How Will Amateurs Make Money from Online Videos in 2007?

Right now there are only two ways for an amateur to make money on short online videos, but this will soon change.

  1. Provide a website or network exclusive rights and get a one-time payment. We've seen certain amateur content creators already stop producing content for YouTube because they've been presumably approached by "content scouts." Remember MadV? He said good-bye and I would expect to see him appear somewhere else. I've seen celebrity YouTube stars also vanish with ambiguous plans about entering into a different arrangement. money-large.jpgI've been contacted by such content scouts, but the financial transparency isn't clear so I haven't done anything.
  2. Serve videos through a revenue-sharing site (usually non-exclusive that allows for ongoing income based on view volume). Eepy Bird's $15K plus income on their Coke/Mentos is a good example of this. They opted to run their videos through Revver and opted to post them exclusively even though Revver doens't require that.

As 2006 continues, we're going to see some new models emerge, providing more options to amateur artists. These will require some serious trade-offs for content owners because we'll have to weigh options without knowing exactly which will be most profitable.

For instance, some online video sites are developing "exclusive revenue-sharing models" whereby you'd turn over exclusive rights to your video for ongoing revenue based on views. This only makes sense if you expect to get dramatically more views in exchange for giving up your video forever.

But if you apply proven media models to the online space, it makes sense that this will be an option. A website can't sell its content upstream (to cell phone providers, for instance) if most of their content is non exclusive and violating copyrights. So the future for a value-added intermediary depends on garnering traffic, getting good content, and then distributing that more broadly.

In any event, there are three things that are critical. 1) Good content (defined as funny, sexy, short and viral). 2) Traffic (there's no advertising revenue without traffic), and 3) Distribution and promotion (someone has to market the videos… more on that soon).

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