that SingPost chief executive Wilson Tan came out to say, I would same to again apologize for any inconvenience caused to all parties. There's no real harm though, and people seem more amused by it than alarmed, judging from the online responses.

ZeroTownCouncil commented on the ST article that SingPost paid S$15,000 to ruin three3 mailboxes, that works out to S$5k per mailbox. Since when did mischief become so profitable? SingPost must capitalise on this 'silly' nonachievement and recoup the money by selling mini ornamentation coin mailbox.

But the clincher for us was from HOONANINATOR who posted on the YouTube video above that Inkman, I admire your piece of work and you are indeed talented in art. As an prowess student myself, I see that sometimes you have the urge to express your prowess through doing things same this. However, you can decorate on a box which you own instead of doing it on open mailboxes which are not your property. Anway, what's done cannot be undone. Hope you get inactive soon, and then you can paint the prison walls all you want.

Firecracker Wake up Prank!

“Funny Video” Fire cracker Wake up Prank video! Drew gives Matt quite the funny wake up call with this firecracker wakeup funny prank video. Background penalization by Kevin MacLeod at incompetech .com … “funny video” “Funny Video” “funny pranks” “funny prank” “funny videos” firecracker wake up prank pranked pranks funny

Anime Video

Wouldn’t it be great if there was some Wii friendly copal sites out there that enabled Wii users to check and stream copal on their Anime Video? Well there is! WiiterNet has added three copal sites to it’s directory a while ago that has been tested to work on the Wii’s updated Internet Channel. Granted, they are technically not Wii friendly, but they are compatible on the Wii’s scheme browser.

Anime Boy

animeboy.org is a liberated online copal moving place that shows the most popular animes today such as Naruto: Shippuuden, Bleach, Vampire Knight – Guilty, One Piece (301 and on), and tons more. The place is constantly being updated with newborn episodes and animes. It’s copal list is devided into two sections, the left side is liberated while the other is for members who donated to the site. Therefore, animes same Death Note, One Piece (1 to 300), Yu-Gi-Oh!, etc isn’t reachable unless a gift is made. The copal shows are subbed, which may make it a little difficult if watching on a small TV screen on the Internet Channel. Still, this is one of the best sites to enjoy your favorite copal shows on your Wii’s Internet Channel.

Funimation Channel

The Funimation Channel is a 24-hour copal network, however it is also a place to check liberated copal trailers for upcoming newborn animes, which works well on the Internet Channel. You won’t be able to check full copal episodes here though, but you crapper check out the previews of newborn ones.

WarpToLevel7

WarpToLevel7 (formerly RAWRanime) is an online moving copal place with nearly every copal show available to watch. The video players arrange from MySpace, Megavideo (the most ordinary it seems), Hulu, Dailymotion, Google Videos, and more. The problem for Wii users though is that many of the videos there plays on Megavideo, which does not work on the Internet Channel. Although most videos will likely not play, there are a some of them that will. It takes time to explore, so this isn’t the best place to check copal on the Wii. Still, with it’s huge list of copal sites, there’s going to be something for everyone.

Hope this small list helps for Wii users. If anyone knows of any other copal sites that works on the Wii, just drop a comment here. You crapper also find more video playing sites here on WiiterNet’s directory. Enjoy!