By Steve Clarke
Can online content really, really pay? What business models are emerging that are giving non-broadcast video providers a way of generating significant revenue?
These questions were the basis for a stimulating RTS early evening discussion held November 19 at Goggle’s gleaming new HQ in London’s Covent Garden, "Analogue Pennies, digital pounds".
In the chair was the pithy business editor of Radio 4’s Today programme, Simon Jack. He was joined by online platform operators Liam Tootill, managing director of specialist music channel, SB.TV, and Justin Gayner, founder of the high-profile Channel Flip, owned by Shine.
Completing the line-up were YouTube’s content partnership director, Ben McOwen Wilson, and Nick Cohen, head of media agency, Mediacom Beyond Advertising.
“We’ve been broke for two years,” said Tootill from SB.TV, which employs eight full-time staff, “but we’re now breaking even.”
The online music channel, available via YouTube, began as a hobby and raises revenue from pre-roll advertising and branded content.
In the future Toothill doesn’t rule out running a subscription service that would exist in tandem with the current service.
For several years Channel Flip’s ability to monetise short online comedy videos from household names like Harry Hill has impressed peers and rivals alike.
Gayner revealed that whereas a big established player like the FT could charge £35-£40 CPM, the equivalent Channel Flip rate for pre-roll video was around £15
He said there were essentially two ways of generating bucks from online content: getting brands to sponsor the show or “finding an amazing talent and selling it direct to the consumer.”
Cohen outlined three models for getting brands involved in paying for content. “It can be fully funded, part funded or sponsored,” he said.
Regarding social media, he warned that involving Twitter and Facebook was by no means a no-brainer.
Cohen said: “Social media is interesting and challenging for brands but there are lots of booby traps.”
YouTube, owned by the evening’s hosts Google, is unlikely to spend too many sleepless nights worrying over where its next digital dollar is coming from.
Having recently announced a new European channel initiative in the UK, Germany and France which will see professionally-made original video supplied by the likes of BBC Worldwide and All3Meda, YouTube’s momentum looks unstoppable.
McOwen Wilson stressed that unlike broadcasters YouTube's reach was global, but was still cheaper to advertise on than TV. Also, it didn’t need to employ producers and expensive commissioning editors.
Ever mischievous, Jack wanted to know if YouTube saw itself as a sugar daddy. “We see ourselves as a platform,” replied McOwen Wilson straight faced.
For a full report of "Analogue pennies, digital pounds", see the December-January edition of Television, published in late December.