Keith Richman isn’t looking for hits. Instead, the CEO of Break Media wants a steady stream of chuckles from Jackass-like shorts made by and for his target audience young dudes. Said videos are played on flagship site Break.com and three others, as well as an ad network Richman says reaches 35 million uniques. Richman’s willing to pay for his content, too, but not much: Rather than pony up for Quarterlife-style series, he’ll pay $200 to $600 per video from his submitters, plus a revenue share for certain clips. He explained his model, and how he thinks he’ll survive in a video landscape dominated by YouTube.
Silicon Alley Insider: What’s wrong with trying to find a web hit?
Richman: We are not trying to be a hit-driven business. That’s a television model. We are trying to be consistent entertainment for a very focused demographic. I think on the Web that’s more important for the state we’re in. Obviously we’d like to have more hits, but that’s not what we’re going for.
SAI: Why do you think so many high-profile web series have been commercial disappointments?
Richman: I don’t think anyone is going to get rich doing an online video series in the next 3-12 months. But overall there is a lot of money to be made and a lot more people are going to make money. We had a guy in South Carolina make like $5000 from us in January. That’s a lot of money for a guy just shooting in his neighbourhood. There’s going to be a wider swath of people making money and I think in a couple of years there will be more money there for a hit.
SAI: How do sites like yours survive in the era of YouTube?
Richman: I sort of think the game is over. YouTube is the video distributor for the general population–they won. I think there will be a broad shakeout of companies that don’t provide a value proposition to the user or advertiser. I feel like we’re pretty good at men. Collegehumor is pretty good for college. I think for people trying to aggreggate a general video audience–it’s going to be hard.
SAI: Do you expect to see consolidation?
Richman: I don’t think this year there will be a ton of consolidation. Everyone who is trying to get to scale still believes they will. If you look at our demographic, they are watching a lot of video online–spending a lot of time on the Internet. They are spending a huge amount of time online and every year it increases. It’s not going to be switching back.
SAI: What do you think happens with online video in the coming year?
Richman: The biggest thing that’s going to happen this year is dollars are going to shift from TV to online video which is going to create a whole spectrum of things. One is people are going to pay more for original content. Two is advertisers are going to get more comfortable with the medium and they’re going to test new ad units. Certain ad units are going to become standard. Those two things by themselves are going to be meaningful drivers to more content. Content usually drives users. So it’s another nice cycle.
SAI: When does video advertising start having an impact?
Richman: Google integrating video ads through AdSense is going to help. They are going to push the needle as far as convincing advertisers. They have a sales force out there telling advertisers why it’s awesome. That’s going to help a lot. I think what’s going to happen is it’s going to take another giant step toward maturity. More people are going to experiment. There are going to be more results, they will be more measureable. Suddenly, there’s going to be a real legitimization of online video as both a content and as an advertising medium.
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