Popular but Not Profitable

Mar 16, 2008  •  Post A Comment

Of the scores of Web video creators and producers attending last week’s South by Southwest Interactive Conference in Austin, Texas, few are making much money.
The coolly dressed Web stars of today and tomorrow who turned the Austin Convention Center into the epicenter of indie media creativity are all vying for the same rare find: the chance to make a real living online. So far, that’s been elusive for all but a few, and most of those creators making money are backed by either big media or big investors.
The winner of this year’s Greenlight Awards has relied on fan donations to fund the production of the Web show “The Guild.” That Web sitcom beat out 200 entrants to win a $10,000 cash prize from ON Networks at the festival in a contest that sought the next big breakout hit.
“The Guild” creator Felicia Day said the show’s team has aired seven episodes since last summer that have garnered more than 4 million views. But they don’t shoot an episode until they receive enough in donations to underwrite the production. The budget covers only essential production costs, not actor salaries. Ms. Day hopes the award will vault the show to another level where the team can start making money.
Jason Calacanis, owner of the popular Web show “Mahalo Daily,” said the show isn’t making money yet because he’s focused on growing an audience. He launched the Webcast four months ago and it now receives 50,000 to 60,000 views per episode. Mr. Calacanis doesn’t plan to sell ads until the show reaches 100,000 views per episode.
“We want to focus 100% on getting to 100,000 views a day,” he said.
Lindsay Campbell, the former star of “Wallstrip,” the humor-based Web show about finance, came to SXSW to premiere her new Web show, “MobLogic” on MobLogic.tv. The show is owned by CBS Interactive and its first advertiser is Saturn, which runs a brief pre-roll ad and then a 30-second post-roll ad.
“We are on the path to profitability, but the whole industry is still about a year away from having the ad solution figured out, so for now the remainder of our budget is covered by our parent company,” Ms. Campbell said. “If we are able to grow a large audience, we will have no trouble securing sponsors and the show will stand to be an example of success in the online video space.”

Editorial Independence

Irina Slutsky, who fronts “Geek Entertainment TV,” still works as a video consultant since her Web show isn’t self-sustaining yet. Adobe, GoDaddy and Intel have advertised, but Ms. Slutsky said she’s testing the ad waters carefully to make sure there isn’t any advertiser influence on the show.
But advertising appears to be the best way to make it in this world. Advertisers are expected to spend $1.4 billion on online video this year, according to eMarketer.
Michael Eisner’s Web studio Vuguru.com has landed some of that money. Vuguru debuted its new Web show “The All-For-Nots” at the festival in Austin last week with two advertisers, Expedia and Chrysler. The show is online at Hulu, iTunes, Blip.tv and other sites, as well as on mobile phones from Verizon and on Mark Cuban’s cable channel HDNet.

Profit Breeds Production

Vuguru produced last summer’s Web hit “Prom Queen,” which generated more than 15 million views online. That show turned a profit, which is why Vuguru has two more Web shows in production, said Jane Hu, business manager for the company.
“Prom Queen” and the ongoing series “Ask a Ninja” are the exceptions to the rule. “Ask a Ninja” draws more than 3 million views per month and its creators, Kent Nichols and Doug Sarine, are earning more than $100,000 a month from ad revenue, merchandising, licensing and additional deals, such as the publishing contract they landed with Crown Publishing to write a ninja handbook. The book will be released in August.
At SXSW the duo announced they had been tapped to write and direct a feature film remake of the 1970s cult classic “Attack of the Killer Tomatoes.”
Others are just hoping to get a little cash from a contest. The online comedy troupe Those Aren’t Muskets entered YouTube’s Sketchie’s competition for comedy shorts, which awards the winning filmmakers $40,000. Those Aren’t Muskets are currently semi-finalists and are urging fans to vote for them.


  1. They should be turning a profit. Just study what askthebuilder.com is doing with his videos. That one or two man team is making a killing because he knows what topics to cover in his videos.

  2. I think this is starting to change some in the past few months. I have a video on YouTube that is constantly making me $5 a day. I just need YouTube to let my other videos be available for advertising.

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