The conventional wisdom is you can’t make money in user-generated video. Advertisers are just too fearful of placing their brands around baseball-bat pranks or shopping-cart accidents or half-naked girls. So why bother trying to peddle to a marketer what your neighbor or the dude down the street cranks out with his cell phone camera?
Because if you can filter and rate and rank the videos that young men 18 to 34 like to watch, you’ve got a business. At least, that’s the case according to Keith Richman, the CEO of Break Media and its flagship site, Break.com.
Mr. Richman, along with his senior VP of sales Andrew Budkofksy, reached out to me recently after I reported on the latest marketplace study lambasting the money-making potential, or lack thereof, in user-generated videos. The study in question, from Ipsos MediaCT, said viewers don’t want ads in user-generated videos even if those videos are free. Then there’s the Diffusion Group report finding that user-generated videos earn only 4% of online video ad dollars today and that that percentage will remain the same five years from now.
Yes, that’s a small percentage, but a fair amount of those dollars are going to Break.com. The site draws about 18 million unique visitors each month, streams 300 million videos per month and, most important, has landed deals with advertisers including AOL, T-Mobile, Dos Equis, Samsung and Burger King.
What’s the trick?
One word: channelize.
What that means, quite simply, is if you group the videos, the advertisers will come.
“Advertisers just don’t want uncertainty,” Mr. Richman said. “They want to know they’re not going to wake up one morning and have an All-State ad against a video of a car crash.”
The way to avoid that morning stomach plummet is to eschew randomness. So Break doesn’t show ads against videos that were just uploaded because those videos are too “uncertain.”
Instead, the site collects and groups videos into channels, such as the extreme skating channel running this month. That channel is sponsored by T-Mobile, specifically the T-Mobile Sidekick Tony Hawk edition. That’s a perfect match for the advertiser because Tony Hawk is a skater and skateboarding videos and stunts are among the most popular user-generated fare on any video site.
“Channels help advertisers feel more comfortable, because they know the advertiser is doing something against specific content,” Mr. Budkofsky said.
Break also will recirculate videos that fit certain categories advertisers like.
The key, then, to making money off user-generated videos—because the vast majority of videos uploaded to Break are user-generated—is to cordon off the ad-friendly ones through ratings, filters and editorial input.