Video Content Creators Like Rocketboom Can't Survive On Advertising

There has been a lot of talk about Rocketboom as of late (read Frank Barnako's Story on MarketWatch.com) as to how they are going to monetize their videos as they try to generate revenue. I think Rocketboom is a great example of where sometimes, our industry and the media that covers it, really goes overboard. From day one, Rocketboom was always talked about as being "successful" simply because they had a ton of traffic and eyeballs. Everyone talked about Rocketboom as the example of how to build a video business on the Internet even though enough people out there were saying, "where's the revenue"? What's the business model? Where's the syndication strategy?

Rocketboom should serve as a wake-up call to those who think that simply having traffic equals revenue and a sustainable, growing business model. Or to those that think online video advertising alone is going to generate a lot of revenue in today's market. Even companies like ABC and others are supplementing their advertising with corporate sponsorships, and in ABC's case, they have content that is professionally produced and is content people actually want to watch, unlike many of the other content sites on the web.

As an industry, we should be judging the success of any company based on revenue. I hate to say that as it sounds like something you'd hear from an analyst on Wall Street talking about a public company, but without real revenue, no company can survive. Sure, not all companies need to be huge and do tons of revenue. There is nothing wrong with being small, growing slowly and capturing more eyeballs or market share. But at some point, it all does come down to generating enough revenue to keep the company going, no matter how many eyeballs or notoriety your site has.

Comments

[anonymous]

I'd argue that it's not just revenue, but it's actually positive cash flow and profits. You may be able to grow revenues, but if you're losing money while doing so - you'll have a difficult time surviving.... unless you have generous benefactors (investors, VC's, etc.) to fund you while you search for profitability.

[wow powerleveling]

Hi

i don't agree with anonymous,the contribution isn't the right way to surviving or develop,in my opinion,innovation and improving the content r the most important for u.

[Drew]

I'd suggest taking a deeper look than Franks articles which tended to miss the point. The article you site was based on misinformation.

See:
http://www.dembot.com/013233.html

See also:
http://www.dembot.com/013757.html

Cheers,
Drew

[Richard]

Hi,

Another thing to keep in mind is advertising alone is not sufficient, having the metrics to make these important decisions are necessary. Having a million eye balls on your website is great, but finding your target audience and your market is what will help any digital business grow. A lot of media companies have been using Scope these days to figure out where and how to spend that money effectively and how to make more money off it. Check out http://divinityMetrics.com for more details.

Cheers..
Richard

[mpaige]

Wouldn't "survivability" depend on the cost of producing the content and overhead? Companies who manage their overhead, consolidate certain production costs and 'run a tight efficient ship' will be able to be profitable with advertising revenue. Especially if the content is something people want to watch. So the challenge for ITV producers is to create high quality without the typical runaway budgets seen in traditional broadcast and in Hollywood. It CAN be done and the cumulative viewership potential can be the same or greater than standard broadcast modalities (TV, movies etc). It's up to ITV producers to be smart, resourceful and progressive.

[Rick Davis]

The issue is singular one revenue stream accounting for all revenues that support the business. In order to run an on-line Business your Business Model must be broad and have other high value revenue properties that actually provide more of the revenue than does Advertising early on. You have to build a base of viewers and that doesn't come by just being smart with the bottom line or incredible programming. It simply is a system that can generate revenue from other sources, while the business is growing supporting operations and utilizing Brand Value and centralization of assets. A new business has no BRAND so you have to utilize other Brands who see you as a Better Solution than what is in the market presently and one that offers growth both short and long term. Isn't the end game the ability to show a successful Business Model and have support from those who use your solution. Most if not all New Media Solutions are the same today! There are no unique qualities nothing new or special just let me stream your content. It is much more than that the market needs new innovation. We are talking about revenues, innovation drives revenues with a Business Model that was built for that innovation. You can't build for innovation without providing a Business Model that supports that innovation. What we have is a Hot market with Huge demand with simple solutions that do not drive or utilize tools or plans that are developed for the operation of the Solution. You don't build a car that can go 200 miles per hour without understanding how it will be navigated.

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