Net profit for a typical VOD project can be expressed as:
(Total Paying Customers * Download Price) - Expenses
Expenses might include everything from payment processor and distribution overhead1 (as much as a staggering twenty percent of gross or more), Superbus tickets, Happy Meals, jean-print tights, ironic haircuts, fisheye lenses, Gulfwax, du rags, Ibuprofen, sunglasses, forties, etc.
It's fair to place a hard upper limit on the current number of potential paying Aggroblading video viewing customers somewhere around 5,000. Figures provided for recent superstar productions make this bound optimistically safe. Actual paying customers, however, are nerfed by indifference, borrowing and an understanding that videos are always eventually released free of charge. The obvious reason folks are able to sell any downloads at all in a buy-before-you-try scheme is rep.
In fact, the only content creators with a chance at earning much under this model are those already in possession of entrenched reputation. Brand Name Pro produced by Well-known Vid Guy might sell a couple thousand dollars in downloads worth of average-quality content, while outrageously amazing section2 from Unknown Dudes or even marginally well-known bros wouldn’t likely sell fifty. VODs are effectively pedaling expectations as a form of disposable, branded consumption. This isn’t to say that VOD deviates from the historical blade video status quo significantly; just that selling a video as a relative unknown simply means that few will watch your movie.
The frequency with which Brand Name Pro can release paid content represents another sales bottleneck. Even the Hottest Pro can’t expect to prop up decent download numbers if she releases more than a couple solo video products per year. Likewise, Well-known Vid Guy probably won't rake in as much if he drops more than two full-length movies annually. There's no evidence supporting this assumption, other than the fact that this imaginary limit has yet to be tested.
In turn, the best-established content producers are further dividing a narrow audience in exchange for several hundred to a couple thousand bucks per year with diminishing returns. Returns are guaranteed to diminish because we're producing highly specialized content for a generally impoverished3, small and potentially shrinking group; because VOD salesmanship is grueling, and since third parties are collecting fifteen or twenty percent (and growing) of the take that's traditionally been captured by shops and Video Action Sports.
Clearly, this is a scenario where neither producer nor customer nor rollerblading shop is particularly well-served.
All of this goes without saying whether content producers should be compensated for their work. If rollerbladers want money instead of rep for broadcasting hardcore aggressive inline action, they should be able to cash out to the extent that the audience is willing to pay for it, and right now that means a small percentage of the potential total number of viewers. A lot of lesser known folks should get thrown a bone too, but with the current regime it’s not feasible to sell a repless video. In the era of physical media, marketing a few dozen copies of a small project was viable, but those customers probably also represented nearly the entire collective viewing audience, which is now easily amplified by orders of magnitude for "free" releases.
That so much excellent video content is now released free of charge (a lot of it by zeros, not heroes) and stands no chance of selling downloads stabs at the heart of discontent with the buy-before-you-try format, viewed resentfully by some as a form of seignorage. Currently, top dawgz get thrown all the bones, but their supply is increasingly scarce.
This also flies in the face of 2015 niche web media norms whereby a creator releases videos freely and Google, Interactive Corp, Facebook, et al. make all the money, control the content as their own (even taking literal copyright ownership via TL;DR) and plunder the audience.4
So how could the current situation be improved?
- Magically increase the viewing audience by tenfold or more;
- Producers could monetize “free” video content played on their own websites, themselves leveraging ads5
- Watch lacklustre VOD numbers slowly collapse, and earn reputation (not money) for edits6
- Encourage and facilitate low- or no-friction tipping;7
- Enable DIY/blade shop vid distribution and forgo payment/video delivery cartels
It would make sense to run your own video delivery if you already sell rollerblading stuff online. Without such a presence or know-how, productized downloads could otherwise be enabled through conventional video revenue sharing partners like skate shops, all of whom certainly operate well-oiled online store and payment processing machinery. And it'd be keeping all that money within the industry.
EDITED TO ADD: The last suggestion might be too complicated for brand owners to implement, but surely there are shops that wouldn't mind recapturing a chunk of the video revenue that's vanished over the last decade?
- Which, to date, are always PayPal, Vimeo and Sellfy fees. These constitute 15-30% of a product's gross. ↑
- Where "outrageously amazing" is defined by your personal taste and criteria ↑
- OK, maybe this isn't entirely true. Rollerbladers are definitely wealthier than they've ever been, and this trend should continue as the mean rollerblading age advances ↑
- Google sometimes makes a gesture to outrageously popular channels to the tune of a fraction of a fraction of a percent in ad revenue. They of course profile the entire audience using their correspondence, search history, shopping interests, driving behavior, location history, sleeping habits, estimated stomach contents, etc. Interactive Corp, owner of Vimeo, also operates a bunch of dating websites and assorted bullshit properties like askjeeves.com. They partner with GOOG and somehow even manage to get users to pay them. ↑
- Admittedly this wouldn't amount to much. We're probably talkin' maybe forty bucks total via AdSense for a video with 15k views, or possibly a couple hundred for a few garishly animated banner ads? HEY, it's better than nothin'. ↑
- Frank Stoner made the observation that edits have become “Rollerblading’s currency” in How To Be Unpopular Podcast episode #202 at ~75min. It's clear that once you accumulate a certain amount of rep, you can opt to convert dividends into cash through VOD up to twice per year. Relative reputability sets the distribution amount. ↑
- This might be enabled by an uptake in cryptocurrency use, and could eliminate payment processing and AWS account download link middlemen altogether, but I don't think rollerbladers are ready for this. ↑