Own your video – YouTube doesn’t pay

February 3, 2008 by  
Filed under Media, Online, Videos

On a Lost Remote post that gave a not-so-rosy outlook for the future of online video, Steve Safran commented that, rather than there simply being no money in online video, “There is no money in giving away your video and hoping someone else will sell it and make you rich”.

The example suggesting there was little money in online video mentioned Perez Hilton from TMZ, who claims to have only made $5,000 from 25 million video views on YouTube. Safran says Perez could realistically be making $500,000 a month.

Of course Perez isn’t making money off video. He’s hosting it on YouTube. That’s a free service. He doesn’t have control over pre-roll tied with banner ads or any of the tracking that’s required to make advertisers want your product. He’s paying nothing for video hosting, so naturally he’s getting next to nothing in return.

Even at a modest $20 CPM (and this should be $30 – $40), he could be bringing in $500,000 a month in preroll ads. He’s missing out on $6 million in inventory.

Safran is adamant that just because you can’t make much money off YouTube doesn’t mean there is no money to be had in online video.

via Lost Remote TV Blog

So what is it about owning your brand that brings in the advertisers? Safran points out that Perez may not be making as much money as he could because of ownership rights to those videos. When online newspapers do video, the ‘wire’ videos from Reuters and Sky News (in Australia) are generic news items. Often they’re not local, or locally owned.

If you don’t get a lot of views, perhaps its because people are aware they could get that news and video at any other site, since you’ll often see the same ‘wire’ video across competing sites, as you would agency stories across print.

So what will a viewing public repeatedly come back looking for? Trusted local content delivery. By trusted, I mean people are aware that the video they want to see can be found with your media organisation so they will eventually, unprompted, return repeatedly to see what’s new.

In the case of TMZ, this is guaranteed celebrity video, pictures and humiliation that will be regularly updated, and that either can’t be seen anywhere else, or is just easier to find on TMZ because you know it will be there. You can ‘trust’ there will be something there to see.

In the case of local news sites, the only video of interest to your loyal readers or viewers that you can guarantee to always have is – local video. And if you do it well, they keep coming back, just to see if you’ve got the video they trust you’ll have. As local content, you absolutely won’t get the 25 million video views that celebrity clips will get on YouTube, but if you’re getting a large chunk of the local population, that translates into excellent advertising dollars locally.

So I remain a believer in the potential of locally produced online news video, and the market for it. Corey Bergman makes a good point in the post in question, consumers are going to begin demanding more accessible content.

Just vaguely thinking about doing online and mobile content delivery won’t cut it. Our news sites need to be aggressive in developing their own multi-platform content-delivery solutions so that, again, by making themselves the reliable point of content consumption they capture the new market, rather than try to catch up with it.