Many people believe that producing original video is free and/or inexpensive. However, if you ask anyone involved, they’ll tell you that that’s not the case. Here are some reasons why:
- Production quality — at least for professional shows is very good. There are companies that have built studios and there are companies that use HD cameras. Both of these facilities are neither free nor inexpensive.
- Distribution — a lot of companies use a server or CDN (content distribution network) to distribute content. If you run a website, blog, or any other web property, you’ll realize that disk-space and bandwidth are not free. (This site is run on Squarespace. Use coupon code DMBIZ for 10% off.)
- Talent: On-camera and behind-the-scenes talent still comes from traditional media. If you’ve worked in the media and entertainment industry, you’ll realize that talent is not cheap.
Movie studios also have the above costs, and they’ve been able to monetize their content in multiple ways — subscription, premium, advertising, and merchandising.
If studios have been able to monetize their content in multiple ways, why haven’t online video producers figured out a way to be profitable?
