OTTAWA – Leveraging online platforms such as YouTube to generate additional revenue is having limited success, according to panelists on a session exploring new business models for film and TV at the Canadian Media Production Association’s annual Prime Time event on Friday.
There is a certain amount of appeal to using YouTube because it has such a vast reach, but there are still some significant challenges to making money from the popular video website. The amount of money to be made from using YouTube is still quite small, said Claude Galipeau, principal at Galipeau Group. It’s difficult, he added, to get the scale necessary by going the YouTube route and the conventional approach is still the better option.
“People are still winning the game if they consolidate audiences,” he said. “One of the challenges even if you’re doing new distribution [is] the money is not as big as traditional channels.”
Corey Vidal of Burlington, Ontario’s ApprenticeA Productions is one of the biggest individual YouTube producers and according to Galipeau’s back of the envelope calculations, he has netted approximately $100,000 since launching on the video portal six years ago (that estimate is likely low since Vidal has the resources now for a number of full time staff, who create videos both for fun and for numerous professional clients).
Even some of the largest YouTube channels such as Red Bull isn’t making a whole ton of money. Galipeau says Red Bull’s revenue from its YouTube efforts is about $760,000 annually.
Jamie Brown, CEO and executive producer with Frantic Films, agreed that there isn’t whole lot of money to be made on YouTube. The company is working with YouTube (money generated from these types of partnerships is usually split 50-50), but is generating a miniscule amount of revenue on a monthly basis. He said that a video that is ranked 20th will generate approximately a few hundred dollars a month.
Where the online element really gains importance is in audience engagement, promotion and some public relations. There is also the social media aspect which can drive significant customer interaction through content sharing. Leveraging the social media aspect of the internet is going to be key for any project “to be able to either bring audiences through social media or sharing content out,” said Peter Vamos, head of video strategy at Postmedia. “Using the Internet and getting the content out to your potential audience is a significant way forward.”
New distribution channels such as Amazon and Netflix undoubtedly create some challenges for the production community as they don’t pay into the system to support Canadian production. “I worry about more content coming through the Internet that’s not through cable and it’s not contributing to the CMF (Canada Media Fund). It’s making money for those who are charging for the data but it’s going to affect the cable companies’ subscriber revenues and that’s a big driver for the health of our buyers. That could be quite disruptive,” added Brown.
He explained that an even worse disruption could come from government action on deficit reduction as the Alberta government recently has had to do.
“At a very high level… if the Canadian government were to find and needed to cut and they’re committed to it, what would the elimination of a tax credit or significant reduction in CMF funding?” Brown wondered. “I mean you want to talk about disruptive. What Amazon and Netflix are doing is going to be nothing compared to getting rid of the CMF. That would be hugely, hugely disruptive for this industry and shake out a lot of players.”
