Some Online Business Models Still Suck

If there’s one venue still offering handsome paybacks for hungry entrepreneurs, it’s the Internet. Bloggers, affiliate network members, even eBayers still find jackpots online.

That doesn’t mean that every online business model makes money. Far from it–some online business models just plain suck. Take the online video show. The daily/weekly show model works wonderfully on network TV, but has been a much harder sell online.

The PopCrunch video show is the latest video show to be interred into the online media cemetery. Sarah East’s snarky, tabloid-style commentary show didn’t draw the viewership and high-paying advertisers required to keep the show going. It joins this year’s other major casualty–CBS’ Wallstrip–in the backwaters of cool concepts that couldn’t stick around.

Ryan Caldwell, head producer of the show, says that most of the PopCrunch videos weren’t getting enough traffic. “We needed to hit the 500k views per month threshold and were only at about half. Even then, we would have just been breaking even.” The videos needed more traffic to interest high-end advertisers, whose business would make the venture more profitable.

“To reach profitability,” says Caldwell, “we really had to see each show hit about 100k views in its first month. We were only doing about 1/3 of that.” He adds that they did have 18,000 subscribers, and that some shows were viewed almost 1 million times. “That’s amazing to me,” he says.

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When asked what it takes to produce a successful online video show, Caldwell said that the concept needs to appeal to a wide audience. “It helps if it’s funny. Then you need on-air talent, a script writer, a director/producer, some solid video equipment and if you do a show like the PopCrunch Show, you need to record in front of a blue screen so it helps to have a studio.”

He thinks that most people who are doing video aren’t doing it very well. “The main issue is that it costs a lot more to produce and its much harder to monetize. I think it’s only possibly viable if you go at it 100% without distractions or projects. This is even more true if you are bootstrapping the whole thing and doing the work yourself to minimize costs.”

“I think the cost/benefit for video pales in comparison to traditional online publishing,” he concludes. Even online, state-of-the-art does not automatically lead to profit.

Au revoir, PopCrunch video show.

Written by Drea Knufken

Drea Knufken

Currently, I create and execute content- and PR strategies for clients, including thought leadership and messaging. I also ghostwrite and produce press releases, white papers, case studies and other collateral.