On Tuesday I attended a panel at SXSW titled “Video Blog Business Models“. The description of the panel — from the SXSW website — was “We have the technology, but where is the money? Learn the newest ideas for pulling revenue from the new world of blogged video content.”
It was moderated by (MOD) Chris Nolan, Editor & Founder of Spot-on.com. (I should note that of all the panels I attended at SXSW, she was by far the best moderator.)
The panelists were:
(AB) Andrew Baron: Producer, rocketboom
(CC) Casey Charvet: Technical Dir, Blastro Inc
(JK) Joshua Kinberg CEO Founder, FireAnt
(CO) Chuck Olsen Founder, Minnesota Stories
(KS) Kevin Sladek, VideoEgg Inc
Note that unless you see quotation marks, these are not exact quotations; this is my synopsis of the event.
[I missed the first two or three minutes of the panel.]
CO: had no business model when asked to be on panel; still doesn’t have one; AdSense doesn’t count as a business model
KS: Josh and I are one side (Casey on our flavor); some of us are video bloggers trying to monetize as best as possible; some are online video providers; like fireant, videoegg; creating services that become ecosystems for other people’s content
MOD: good point; when I look at Chuck’s combination of text and video — don’t want to say multimedia — that’s too “cd-rommy” — one of the things you’re doing is creating good sites that happen to contain video
KS: need to find monetization; video is very expensive; all have that in common; 15 seconds of repurposed television advertising for this kind of topic doesn’t work
CC: I think it does work; and it goes back to KNOWING your audience
MOD: everyone says delivering video is exp
AB: I would say it’s INEXPENSIVE; especially relative to a blog, but in terms of real word it’s negligible
MOD: so you’re talking about compared to TV
AUDIENCE QUESTION: I agree w/ Andrew; my site is free blog; put video in blog for free — if you want to pay for it, it’s $10/mo (unless you’re as popular as rocketboom); nowhere near a TV show
MOD: we understand that; getting socked w/ $5000 server bill…
KS: doesn’t really happen that often; 300000 hits isn’t that big a deal
AB: as value grows, cost grows, but as value grows cost become proportionately less
CC: need to have technology as part of your business model; take technology costs into consideration when you start
KS: you can put text and photos online for free; short-to-mid term, it’s hard to offer video for free; for msn to turn on video across their entire user base… it’s too expensive; need touch point
MOD: explain “touch point”
KS: “ch-ching”! Touch point is cash; key thing we have to figure out
JK: We’re not doing that; fireant is an aggregator; allows you to find and discover video from all over the web; video is going to exist in multitude of different places; biggest challenge isn’t hosting; it’s FINDING video; that’s what we do; we’re an aggregator and that’s why we’re different
MOD: so, what I ask text aggregators is, what are you going to do for me? it’s great, but what are you doing for me?
JK: we do a lot; provide feedback — what do you think most popular channel is on TV? TV guide. that’s a fact. we want to be that. we want to an aggregator of opinions, that’s important market research
MOD: [to AB] You have the ultimate feedback; TiVo asked you to carry the show; can you tell us? think it’s a viable syndication model; I know a lot about TiVo because a friend of mine is one of the co-founders
AB: they came to us; for a while thought about providing content over IP and for a while their boxes have been capable; maybe premature wanting to get ‘net content onto TV; ultimately have promotional value; for both of us; not sure, they’re kinda cagey
MOD: people at TiVo think rss is very interesting; want to deliver content via IP; some of you cannot detail, but as they say in the valley, is there cash in the deal? is it a traffic deal? can you tell us?
AB: what’s interesting is that more than 50% of what you’ve asked is NDA; I’m dying to talk about it, but I can’t.
MOD: Okay, well then… Since the TiVo deal, how has traffic grown?
AB: It’s a very “la-de-da” audience; wealthy movers and shakers
MOD: It should come as no surprise: I have a TiVo. [general laughter]
AB: It’s a growing scenario… first thing TiVo came to rocketboom saying let’s start and grow; no promotion, just kinda happened
MOD: TiVo hasn’t been promoting
AB: they owe us; monetary and promotionally
MOD: a lot of times deals like this are traffic only; Kevin: want to ask question; trying to get at investment environment; people who understand technology don’t always understand money and vice versa — you’re a tool company, do you see ROI changing?
KS: one of our mantras is that we’re “not just a tool”, so we cringe when you say that; this is part of the great coming together and the mixing and point of SXSW; silicon valley opposite of san fernando valley; they are opposites; Los Angeles doesn’t understand rss!
MOD: LA only wants flash [meaning “style and glamour”, not “MacroMedia Flash”]
KS: just talking about public sponsorship of this kinda media; maybe NY or MINN is better
MOD: garrison keillor; minn does this kinda stuff — they’re very avante garde
CO: every non-profit in the Twin Cities loves Minn Stories; get it immediately; see benefit; only helps me; plus they’re potential advertisers
KS: media is a great public good; have to add advertising before there’s rivalry
JK: vastly changing; talking about monetizing media but that’s different from flat spectrum of media
MOD: what do you mean by new kind of media?
JK: up until now we have movies and TV only ; genres going to be made — like rb — is not TV and not movie; fits no formats or conventions; sometimes news, sometimes not news; only thing regular about it is that it’s roughly 3 minutes
CC: The perfect time for net content!
JK: absolutely! if I’m not a professional editor then it’s easier to edit/record, etc shorter content on consumer device; scale changing; flattening; some stuff can be monetized, some can’t; may be other ways to make money; we look at it different way in terms of aggregate usage
MOD: subscription downloads don’t work; everyone agree?
All: No!
AB: Could go either way …
CC: iTunes maybe; haven’t heard financial report about video on iTunes
JK: Apple says they’re good
CC: but these are pieces of content with an extremely high production cost; plus devices now that make it work better; few years ago when we were working, decided subscription model not the way to go; why we’re still around
MOD: when you started in 2000, audience was much smaller; grown tremendously
JK: another place where subscription works is porn
CC: except for where people take their clothes off, it doesn’t work
MOD: people will pay for something they love
AB: some WWF wrestler got kicked out of the federation because he has… he is an idol for little kids; 40k kids are his audience; does a video once a month and kids’ parents pay $7/mo to access the site — 40k * $7
MOD: “Hot or Not” is something like that
JK: people pay for digital goods; avatars, digital swords
MOD: so is it just marketing?
KS: we’re talking about them if they’re the same, but they’re not. “LOST” of course, people will pay for and The Sopranos; subscription isn’t so compelling, but if you look at content, people want advantage and to get content for free; video blogs are different; unless you’re a pro wrestler, not many individuals are going to produce something that *I* want to see — unless it was something like Austin BBQ
JK: unless they could FIND that stuff
KS: sure
JK: we’re not doing it that great, but we’ll get better
MOD: in content/video you talk about prod value:cost; in paper/print we talk about journalism; people pay for those services
KS: but you do end up looking like mainstream
AUDIENCE QUESTION: [halcyon] I’m making money off a lot of videos; especially my porn sites; do video blogs w/ girlfriend and dog; get free stuff all the time; get consulting work; you’re not going to make money; you might be good enough that someone says do some come work for me
AB: I disagree, but opportunity is there for…
AUDIENCE QUESTION: [halcyon] it’s like PPV; syndication model
MOD: okay, so it’s a combination
AUDIENCE QUESTION: how do you see sponsored blogs? like, ford or Budweiser sponsors blog? what about mobile?
MOD: we’ll talk about mobile 2nd
CC: difficult to talk to large companies directly; have to go through agencies; the agencies are stupid; not saying it’s not going to get there, but we preached streaming ads for years
MOD: how long?
CC: 3 yrs
MOD: easier now though; last year especially
AB: in near future, symbiotic relationships between products and sponsors will be more commonplace; you play tennis and make a tennis video blog, Wilson will sponsor; and audience wants to know about tennis racquets anyway
MOD: same as original TV ads
CO: approached by people that want you to create promotional materials; need to maintain objectivity; artistic integrity, not sell out
MOD: interesting point; a lot of you have editorial models — what you’re going to say; business model handled by different people
KS: remarkable opportunity to do things differently; Gillette sponsored Fight Night way back in beginning; trick, what we can do is present audience with minimally intrusive value property and if they are we can let them dive deep into tennis world as they want; not leveraging as much as we could be; good way to make cash register ring
AUDIENCE QUESTION: in response to halcyon, an important thing the last year I made living not directly from video blog, but from side business
JK: you’re going to see Wilson produce their own content
KS: if you do tennis blog, build an Amazon store
CO: my cat has a video blog: mookie.tv [?]; my girlfriend and I have certain cat food and toys that we love and want to promote
MOD: and it’s also important to your community
AUDIENCE QUESTION: rb is blending advertising and function together
MOD: that was my next question!
AB: we decided that there’s a lot about advertising we don’t like; so we accidentally stumbled upon a model that was a good idea and that we’re still continuing to pursue that; had no luck so we had an eBay auction, and moment auction was closed we had a list of other bidders so we attacked them; TRM wants to sell ATMs; we had complete creative control; put advertising at the end; much more valuable; advertiser wants ad at beginning; we say no, we’ll take that hit and put it at the end because that maintains integrity; audience comes to us because they trust us
AUDIENCE QUESTION: panel does what they do very well; I watch rb all the time, but Amanda is the brand; until there are advertising executives watching, how do you know? you haven’t tried it; people let NBC etc do it, they’ll let you do it
MOD: we’re still early
AUDIENCE QUESTION: having ads all through program is only allowed because it’s happened my whole life; I’m used to it
MOD: Kevin’s point about it as a “new mix” is valid
AUDIENCE QUESTION: very early; NBC, etc already HAS audience; we should be concentrating on bringing eyeballs; focus on making best possible content
AUDIENCE QUESTION: advertisers buy brands; until you have a brand that carries weight, you’re not going to get advertisers
JK: yes, true, but it’s different in online space; advertisers buy Google ads, and don’t know where they’re placed
AUDIENCE QUESTION: I disagree; 39 million downloads/mo
JK: but the distribution model’s different
AB: [says something about bad carpet in a small apt; I didn’t really understand.]
AUDIENCE QUESTION: if you’re going to establish a brand, need to establish that it’s not neutral, that it has credibility and independent credibility; my video blog is non profit — science and tech issues — no reason to break out of that model
MOD: how do you build a brand? consistency is part, but… how?
AB: kinda issue I was just saying… I don’t know… it just kinda happened to us
MOD: you do it by offering very specific content for a specific audience
CC: flawless user experience; no broken links; nothing ever down; if ad is slow, we’ll pull it; if you start impacting user experience, you’ll kill the brand
AB: definitely
CC: KNOW your audience; specific groups; know them well
CO: experience is the word; partially visual and partially content; rb is so simple; minn stories is diverse, but people feel… independent
KS: very good points on how to present brand; for us it’s more an experience of listening than talking; figuring out who we are, listening to corporate culture and expressing that; hard, we went from 3 founders to 12; a lot more scrutiny; be genuine and forthright is tricky when constituency is large and diverse
JK: participate; work with people you want to connect with; make product better, help people that you are promoting improve their product
AB: I agree with everything you’re saying, but we got lucky
MOD: that may be secret
AUDIENCE QUESTION: [talks about coca cola book about branding]
AUDIENCE QUESTION: how did rb get on CSI?
Amanda Congdon (in audience): they emailed me
AB: I had no idea CSI was so big
AUDIENCE QUESTION: any Greek cruises in the plan?
AB: AC and I are interested in international aspect of it; continuing on so many ideas; rb.jp just came out
AUDIENCE QUESTION: [from Microsoft guy] that’s why I have my phone # on my blog
MOD: that’s product placement!
AUDIENCE QUESTION: [comments about ads at beginning or Amanda as brand] they could put ads at begin and not lose brand; they could do all sorts of things, but what’s cool is that they thought “what our users want”, integrity, traditional advertising on eBay; rb cares about internet culture
AUDIENCE QUESTION: are you worried about not putting ads on the front because you might lose viewers?
AB: it matters to us; there’s “rb reveals all panel” this afternoon and we’ll talk about it then
AUDIENCE QUESTION: how do I find provider to host that?
CC: lots of different ways; lots of people here at SXSW that can show you; we did it ourselves; absolutely possible to do it yourself and have a viable business model
AB: you could hire a college student to do it
CC: don’t be afraid
AUDIENCE QUESTION: is regularity important?
JK: consistency is WAY important
AUDIENCE QUESTION: when you started, what was most important thing?
JK: video blogs are about people
KS: adapt as necessary but never quit
CO: every cat deserves to have a voice
CC: throw out earlier plans, don’t be afraid to get in over your head
AB: time is of the essence