In a recent interview, Rocketboom founder Andrew Baron said that he's thinking again about the idea of charging for the shows content. He expressed frustration concerning advertising not providing the revenue he had hoped it would.
Talking about viewers paying for content, Baron said the usual mantra of content producers: "If we had 5% of our audience paying $5 a month that would be $50,000." The problem is that he hasn't heard about anybody that has made that work. Unfortunately he than contradicts himself saying, "If we were to start charging for the extra stuff, what kind of message are we putting out about what we're (already) doing?"
When asked about product placement being an option, he added, "... we do value the information. We don't want to do that and confuse and devalue the integrity of the audience."
Looking at that last statement, it doesn't even make sense. How do you confuse or devalue the integrity of an audience with product placement?
He's having a similar problem that YouTube is having with looking at their customers. The viewer is the end-user of course, but if you're trying to make money through an ad model, you must also consider marketers as your customers as well. This mythical user-experience thing could only be made by someone that doesn't understand business. The idea that there is a place of perfection in online video, and that line can't be crossed, is an illusion that companies that hold to it will eventually learn when they can't make money through their sites. A large number of marketers won't work with YouTube because they refuse to consider them as important a customer as YouTube's end-user.
As far as advertising in general, Baron said that although the show attracts and average of 200,000 shows viewed a day, marketers want a lot more scale than he has to offer.
At this time when pressed, Baron says that Rocketboom is now considered a loss leader (another way of saying he doesn't know how to make money with it).
But, it is a good point as far as using a Web site to open up other doors for you. The expertise Baron and his team has in making online video, has resulted in consulting jobs and creating projects for others. One of the big ones he's gotten is creating a video blog for the John Edwards Presidential campaign.
While I don't like how he's looking at the way to build a business built for revenue generated by ads, I do like his secondary business that's emerging out of the first. It is a good idea to keep in mind that many people and companies really don't know how to do a variety of things online.
If you look at secondary revenues that can emerge out of the primary business you do, it's surprising the money you can make when you see the various skills you and your business have acquired, and look for ways to market them.
Concerning the problem of making money with Rocketboom, he's either going to have to change his way of thinking, or the project will be a perpetual loss leader.
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