How Not to Worry and Make Money with Web Video

That's the big question isn't it?

I know I get asked "How do I make money at a web series (or book, or whatever)?" and I just have to say that being patient is helpful...

Making a great product is helpful...

And keeping an eye on those people who have done it and are experimenting with you is helpful.

From Video Business:

Next month at Comic-Con, Walt Disney Studios Home Entertainment will launch its first original Web series, Time Jumper, a graphic novel series produced with legend Stan Lee. But unlike many other original Web series, which up to now have been streamed with ads online, WDSHE will sell Time Jumper as a download on iTunes and in 2010 on DVD.

The studio is one of a number of companies testing new release strategies for original Web series that don’t rely on falling online advertising revenue as they try to make Web shows profitable.

And of particular note (emphasis mine)

Big Fantastic, producer of 2007 Web hit Prom Queen, has been in the business probably the longest and has tried every type of business model, but Chris Hampel, one of the four guys who run the company, said producers are still trying to figure out the best monetization model.

Big Fantastic made its first two series, Sam Has 7 Friends and Prom Queen, for $50,000 each. They got picked up for distribution by Michael Eisner’s Vuguru, which re-packaged Prom Queen and sold it to foreign markets, helping to finance a second season of the show. The show also got a DVD release, but Hampel said residuals are minimal.

In Japan, the series took off as a mobile series and has even been remade. In the U.S., Prom Queen plays on the Verizon Vcast network, but mobile hasn’t taken off, he said.

Their deal with Eisner has pushed budgets on their latest shows up to the $500,000 to $1 million range, though profits are still small, “nothing that would upgrade our cars and girlfriends,” Hampel said.

and here:

“Fiction is expensive; it’s hard to do well,” Revision3 CEO Jim Louderback said of Revision3’s reality strategy. “You can never make your money back online.”

But you can develop an audience, which is why many bigger companies say they’re moving into the space.

Starz Digital Media is using the Web series as pilots for TV shows.

“There’s reduced risk in developing new content online versus the traditional model,” DeBevoise said.

Now Starz is developing a seven-part action series that could be turned into a TV series and looking to develop and acquire others.

Producers say to be successful online, shows need to involve the audience.

Williams said in the future, T180 might re-release its shows on DVD or package them for foreign distribution. They also could serve as a launch pad for a movie, building an audience before a theatrical release.

There is much to ponder here, but as people bemoan the fact that they "seemingly" can't use ads alone for online content I go to YouTube, click on a video and see pop up advertisements brought to me by Visa. One company is sponsoring ads of another company popping up on a web video.

It's that kind of entrepreneurship that tells me that ad-only on web video is going to continue to morph, but it's going to turn out just fine.

And while large companies can't make money with ad-only web video, that's not to say that some entrepreneurial sort can't do it on his own. With the budget levels some of these guys are working at ($50,000) , you can make an attractive movie serial or series that can be sold overseas.

There's Not Many of Them - Yet - But They are There and Doing It

As reported in The NY Times there are several folks out there making a living off of their YouTube Videos.

"One year after YouTube, the online video powerhouse, invited members to become “partners” and added advertising to their videos, the most successful users are earning six-figure incomes from the Web site. For some, like Michael Buckley, the self-taught host of a celebrity chatter show, filming funny videos is now a full-time job.

Mr. Buckley quit his day job in September after his online profits had greatly surpassed his salary as an administrative assistant for a music promotion company. His thrice-a-week online show “is silly,” he said, but it has helped him escape his credit-card debt."

And the frosting on the cake:

"In a time of media industry layoffs, the revenue source — and the prospect of a one-person media company — may be especially appealing to users. But video producers like Lisa Donovan, who posts sketch comedy onto YouTube and attracted attention in the fall for parodies of Gov. Sarah Palin of Alaska, do not make it sound easy. “For new users, it’s a lot of work,” Ms. Donovan said. “Everybody’s fighting to be seen online; you have to strategize and market yourself.”

It's not just Joss Whedon or Kent Nichols making money on the web with video. It's hard, but it can be done. It's not "back that Brinks truck up / private army in Iraq money", but as Rogers said awhile back - "Nobody gets rich, but everybody gets paid."

What's also interesting is that the article glosses over the alternate revenue streams available. You could make a great web video that gets seen, but doesn't make you money. If I made a web video and it generated pennies to me, but I had a cool t-shirt tied to it that everyone wanted, and I sold thousands of them...? Well, friends I would take the win and go home to think of more ways to create fun video stuff so I could sell more shirts, books, action figures or other stuff.