This brand has 6,000 How-To videos on YouTube - why? how?

[Walt Mann]

I was in a kite store here in Chicago the other day, and they had a kite there for $100. Later I got to wondering why someone would pay $100 for a kite, and I had the idea of looking on youtube to see what a $100 kite can do.

Lo and behold, there are countless "How-To Fly A Kite" videos of varying quality, and the $100 kites look pretty fun. But in particular there is a company called "Expert Village" that has 6,000 How-to videos posted on YouTube. They are low-budget sure, but they definitely have some production value going on.

How can someone make 6,000 how-to videos and then give them away for free?

See: http://youtube.com/watch?v=Bw7PF4F-jqc

[Matt Kern]

Hi Walt

I was a a little confused by your post at first. I thought the kite company had 6000 videos. I did a little surfing and got it all worked out.

This is what I garnered so far: The company, Expert Village, is aiming to build the largest "how to" video library. The kite guy probably just has 1 video. There many subjects covered on the site. They pay independent film makers an average of $300 per film submitted and sounds like you can make as many as you want.

They have 33,316 videos so far made by 2,748 filmmakers and these have been viewed a total of 54,381,845 times.

Lets watch as I pull some numbers out of my ass.

I looked at a video about Halloween makeup. The page has a fair number of ads - 100% niche targeted to halloween/special fx makeup companies. Brilliant.

They paid roughly $824,400 for these 33,316 videos. Each filmmaker made an average of 12 movies for a total of $3600. Not too bad.

Lets say that 2% of the people watching these videos click on an ad ( I bet it is higher since the ads are focused like a laser beam! ) and lets say 2% of these clicker-throughers actually make a purchase and our heroes, Expert Village, make $1 on that sale. A lot of assumptions, I know but you gotta start somewhere.

2% of 54,381,845 is 1,087,636. So 1 million people clicked on an ad.

2% of 1,087,636 is 21,752. So 2% of those clickers/buyers comes to about 22,000. At $1 per sale that is $22,000.

So a $22,000 profit minus $824,400 paid out to make the videos means.....

These people are getting their asses handed to them! Also factor in about $5000 to $10,000 a month to keep all those servers cookin.

I am probably way off on my revenue numbers but still seems upside down.

Guess they are just waiting until Google, Microsoft or Yahoo picks them up for a cool Billion.

Then they are all good.

[Walt Mann]

You got me thinking on how to figure this out - and I did some more investigating. I think they pay $300 a day to the filmmakers, and for that day's work they expect something like 10 short 1 minute films, so you can divide the costs by 10.

Also, if you assume they are doing a revenue sharing arrangement with Google, they get paid per click - so then the numbers come out to something like $500,000 in revenue for $80,000 of film costs. If the numbers are like that it could work.

The big question though is are they really making that kind of money on the Google ads? And what is their actual overhead?

[Matt Kern]

yea, I realized later that my number of videos needed to be divided by 10.

Is the revenue sharing how most sites with adsense get paid? I used to know this but I have forgotten.

[Sean McMenemy]

I'll take a look at them. But I think it's called peer production. I'm sure most of those videos are produced by fans of the kite or the thing they are using. So if each fan makes something then you get a ton of videos. Now the kit company has something to show off and worth talking about. It made you look for it.

People want to talk about the things that they enjoy or hate. But if you make the ones that like your stuff talk you are set.

[Rob Herman]

Yeah, it seems like the people who are making money is the filmmakers, which is fine by me. It seems that a better business model would have been to get all the videos on a non-exclusive, profit-sharing model, than you wouldn't have to pay out anything up front to the producers, and pay out to them depending on how many views, clicks they receive - similar to REVVER, etc
http://www.solutiongrove.com/blogger/one-entry?entry_id=405233

But if they get bought fo a billion bucks then I guess 800k is a drop in the bucket