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Making Money from Streaming Video: Here's How

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The streaming video content produced by St. John’s is broadcast quality: The university does live-switched three-camera shoots from its campus facilities. These are anchored by color and play-by-play commentators and dressed up with on-screen graphics and slow-motion replay.

The content is streamed using one of two NewTek TriCaster production units—either a TriCaster TCXD300 whose HD signal is down converted to SD or a TriCaster STUDIO in native SD. The programs are also recorded live-to-disk for on-demand highlight packages after the event. “Our on-demand videos are free to anyone who clicks on them,” Fratto says. “These highlight packages, interviews, news conferences, coaches’ shows, and feature stories help generate interest in our live pay events and serve as promotional tools to get more exposure for our athletes.” St. John’s University currently has “thousands of paying subscribers,” according to Fratto. However, although “the revenue generation is nice,” the real benefit to this model is that it helps St. John’s “tell the stories of our athletes,” he says.

Here’s the situation: St. John’s University is vying for eyeballs in New York City, one of the world’s most sports-saturated marketplaces. With the vast number of St. John’s alumni living in and around the Big Apple, online video helps the university generate excitement in order to help drive enrollment, donations, and endowments. But getting in-depth coverage on mainstream media can be a profound challenge in New York City because there are so many colleges and professional teams competing for the same limited airtime and column inches.

Thanks to streaming media, plus the many other features offered at www.redstorm sports.com, St. John’s now has a dedicated medium over which to tell its athletes’ stories, in all the sports they excel at. Better yet, it doesn’t have to compete with anyone else in this space, and this space is globally accessible via the web. “We can really show what we do as an athletics program using the kinds of live broadcasts, highlights packages, and other sports features that fans have grown up with in broadcast TV,” says Fratto. “Add the fact that our broadcasts are becoming more and more professional and polished—we aim to someday be as good as ESPN in our presentation—and the credibility that our streaming product imparts to our content speaks for itself. So everything feeds everything else, resulting in a product that hopefully excites our alumni, promotes our athletes and teams, and helps our university as a whole.”

Down the road, St. John’s hopes to generate extra money by adding third-party advertising and sponsorship to its video platform. But in the interim, the live monthly subscription business model is delivering results—and underwriting the streaming media’s production costs. “We have found a model that works well for what we are trying to achieve at St. John’s with video,” Fratto says. “For $9.95 a month, our fans get all the Red Storm action they want—and then some.”

Streamin’ Garage Looks to 1950s’ TV for Money- Making Inspiration

Imagine a time period when TV shows were all produced live in studio, bolstered but not dominated by prerecorded shorts and movies. Even when recorded, these TV shows retained that multicamera unscripted feel that “anything could happen” ... and frequently did.

Well, in the case of Streamin’ Garage (www.streamingarage.com), this time period is now. The streaming media site created by Mike Rotman (known for his work on Politically Incorrect with Bill Maher, South Park, and The Simple Life) relies on six-camera HD studio shoots to create its popular shows. They include Stupid For Movies (film reviews), Stripped Down Live (music performances), Stupid For Fantasy Football (sports), Stupid For Dexter (everything about the cult TV show Dexter), Super Scary Horror Theater, and Wide World of Warcraft (fantasy talk show set in a live virtual environment). The video is served out using a NewTek TriCaster.

As for market success: Streamin’ Garage has achieved more than 4 million live views and is now syndicated to blip.tv, Boxee, Roku, Samsung/Sony TVs, TiVo, and YouTube.

So how does Streamin’ Garage make money from its streaming content? “We don’t,” replies founder and CEO Rotman. “The honest answer is that right now we are not in the money-making stage—even though we do generate some revenue from Google ads. Instead, what we are doing at this point is still building our audience, to demonstrate that this form of webcasting can be a very popular medium.”

In doing this, Rotman is targeting sponsors; just like the kind who sponsored TV in its early days (and still do). “Our shows are produced like conventional TV programs, with breaks where commercials can be inserted,” he explains. “In doing this, we are going back to the early days of broadcast television, where commercials were everything. I mean, in those days sponsors often paid for mentions throughout the entire show—and put their name in the title—rather than just buying 30 seconds there and there. That’s something we want to revive at Streamin’ Garage. That’s a model that we think can work for us.”

Rotman hasn’t been possessed by 1950s’ advertising nostalgia in picking this approach. Instead, it is his attempt to attract the vast majority of internet surfers, who notoriously hate paying for content. “If you put up a product for free, build [an] audience and then try to charge for accessing it, people get mad,” he says. “That loses you the audience you worked so hard to build; it just doesn’t make you money. In contrast, ‘free’ TV has succeeded for decades by relying on advertising revenues rather than subscriptions. The fact that broadcast TV has lost viewers to competition is only a comment on free TV’s content quality, not the medium itself. As the Super Bowl proves every year, if your broadcast content is truly compelling, people will watch it— commercials included.”

This said, Rotman has found one way to get viewers to chip in, namely by running an “Oscar Pool” on Stupid for Movies. “The viewers who wanted to play sent donations via PayPal, and the one whose predictions [came] closest to the actual Oscar results won a bunch of DVDs,” he says. “Some paid $10, while many paid more upwards of $100. It was then we knew we had built an active [community, a] strong fan base who loves our shows and want[s] to see more. The bottom line: They were happy, and we made some money from the pool. So everybody won.”


blip.tv, Funny or Die, and St. John’s University have found streaming media business models that work for them.

blip.tv’s adoption of the standard broadcast TV model is making money for the site and its program producers. Its success proves that old business models can become new again, when applied to new markets.

In the case of FoD, it is the site’s free short- form comedy that drives revenue generation from advertising, branded content, and premium longer-form programming. For St. John’s University, the sales angle is exclusivity: If you want to see the Red Storm in action and live, you need to subscribe to its website.

It remains to be seen if Streamin’ Garage’s sponsorship model will succeed. However, the 1950s’-style TV model being applied by Mike Rotman—build the audience numbers, and the advertisers will come—seems to make sense. The best news for advertisers is if Streamin’ Garage’s viewers are tuning in live, they have to sit through the commercials.

Just as we went to press, Streamin’ Garage launched an online fundraising campaign on www.kickstarter.com. The goal is to raise $20,000 for new production by offering a range of gifts for people who pledge money. A $25 pledge gets the donor a place in his or her favorite show’s credits plus a thank-you email card, while $75 gets these benefits plus a backstage tour via private Flickr account. The prizes go up from there. For a gift of $5,000 or more, Streamin’ Garage will make you executive producer of your own show.

The final conclusion: The range of content delivery models possible on the web means that more than one business approach can work here. Whatever model is chosen, it is vital not to smother the content it is trying to profit from. 

This article was originally published in the August/September issue of Streaming Media magazine under the title "This Year's (Business) Models."

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