OCTOBER 30, 2006
Technology
By Catherine Holahan
Don't I Know You from the Internet?
Some performers are parlaying online celebrity into deals with big media. Soon they may be able to just stick to the Web
The small screen has always been a launching pad for big stars. But for some would-be famous actors, musicians, and comedians, the Web is replacing television as their vehicle to stardom. Through online videos viewed by millions daily, these emerging Web stars are developing loyal audiences that even television personalities would envy.
This week, Amanda Congdon, former host of video site Rocketboom, will announce her new gig as a media correspondent and weekly video blogger, or vlogger, at one of the three major television networks. Congdon, who will continue serving up videos on video-sharing service blip.tv, won't identify her new employer. But it's clear her Web videos have generated enough buzz to land her a job on a major network. "The Internet has been the reason for my career," says Congdon. "I was a relatively unknown actor in New York City when I started Rocketboom."
Web-based Fame It used to be that only tech entrepreneurs reaped Internet fame and fortune. Now the Web is not just a stepping stone to more traditional forms of media but has also becoming a lucrative end unto itself, providing a steady source of income in the form of advertising revenue and licensing fees from Internet media companies.
Take martial artist Joe Eigo. The 26-year-old Toronto native began making demo tapes of his acrobatic fighting style to send to action movie producers. But it wasn't until he put the videos on the Internet that he received any significant attention—or money—for his work. Two months ago, he sent one of his tapes, Matrix for Real, to Metacafe. It has since been viewed 4.5 million times on Metacafe alone and has earned Eigo $23,000 in licensing fees. "The Internet is really the way to go," says Eigo. "There are no borders like when watching television. You have access to the world."
Eigo was paid under a one-month trial program on Metacafe, one of the largest independent video sites with more than 16 million unique visitors and 550 million page views each month. (Only YouTube, the video startup soon to be acquired by Google (GOOG), boasts greater stats for an independently owned video site.) On Oct. 30, Metacafe is expanding what it calls the "producer rewards" program to include its entire user base. Under the terms of the program, the site will pay independent video producers $5 for every 1,000 impressions their video receives after it is viewed an initial 20,000 times. In exchange, the users give Metacafe the non-exclusive right to show their work and sell advertising on and around their content.
The program is among the first of its kind. Other sites, such as Revver, append pay-per-click advertisements to the end of videos and then give the creators 50% of the revenues (see BusinessWeek.com, 8/11/06, "Revver: A Video Sharing Site on Pause").
Business Models Metacafe CEO and co-founder Arik Czerniak says many more user-generated content sites will pay creators in order to encourage top-notch content and serve ads without fear of running afoul of copyright laws. "The only way for this video format to mature from silly viral videos and lip-synching into something that is more professional and high-production value is to pay creators," says Czerniak. "Once you start [paying people], there will be a real renaissance in content quality because they will start competing for the ratings."
The ratings competition is already under way, with many video creators just now figuring out how to turn large audiences into large paychecks. David Carson, co-CEO of video-sharing site and broadband channel Heavy.com, says that he is seeing more people who are uploading professional-quality, edited videos intended to attract advertisers as well as audiences. "A lot of people are starting to get hip to the fact that they can make a living doing this online," says Carson.
Kent Nichols, co-creator of the popular Ask a Ninja show on Revver.com and other sites, has inked advertising deals with companies such as Sony (SNE) who want to get in front of the 300,000 to 500,000 mostly young male viewers who watch his show. "We are creating a brand new channel for advertising that is valuable," says Nichols. "It is starting to become an actual business." Nichols also sells merchandise such as T-shirts related to the indie online hit and has a DVD of episodes coming out in November.
Advertisers Still Shy The big question for advertisers is how valuable is this new medium? Advertisers are concerned because of the difficulty of knowing just how much of an individual video celebrity's audience is real. There are competing metrics for measuring traffic and, often, the numbers given by one firm, say a Nielsen//NetRatings, are different than those provided by another, such as comScore (see BusinessWeek.com, 10/23/06, "Web Numbers: What's Real?").
"It's incredibly hard to tell [how popular a particular Web program is]," says Hosea "Ze Frank" Frank, the host of the popular video blog The Show with Ze Frank. His show has an audience of 30,000 to more than 100,000 viewers per episode, depending on who you talk to. Surprisingly, Frank himself puts the number at the low end. He concedes it is also difficult for advertisers to tell the worth of that traffic. Advertisers typically judge worth by how targeted and engaged the audience is—a difficult metric to verify both on the Web and with more traditional forms of media.
Frank has been sponsored by companies such as domain registrar GoDaddy.com and receives advertising revenue through Revver.com and an online advertising supplier. He also started a service that allows users to post 50-character messages on his site for a fee. Frank believes that once advertisers become more comfortable with the online space and measurement tools, video creators will be able to support themselves in several different ways including licensing agreements, advertising revenue-sharing agreements with host sites, and straight advertising deals. "I think there are a few different business models that are going to emerge in this space," says Frank. "We are really in the middle of figuring all that stuff out right now."
Springboard to Stardom The emergence of viable business models for Internet content producers doesn't mean that "cewebrities" are giving up dreams of breaking into traditional media. Both Frank and Nichols have signed with United Talent Agency, which represents film stars such as Vince Vaughn and Jack Black. The agency is using the Web to find up-and-coming stars for both traditional media and Internet outlets. Nichols' Los Angeles-based company, Beatbox Giant Productions, has signed a deal with Atom Films to work on an Internet movie project, Kinzai Ninjas that he hopes will lead to more film work both on the smaller screen and elsewhere. Eigo's online films scored him a spot in a Jackie Chan film, and he hopes the attention will lead to future work on the big screen.
Actors are not the only ones using the Web as a launching pad. This month, comedienne Sherry Sirof began releasing a series of Web videos on Heavy.com in conjunction with a competition to be the most popular online female video blogger. If her blog, Zilchnerd, wins, Sirof will get a BMW Mini Cooper (BMW) and, potentially, enough media attention to further her stand-up career. And if she doesn't win, Sirof says she could see making a name for herself—and money—online. "I think you can definitely have a career online now," says Sirof. "[Online stars] may not be as credible right now as sitcom stars, but they are definitely known and they are stars and get paid money to be seen."
Steve Garfield, one of the original video bloggers, is one of the online stars who gets paid to make appearances in the real world. Garfield now supports himself through video blogging, speaking engagements, consulting, and Web video production work—all bolstered by his online fame. His shows, including the Carol and Steve Show that he runs with his wife, receive more than a thousand hits per day. "I am not generating a ton of money off the advertising," says Garfield. "It is just something to cover the hosting fees. The speaking and consulting on video blogging complements it."
Clearly, those who have achieved some measure of online stardom are not idly soaking up their 15 minutes of the limelight. Who knows, maybe one day there will be a twist on that old saying about New York: If you can make it on the Web, you don't need to make it anywhere else.
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