How To Make Online Video A Sustainable Business

It was a packed house Tuesday night at Busby's East in Los Angeles as online video heavyweights gathered to discuss the future of the medium. Tubefilter founder Drew Baldwin moderated a panel that featured Chill co-founder and chief-executive Brian Norgard, mainstream actor turned online director Michael Urie, and Dan Dobi, the filmmaker behind the YouTube documentary "Please Subscribe" (ironically, not available on YouTube).

The forum was hosted by pay-to-play social video services Tubefilter and Chill. Last week, Chill debuted Chill Direct, a marketing tool inspired by comedian Louis C.K.'s direct-to-consumer model, allowing creators to sell content direct to fans with a 70/30 profit share. (See Chill Direct: A Farm System For Video Distribution). 

The audience of 100 plus was treated to the panel's insights on the current state and future of online video, and why creative control, community building and the changing economics of video will make the platform sustainable. 

Why It Works

While the studio system market for buying films is small, the market for people to pay for films is huge, said Norgard. But if supply is determined by demand, then something is wrong with the current mainstream distribution system, and by extension, this is one major reason there's such a big market for online content. 

"You can't just make an indie movie and get into a festival," said Urie, who parlayed his success (and cash) from ABC's Ugly Betty series to direct his own film, "Thank You For Judging."  But Urie added that it's no longer a failure to not sell your film to the studios. He knew his film wasn't Sundance material and if he took it to a small festival, he wouldn't get sales. So Urie chose to take his finished project straight to Chill Direct. As did Dobi, who says he doesn't expect his YouTube doc to be on that platform for several years.

Dobi, who described himself as a filmmaker who doesn't go to the movies, says he watches more content on his computer than in theaters (and via BitTorrent and pirated software to boot). He thinks the affordable model of streaming video alongside of keeping people in the comfort of their homes, makes this platform attractive. "If something's affordable, people are going to pay for it," Dobi said.

Both Urie and Dobi think smaller films have a better chance online than they would in mainstream channels. 

As consumers keep voting with views (and increasingly with dollars) moving away from mainstream media and demanding premium online video, Norgard said he expects this will help reorganize the current economics of the system. Unlike iTunes or other services difficult for regular people to get into, open platforms let creators bring along their own communities of followers and brand advocates, and let them quickly build new followings - depending on the quality of the content they release.

Norgard added that this kind of content has a longer shelf-life than traditional media, which often quickly fade to obscurity if not seen in the right amount of theaters, or when they are sold to a television network after the theatrical release. Conversely, online content can be viewed and shared  for as long as the material is available online. And it can then be sold and distributed to major networks and content providers at any time. "The digital/social window could make the theatrical window look like a side car," Norgard quipped. 

Straight From The Horse's Mouth...

Actresses turned YouTubers Kimmy Kim and Frutron have been making episodic short videos for the past year. They have a following, but said they've made enough money to buy a burger, blender and a cheese grater. The 20-something L.A. transplants attended the meetup not knowing what to expect, and left excited to get involved with new platforms.

"We weren't quite sure what it was all about and how sustainable it is and if its working for people," said Kimmy Kim. But "people sounded really excited about the possibliies of it. There are even more options for us. It's encouraging for us, because we can do that too."

The creators took to YouTube to create more personal material, but like many others their goal is to use their content as a springboard to television and feature films, Frutron said. They hope to use the pay-to-play format as a forum to try to do just that, and make some money along the way.  

"We're all experimenting," Kimmy Kim said. "We're still at the let's see what sticks phase."

 

Photo courtesy of Brian Norgard.