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.
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.
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.
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.
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.
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.
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.
And a highlights show would probably draw me into watching some of the longer shows – forcing me to make time to watch those shows that have piqued my interest.
And a highlights show would probably draw me into watching some of the longer shows – forcing me to make time to watch those shows that have piqued my interest.
1. Apple should be one of your sponsors since you are using their tech in your podcasts.
2. Where’s your PayPal Donation button?
1. Apple should be one of your sponsors since you are using their tech in your podcasts.
2. Where’s your PayPal Donation button?
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.
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.
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.
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.
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
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
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?
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?
[...] Paul Colligan takes a look at the economics of videoblogging in response to Scoble’s post on the same issue. [...]
[...] Another interesting factor that caught my attention was that as the focus shifts from YouTube quality to ScobleShow quality, the barriers to entry are considerably increased thereby putting the brakes on just about “anybody” creating content. Check out this recent Scoble post where he calculates the high-cost of creating video content and you’ll see what a barrier to entry that could be for wannabe amateur videocasters. (News Source: Yahoo! News, BusinessWeek) [...]
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?
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?
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wow :-O
i got a free razr from this website and thought i would share
i got a free razr from this website and thought i would share
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…
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…
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.
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.
One super excellent portal with online media is http://www.mediaplanetaria.com.
They have thousands of online tv, radio, newspapers, etc
One super excellent portal with online media is http://www.mediaplanetaria.com.
They have thousands of online tv, radio, newspapers, etc
[...] then the bandwidth. And you haven’t even started paying for my camera, my new Mac.” — Robert Scoble, vice president, media development, PodTech (Btw, Scoble is also the author of Naked [...]
if you put together a network of these video blogs, aren’t you simply losing more money faster?
if you put together a network of these video blogs, aren’t you simply losing more money faster?
Fred: the thing is you’re only looking at the costs of the business. I’ve been able to sell advertising to cover the costs of many of our shows.
Fred: the thing is you’re only looking at the costs of the business. I’ve been able to sell advertising to cover the costs of many of our shows.
If you are looking on information on how to produce your own instructional videos, a company called Studio 1 Productions has a FREE PDF book that you can download. Here is the link: http://www.studio1productions.com/sivkit.htm
If you are looking on information on how to produce your own instructional videos, a company called Studio 1 Productions has a FREE PDF book that you can download. Here is the link: http://www.studio1productions.com/sivkit.htm
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i want this