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Despite layoffs at Web video studios and sliding advertising forecasts, the future is not as bleak as it might seem for online networks that produce targeted shows.
Last week research firm eMarketer lopped $1.3 billion off its projections for 2008 online ad spending, revising them to $23.6 billion. But the Internet ad business is still growing at about 11% this year, and the online video ad sector will climb 45% next year to $850 million, eMarketer said.
Broadcast and cable networks along with premium sites like Hulu will command a large share of that $850 million pie. Smaller players with original content such as Revision3, Next New Networks, For Your Imagination, ManiaTV, 60 Frames and MyDamnChannel will snag a piece, too.
Many of these independent Web studios are on pace to turn a profit next year.
MyDamnChannel even expects to break even this quarter.
“Content quality matters a lot, as does robust distribution and, when possible, partnerships with larger media companies with ad sales strengths,” said Will Richmond, analyst with VideoNuze.com.
Here’s a report card for 2008 and an outlook for 2009 for those six studios.
60 Frames
Top five shows: “Douchebag Beach,” “Who What Wear TV,” “Wassup 2008,” “Carpet Brothers,” “Tuned in With Nic Harcourt”
Views in 2008: Collectively 60 Frames shows have been viewed more than 50 million times this year
Growth in 2008: The company had zero views at the start of the year when it launched.
Sponsors signed in 2008: McDonald’s, Sprint, Saks, Procter & Gamble
Lessons learned: “Always focus on quality,” said Brent Weinstein, CEO of 60 Frames. “If you deliver quality content, sponsors and audience will follow.”
Challenges for 2009: The goal for the year ahead is building on what 60 Frames has learned so far this year, Mr. Weinstein said.
For Your Imagination
Top five shows: “Break a Leg,” “Kyle Piccolo,” “DadLabs,” “Real World Green,” “Gardenfork”
Views in 2008: Those five shows generated nearly 7 million views.
Growth in 2008: “Break a Leg” grew 15%, “DadLabs” 25% and “Gardenfork” 50%; the other shows launched this year.
Sponsors signed in 2008: Hasbro, Warner Bros., OxiClean, Kaboom, IFC, Kathy Hilton My Secret, Holiday Inn Express, Coors Lite, Primo Water, Midtown Comics, Theory
Lessons learned: “The more you can target your audience, the more likely your content will be sponsored,” said Paul Kontonis, CEO of For Your Imagination. “Infotainment is where it is at.”
Challenges for 2009: The challenges in the year ahead are delivering audiences in a crowded market and educating agencies and brands about online video sponsorships, he said.
ManiaTV
Top five shows: “Arcade,” “Dave Navarro’s Spread TV,” “All Access,” “Comedy Road Show,” “National Lampoon’s Lemmings.”
Views in 2008: Those five shows generated 127 million video views for the year.
Growth in 2008: For all its shows, ManiaTV has generated 148 million views, up 10%.
Sponsors signed in 2008: ManiaTV signed 52 advertisers including Axe, Doritos, Wrigley, AT&T, Yellow Pages, Dell, Sony PlayStation, Nikon and Adidas.
Lessons learned: “There are a lot of moving pieces to our business, so you must have a full package of production, packaging, distribution, ad sales, reporting, technology, scale and the partner relationships across the board in order to succeed,” said Peter Hoskins, the company’s CEO.
Challenges for 2009: “Help our advertisers weather this economic storm and continue to be their safe haven on the Internet,” he said.
MyDamnChannel
Top five shows: “You Suck at Photoshop,” “Wainy Days,” “Harry Shearer,” “Horrible People,” “My Damn Channel Music Nights Presented by SoCo”
Views in 2008: Those five shows generated about 27 million views, with “You Suck at Photoshop” leading the pack with 16 million views.
Growth in 2008: MyDamnChannel’s audience grew sevenfold this year.
Sponsors signed in 2008: Southern Comfort, Puma, Lincoln, Universal Pictures, Lionsgate, HBO, TMZ, Adobe, Skype, Swedish Fish and Fuse.
Lessons learned: “Web series with name talent builds more revenue than one-offs,” said Rob Barnett, CEO of the company.
Challenges for 2009: The goal for the year ahead is to expand and ink strategic partnerships with major media companies, Mr. Barnett said.
Next New Networks
Top five shows: “Barely Political,” “Fast Lane Daily,” “Channel Frederator,” “Viropop,” “Indy Mogul”
Views in 2008: Nearly 200 million views total for the year.
Growth in 2008: Next New Networks’ shows have more than doubled in views.
Sponsors signed in 2008: Next New Networks said it signed “dozens” of sponsors this year including Mars, Janome, SpikeTV and Lionsgate.
Lessons learned: The key take-away from 2008 is the importance of a regular audience, said Lance Podell, CEO of Next New Networks. “Our channels built loyal, regular audiences by providing consistent programming that is easy to access via our distribution network. [Audience] feedback is a core part of the programming.”
Challenges for 2009: “To get the advertising community to view online video as the primary, not secondary way to reach teens and 18- to 34-year-olds,” Mr. Podell said.
Revision3
Top five shows: “Tekzilla,” “SYSTM,” “Diggnation,” “Totally Rad Show,” “Scam School”
Views in 2008: Those shows should reach nearly 41 million complete views this year, translating into 1.2 billion minutes of engagement for the year, Revision3 said.
Growth in 2008: Those shows doubled in views for the year.
Sponsors signed in 2008: Revision3 signed 60 new sponsors, including the Air Force, EA, Sony, Anheuser-Busch, Dolby and Virgin America.
Lessons learned: “Focus on a core audience and demographic and super-serve them,” said Jim Louderback, CEO of Revision3. “Be everywhere, but make sure everywhere includes YouTube.”
Challenges for 2009: “Keep growing revenue and viewership,” he said.
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