Wednesday, February 24th, 2010
18

Video as Publishing: This Is How We Do It

AN OLD JEWA fan of Old Jews Telling Jokes once sent us an email saying he loved the videos but he couldn't figure out how to print them out and needed our help. How adorably incorrect! Laughter, long sigh. But deep down, this fan's sentiment is not entirely ridiculous.* A lot of what we see on the Internet is digital publication; usually we can print it out. This notion underlies my grand unified theory of Internet video: treat it like publishing, not film or television, and this will become a viable industry.

Much of the film and television business is based on risk management. Will this show work? Maybe! So why make it? Because it's based on this book that sold a million copies and it stars Brad Pitt and it's a murder mystery and we know that murder mysteries are SO HOT right now, especially with teen girls in suburban neighborhoods. Every brand, talent and genre has a particular following, and we have a vague sense of how big that following is and who is in it. And the marketing people in Hollywood, they're brilliant. They know exactly how to reach these audience pools and how much money to spend doing so. All things considered, if there's a pretty good shot people will watch a show, and the projected audience is big enough to justify the cost, the project's a go.

We've figured out a few things about Internet video, but so far not enough to justify anything but the smallest risk. We know what the big genres are: technology, gossip, cute things, mommy issues, how-to, awesome, what the fuck-and porn. We know that everything works better with a dash of funny. We're pretty sure we need to make peace with advertising, though we have great hope for direct sales. We are mostly clueless when it comes to marketing. We have trouble reaching people.

This is where my publishing theory comes in-regarding online publishing, that is. (Just to be clear, we ain't printing no videos.*) It's easy to find the exact size of a blog's readership-there's a stats page somewhere that tells you. If an editor posts a video to her site, some percentage of her audience will click on it. If you can estimate the traffic, you can estimate how many ad impressions will be delivered and you can estimate revenue. If you can estimate revenue, you can gauge how much to spend on production. You can manage your risk.

The editor provides both marketing and distribution. These two functions do not overlap in film or television. The closest you get is seeing the one-sheets in the theater lobby advertising the movies playing at that theater. But online these can be the same thing. Here's a video I recommend you watch (promotion), and you click on it (delivery).

Let's imagine a website with one million unique viewers per week. Its editor, through years of applying the human skill of pattern recognition, knows that 2% of her audience will watch a video she posts. That's 20,000 people. Now assume an eCPM [effective cost per thousand impressions] of $15 for all the ads in the video stream, and boom, you know with a certain level of certainty that this one video will gross at least $300 in revenue.

You laugh. But that $300 of expected income is the kernel of an industry, because it is predictable. Get your production costs below $300 per episode there's a good chance you'll make a profit. (Hint: you'll need to shoot in bulk.)

And play with the variables. Plenty of websites have more than 1 million uniques a week. When they're that size they have robust ad sales teams that can get a higher eCPM. And if the show is, you know, actually good, then the percentage of the audience who clicks "play" might be higher.

Then factor in the banner ads that surround a video player widget and the social media aspect of a thousand editors of personal blogs and Twitter feeds and emails spreading the links and embedding the video elsewhere and all that is upside and pretty soon there's a BONANZA.

Okay, so I'm floating up in the clouds now. But you know what else floats around in the clouds? Moisture. Little molecules of water just hovering around in the sky. If you introduce a single speck of dust up there a few water molecules stick to it and then more will stick to those and suddenly you have a raindrop that brings the whole thing back to earth. (This dust is called "cloud condensation nuclei." I learned it on Wikipedia.) The millions of people who spend inordinate amounts of time on the Internet are the water molecules in this metaphor. The iota of predictability that an editor can bring to the equation is the speck of dust, the condensation nuclei.

The only way this works is if the editor commits to embed every episode in a series and to a schedule. The only way she'll do that is if she loves the show. Her publisher isn't going to make her do it, and the scent of bonanza picked up by the trained nose of the ad sales team will not factor into her decision (that would be unethical). But if she loves the show, and she kicks it to her publisher to hammer out a deal and then over to the ad sales team who sells the shit out of it? Condensation might happen.

So what makes an editor fall in love with a show? Ask her! And pay close attention to her voice, as expressed on her site. Video production is a collaborative art form, and the editor will, one way or another, have a say in the creative. She's the gatekeeper to an audience. If your key don't fit, the door won't open.

Now, a confession. I've been trying to do this for two years, pitching independent video series to blog networks and other publications as if they were distributors, and I haven't got it to work yet. Not in any formal manner, at least. There are probably a ton of reasons for this, not the least of which is that online publishers and Hollywood producers speak two different languages. ("Editor" means something totally different in Hollywood!)

But I've seen signs enough to believe that this is doable and that it can work. The point of writing this is the hope that it finds someone who has done it successfully, or that it infects someone's thinking enough to try it on their own. There's a saying in Hollywood that nobody wants to be first, but everybody wants to be second. You there, take this idea, make it work, then shoot me an email. I will gladly follow in your footsteps.

*It seems pretty likely that the fan wanted to print out transcripts of the videos, and to this end we recommend he purchase Old Jews Telling Jokes, the book, which is coming this fall from Villard!



Did Eric Spiegelman mention that Old Jews Telling Jokes has a book coming this fall from Villard?

18 Comments / Post A Comment

Zack (#2,609)

The point of writing this is the hope that it finds someone who has done it successfully

I am not that person. I haven't found that person. I'm not sure that person exists. But if, ya know, you find that person, please by all means SHARE

riggssm (#760)

As someone ignorant of how this web thing works, I'm shocked that only 2% click the vids? It must be a challenge to stay motivated/engaged with that type of response.

ericspiegelman (#3,421)

2% is what I've heard to be a "reasonable" assumption. A couple different people have given me this figure. But they were talking about random videos not part of a series, e.g., here's a cute cat video, here's some pretty Vimeo eye candy, etc. My guess is that if we're talking about an episodic series that builds audience over time, the CTR will be higher, but I don't have data that supports this.

jfruh (#713)

If you actually know any of these "robust sales teams" who can get more than $15 eCPM for anything, anywhere, have 'em call me, 'k?

ericspiegelman (#3,421)

By $15 I meant the aggregate for all ad spots in a video stream: pre-roll, overlay, postroll. I've seen it go as high as $20.

ericspiegelman (#3,421)

Also, I heard that WSJ.com gets like $40. But, you know, bankers and shit.

Caroline Waxler (#3,668)

Good insights from a smart guy. Thanks Eric. In the meantime, excuse me, I need to go print this out.

"Okay, so I'm floating up in the clouds now. But you know what else floats around in the clouds? Moisture. Little molecules of water just hovering around in the sky. If you introduce a single speck of dust up there a few water molecules stick to it and then more will stick to those and suddenly you have a raindrop that brings the whole thing back to earth. (This dust is called "cloud condensation nuclei." I learned it on Wikipedia.) The millions of people who spend inordinate amounts of time on the Internet are the water molecules in this metaphor. The iota of predictability that an editor can bring to the equation is the speck of dust, the condensation nuclei."

This was maybe the most insane transition I have ever read. I liked it!

ericspiegelman (#3,421)

"Make it rain!" was a little too banal.

Liana (#161)

My favorite genre is cute things with mommy issues. Also – any insight into how I can make money off my dog?

riggssm (#760)

Steps to monetizing your bitch … hrm. Didn't Michael Lohan figure this one out already?

Cajun Boy (#132)

I bet Eric Spiegelman wore a turtleneck as he wrote this. Or a Kurt Rambis jersey. Or maybe a Kurt Rambis jersey over a turtleneck. Yeah, for sure.

Liana (#161)

Like.

Atencio (#399)

Eric Spiegelman is perhaps the smartest person I know when it comes to online video distribution, and he's written an excellent article for The Awl on the world of video publishing, and what the future holds for the medium. Eric and I have had discussions about this in the past, and I think he's right on the money here with his treatment of online videos as having more in common with the publishing world's business model, rather than the traditional Hollywood distribution model. However, I think it's important to expand a little further on one of his points, which is risk management.

Hollywood is bananas about risk management because the cost of producing films and television shows continues to skyrocket, making it economically unfeasible to produce content without a built-in audience. However, the digital tools available to filmmakers means that, with some amount of compromise, it no longer has to cost thousands or millions of dollars to produce your vision. Ideally, I think the online video world needs to evolve into a business model that take far more risks than major studios and production companies, and use the niche-market success stories to underwrite the whole operation, with the big breakout hits providing the profit necessary to thrive and grow. In order to make this happen, however, I think companies are going to have to realize that the eCPM figures need to be a lot higher. Gone are the carpet-bombing style days of advertising, where you pay $100,000 for a national tv ad and hope that 10% or 20% of the viewing audience might respond to your product. Now, because there is so much choice on the internet, you can much more narrowly target potential customers. 20,000 views may not sound like much to an advertiser, but if they realize that, because the specific website or blog audience is comprised mainly of people who are highly likely to be interested in their product, then those 20,000 views are much more valuable than the 1.5 million viewers that would have seen their ad on an episode of How I Met Your Mother. If the CMP dollars are higher, better content can be produced, which leads to even more viewers, etc.

It's kind of the Wild Wild West right now, with big media companies trying to dip their toes into the water, but spending far too much money with little or no advertising dollars. I directed a web series in the past that I won't name with a $600,000 budget, which is ludicrous for short form content that will be lucky to get a million+ views. If people who can provide quality entertainment for cheap (*cough* me *cough*) can get together with people like Eric who understand the need to change the way the business end is managed and grown, I believe online video has the potential to make far, far more than the film and home video business combined. It's going to take some time, and yes, there are still lots of technical limitations, but I believe it will happen.

Atencio (#399)

Whoops, I didn't mean to copy paste that whole thing. BUT OH WELL.

Ribs (#2,690)

You are truly an Internet Gentleman, sir; for your open sharing of well-considered and connected thought, while also unfurling a banner for others to move forward- from the point you've fought for and staked out in this field of ideas.

Ribs (#2,690)

Do you have a napkin for my lips and mouth btw

Andrew Gauthier (#3,713)

I thought of this post while reading an AdAge column about how "Adult Swim has partially outsourced the pilot-greenlighting process to you, me and any other democratically minded goober with a broadband connection" (http://bit.ly/alLqTO)

Perhaps web video can become more attractive to advertisers by emphasizing the interactive relationship it has with its audience. Adult Swim is using the web to build an audience for a new TV show–the key may be to find a way to do the same for video that stays on the web.

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