Making Money from Content

(This interview is part of David Spark’s (@dspark) series “Making Money from Podcasting” (read summary “9 Successful Techniques for Making Money from Podcasting”) where he interviews podcasters who are actually generating revenue from their podcasts. There are many techniques, and here’s one person’s tale of how he’s making money from podcasting.)

Kevin Kastner, co-producer of Alaska HDTV

Get your own sponsors

Kevin Kastner is the co-producer of the video podcast, Alaska HDTV. He produces the show with Scott Sloan, the original founder of Alaska Podcast (the original name of Alaska HDTV). While in the Alaska Podcast incarnation, Sloan monetized the production through a relationship via the podcast network Mevio (previously known as PodShow and started by legendary MTV VJ Adam Curry – read/watch my interview with Adam Curry). At the time, he was making some ad deals with Mevio but he didn’t have much say and control about the deal. Sloan and Kastner really didn’t understand what the terms of the deals were. They simply received a check in the mail for a few hundred dollars. It wasn’t clear what arrangement Mevio had made with the advertiser and what their cut was, said Kastner.

Interview (Time: 17:13)

Download mp3

Mevio’s offers started getting weaker. Some deals required Kastner and Sloan to run advertisements for free with a referral code and if the advertiser closed a client, Kastner and Sloan would get paid out a referral fee. The relationship with Mevio was starting to sour. The poor offers, the lack of transparency in the deals, and the multi-year commitments caused the two of them to say themselves, we can do better on our own.

As Kastner and Sloan set out to get their own sponsors, they quickly determined that they wanted to go after the travel and transportation industry. They picked companies and went direct to the PR and marketing departments within those organizations. The first company they targeted was Alaska Airlines. Not only did they go after employees within the company, but they also went after their ad agencies. The idea was to corner them at all angles so there would be no way they could avoid being seen, said Kastner. While they didn’t get Alaska Airlines, they did get a partner of Alaska Airlines, Bank of America, issuers of Alaska Airlines’ credit cards. Bank of America had a budget and some money to spend before the end of the quarter. It was really good timing for Alaska HDTV.

In the early days of managing their own ads, like with Bank of America, Kastner and Sloan baked advertisements into Alaska HDTV with a product placement and a pre-roll. Kastner said he avoided the CPM equation at all costs. He uses a flat rate sponsorships, traditionally three months. It’s not hard to calculate Alaska HDTV’s CPMs (between $30-$50) as Kastner gives sponsors full stat reports on viewership. While he was so eager and creative about advertising from the onset, the market has devolved, said Kastner. What they initially thought was advanced programming to entice advertisers (e.g. baking pre-rolls into shows, in-show product placements) turned out to be too confusing. Advertisers just want inserted pre-rolls where they completely control the creative. So for now, because that’s what advertisers want, that’s what Alaska HDTV sells.

Kastner says now that he’s made the full time switch to getting their own sponsors, they’ve increased revenue 200-300 percent. But that’s come at a real cost. It’s no longer a part time gig. Alaska HDTV is his sole source of revenue and the time he’s put into it has gone up more than ten-fold. They do seek other revenue opportunities through hired gun video production and speaking engagements.

Listen to the interview as Kastner tells the tale of his personal struggle seeking sponsors and offers some great experiential advice to others looking to head down the same path as him.

More episodes of “Making Money from Podcasting”

• Never Not Funny (Technique: “Partial show for free – full show paid”)
• Personal Life Media (Technique: “Build your own media network of programming and sell advertising against it”)
• Pregtastic (Technique: “Get your own sponsors”)
• Elsie’s Yoga Class (Technique: “Sell an iPhone application along with your podcast”)
• Mac OS Ken (Technique: “Give away five shows for free, make them pay for the sixth”)
• Duct Tape Marketing (Technique: “Build your brand to sell your services”)
• ScreenCastsOnline (Technique: “Give away every other episode. Make them pay for the rest.”)
• Izzy Video (Technique: “Give away every other episode. Make them pay for the rest.”)
• Slate Gabfests (Technique: “Integrating sponsorship with the show’s editorial”)
• Wizzard Media (Technique: “Got audience? We’ll get you sponsors. Or, get sponsors on your own and we’ll insert the ads” PLUS “Sell an iPhone application along with your podcast”)
• Premiumcast.com (Technique: “Build an audience and sell premium podcasts”)
• Manager Tools (Technique: “Build your brand to sell your services”)
• ESPN (”Build your own media network of programming and sell advertising against it”)
• Mevio (Technique: “Motivate your audience”)

Susan Bratton, CEO of Personal Life Media and host of DishyMix podcast

This interview is part of a series “Making Money from Podcasting” (read summary “9 Successful Techniques for Making Money from Podcasting”) where I interview podcasters who are actually generating revenue from their podcasts. There are many techniques, and here’s one person’s tale of how they’re making money from podcasting.

Build your own media network of programming and sell advertising against it

When the idea of generating revenue from podcasts first came about, podcast ad networks such as Kiptronic (now Limelight), Podtrac, and PodShow (now Mevio) sprung up offering to sell advertising for any show that could grab an audience.

Interview (Time: 8:26)

Download the MP3 file

These ad networks build up a stable of random programs and then group them together by category (e.g. sports, entertainment, health and fitness) so that they can sell advertising against the programming. For example, an advertiser with an energy drink could buy ads across all of the podcast network’s health and fitness programming.

It’s a model that works for some, but it also requires a revenue share with the ad network and in some cases you’re forced to sign long term contracts. For the advertisers, they’re not getting any level of consistency. These programs for which they’re purchasing advertising are not all being produced or authorized by one organization, like a media network, and therefore the quality of an ad’s presence may vary drastically.

When an advertiser purchases advertising across a media network, such as a TV network like NBC, ABC, CBS, they know they’re going to get some level of consistency because all the programming is being produced by the network. Susan Bratton, host of DishyMix podcast is mimicking this very same network programming sales model with Personal Life Media, an online network of blogs and podcasts that cover personal life issues such as career, love, health, and finance.

As CEO of Personal Life Media, Bratton controls the overall programming, brand, and ad distribution of her network thereby creating a consistent experience for her audience and advertisers. She similarly sells programming by category, but unlike purchasing through a podcast ad network, advertisers know they’ll get a consistent experience with programming and audience. Bratton says they get about a million downloads a month across all their forty shows. With that much exposure, she can sell packages of programming by category that get from 100,000-250,000 downloads per month.

For more, listen to my interview with Bratton as we talk about her online media network business model, plus tricks for podcast advertising, such as how to best do in show incentives with promo codes.

More episodes of “Making Money from Podcasting”

• Never Not Funny (Technique: “Partial show for free – full show paid”)
• Pregtastic (Technique: “Get your own sponsors”)
• Elsie’s Yoga Class (Technique: “Sell an iPhone application along with your podcast”)
• Mac OS Ken (Technique: “Give away five shows for free, make them pay for the sixth”)
• Alaska HDTV (Technique: “Get your own sponsors”)
• Duct Tape Marketing (Technique: “Build your brand to sell your services”)
• ScreenCastsOnline (Technique: “Give away every other episode. Make them pay for the rest.”)
• Izzy Video (Technique: “Give away every other episode. Make them pay for the rest.”)
• Slate Gabfests (Technique: “Integrating sponsorship with the show’s editorial”)
• Wizzard Media (Technique: “Got audience? We’ll get you sponsors. Or, get sponsors on your own and we’ll insert the ads” PLUS “Sell an iPhone application along with your podcast”)
• Premiumcast.com (Technique: “Build an audience and sell premium podcasts”)
• Manager Tools (Technique: “Build your brand to sell your services”)
• ESPN (”Build your own media network of programming and sell advertising against it”)
• Mevio (Technique: “Motivate your audience”)

I can’t make heads or tails of this, but the cost of mobile applications varies widely between different mobile platforms, or sometimes not at all. There’s no consistency. It’s all over the map. For simplicity, I’ve decided only to compare iPhone vs. BlackBerry applications.

Let me show you some examples:

BlackBerry app more expensive than iPhone app

iPhone/iPod

BlackBerry

iPhone app more expensive that BlackBerry app

iPhone/iPod

BlackBerry

iPhone and BlackBerry app priced exactly the same

iPhone/iPod

BlackBerry

While both BlackBerry and iTunes have many free apps, only iTunes seems to have inventory of $.99 apps. With BlackBerry, after free, the applications cost $2.99 and up. Most wouldn’t think much between $1 and $3, but that is THREE TIMES AS MUCH.

A few top selling $.99 iPhone applications

In this sample I only looked at games, not productivity applications. When you get into that space the price varies even more widely, especially when you start comparing Windows Mobile applications which back in the day could cost hundreds of dollars on Handango. Now productivity applications have come down to a more reasonable arena of about $29, but it’s still violently more expensive than other applications. I’m just confused as to why the pricing of the mobile applications have no rhyme or reason to them. I don’t track the gaming market that closely, but I can say that when a game is released on the three major platforms (XBOX 360, PS3, Wii) it’s priced the same. So why isn’t it the same for mobile platforms?

Possible explanations for the complete inconsistency in mobile application pricing:

• Who cares? It’s usually less than $5.
• Nobody is deciding between an iPhone or a BlackBerry app. They’re deciding whether they’re going to get the app at all, so they never compare prices on other platforms.
• The cost of applications is never a deciding factor when purchasing a mobile device.
• Pricing for mobile applications is far from settled. We’re all still in a “figuring it out phase.”

Got some other explanation? Let me know.

In the early days of online video, so many aspects of production and monetization mimicked traditional broadcast programming. Online videos were simply repurposed TV programs with interstitial advertising. While some of that is still in play and is working very successfully, like on Hulu, interstitial TV-like ads are not the only way advertisements can be placed in an online video.

As a video producer, before you contemplate an advertising insertion technique, ask yourself, “What are the advertisers’ goals?”

• Brand awareness?
• Do they want people to actually conduct an action, such as pick up the phone and make a call or go check out a site?
• Should the advertisement simply entice people to go and buy their product?

You need to know these answers in order to provide the best benefit for the advertiser. In some cases you’ll have complete control of the advertising insertion decision, and in other cases you’ll have no control. Depending on the brand you want for your program, control of ad insertion may or many not be necessary.

Here are some of the common methods for ad placement within online video programming.

Overlays and picture in a picture – The advantage of this technique is that it doesn’t stop the video programming. The disadvantage is it distracts from the video programming by covering up the content, adding non-relevant information, or actually shrinking the viewing window. YouTube started doing overlays with its top tier programming. Online video ad network VideoEgg has a whole series of different overlay and picture-in-a-picture ad placement formats.

Pre-roll, mid-roll, post-roll – This is the most popular, most used, most successful, and most complained about advertising insertion technique. I believe the reason online interstitial advertisements get so much guff is because they’re a direct descendant of traditional broadcasting. There’s a feeling that the online experience should not be a repeat of traditional media. But as much as people complain, specifically about pre-roll advertisements, they are still immensely successful. Hulu has proven that this model can definitely work if you’ve got high demand content.

In program advertisements – This is where the talent of your show reads the ad or makes a mention of the product in a way that it naturally fits within the editorial and programming of the show. Online video network Revision3 does this with many of its advertisers.

Product placement – Similar to in-program advertisements, a product is placed and instead of an actual advertisement, the product becomes intrinsic to the show’s story and programming.

Should the program’s producer or the ad network determine the ad’s placement?

Producers don’t necessarily have to suffer arbitrary ad placements. They can place the ads where they want to place them. Companies such as Visible Measures track viewership of videos within the video and can determine at precise moments when viewership is at its highest. With that information, producers can determine where to insert an ad or a product placement or an overlay. In an interview I conducted at The CMO Club last year in New York, here’s a short piece of advice from Matt Cutler, Visible Measures’ VP of Marketing on where you should and should not place an online advertisement.

Read my article about Cutler’s presentation on digital video effectiveness.

As Cutler advises, insert ads as early in the program as possible and also where the attention is at its highest. But that’s just general advice for all videos.

If your advertisers are in line with your editorial, you can actually place ads alongside your editorial. For example, if you’re talking about video editing, then an ad for a Flip Mino camera alongside would be completely appropriate.  A few years ago I was attending Jeff Pulver’s VoIP conference (no longer owned by Pulver) in San Jose and I was impressed by a demo from a small company then called Vidavee (last year they were bought by Vignette). Vidavee made it possible for producers to determine the exact moments within their shows that they wanted overlay ads to appear. Using the Vidavee service, the more clicks an ad got, the more money the producer would receive. Therefore, it made sense for the producer to find those best moments. But finding those moments was purely a creative decision and not an audience measurement decision like what Visible Measures provides.

If online video producers want to make more money, they need to get more involved with the advertising insertion process.

What other suggestions can you offer for placement of online video ads?

For so long, ecommerce has been defined as “and soon there will be a day when you’re watching ‘Friends’ and you’ll be able to click on Jennifer Aniston’s sweater and buy it.” This idea of “buying Jennifer Aniston’s sweater” T-commerce (a.k.a. television commerce) cropped up around 2001. For some demented reason, we all thought that was the ultimate future of content and commerce. Click an item online and buy. It would be the beginning and end of monetizing content. I heard that scenario played out again and again at conferences. Why specifically Jennifer Aniston? And why her sweater? Prior to those discussions I’ve NEVER heard a single woman ever say, “I want to buy Jennifer Aniston’s sweater. Where did she get it?” Have you? If there’s never been any demand of anyone wanting to buy Jennifer Aniston’s sweater, then why were we all collectively so obsessed with that scenario?

Since then we’ve seen that content doesn’t have to be monetized so directly. That content is used to build brand, build voice, and create associations of your company’s brand with the content’s brand. And in other cases we can see that content can help us sell things directly by giving us the information we need to make a purchase. Then there are the endless variations in between. Have a favorite?