Online video isn’t a busted flush, but it’s not a royal flush for publishers either

In response to a Mumbrella article asking whether online video for publishers is more costly than revenue rich, Dallas Baird explains the ecosystem and pitfalls facing publishers in the space.

A Nordic lad calling himself ‘Pewdiepie’ has a good little thing going. He delivers a skad of pretty simple gamer related videos through his YouTube channels that show hacks, cheats and game vision of new releases. His shtick is carrying on like a pork chop while opening up the world of gaming to the devoted.

I once showed one of his videos to a room full of ‘legacy media’ staff at Bauer. A colleague from a long print background asked pointedly ‘Who watches this shit?’ Answer: Seemingly everybody.

As of 7:36 AEST last night, the goofy little Swede has logged 47,912,476 subscribers to his totally free YouTube channels and has shipped 13,310,034,708 video views to his fans.

Think on that. That’s the equivalent of everyone in Australia subscribing twice and almost everyone on Planet Earth watching one of his videos – twice. More people have watched a video from this kid than will ever watch Australian films. Impressive stuff. These numbers have propelled him to the digital demigod status of social media influencer. God knows what he earns.


He is the dream. Massive audience, massive reach, massive influence and the dollars that go with them.

It is a fact that, if you get it right, digital video can create massive audiences, build a cast iron brand and rake in huge revenue. It is also a fact that, outside of viral sensations like Pewdiepie, success in digital video involves a complex mix of content, brand, technology, sales, partnerships, experience and plain luck. The proliferation of digital tech like smartphones with their ever more impressive cameras held out the promise of ‘everyone being a journalist, photographer and film maker.’ That was, of course, balderdash.

Popular video content remains time consuming, expensive and elusive. For every one Pewdiepie, there are thousands of pretenders who have not and will not make it to digital Nirvana.

Unfortunately, most familiar media brands fit into this band.

For the mere mortals of the publishing industry, success in digital video involves showing as many videos as possible wrapped in ads. Some companies have a branded video and native advertising as part of the mix but are having moderate to zero success with this as a revenue raising effort. Volume is the main game and you need a few things to achieve that.

You also need a content distribution network to send those videos out. Companies like Brightcove, Ooyala and Kaltura will send your videos to whoever requests them wherever they are and to whatever platform they are viewing on, for a small fee. Given that you need to ship hundreds of thousands of videos for it all to work, those small fees become big ones very quickly.

“Well,” you ask “we could just put vids out on YouTube, like Pewdiepie, right?”

Wrong. Unless you are some kind of behemoth like CBS, all YouTube users are beholden to YouTube’s commercial and advertising set up. In short, YouTube sells the ads, runs the ads, keep their share and cut you back the rest. On a good day, this can be $5 per thousand views.


Social platforms like Facebook, Twitter and Instagram love video with a passion. Audience can be generated very quickly and views can be enormous. However, they generally won’t let you run ads against your content and native advertising content is governed by strict rules that actually repel most advertisers. At present, the social platforms get all the content they need without having to offer any advertising dollars to publishers.

This, of course, is a problem for said publishers.

However, if you have your own video set-up and can entice users away from social and search to view video on your pages and apps, a well regarded brand can get up to $50 per thousand views, sometimes more. This is what the fuss is all about.

Those yields are easily the biggest in the whole digital ad market. They are also stubbornly resilient, unlike banners and buttons whose value drops daily. For some reason, they are far higher in Australia than in most other territories. For struggling publishers, they hold out the dream of being the new rivers of gold.

Then there is the question of how will you present the video in your pages or on your apps.

Most of the tech partners offer a compelling array of players and galleries that will play a video surrounded by related content, automatically pushing to more videos when you have finished viewing your original selection. The problem is that the players have to be coded into the page or app, QA tested, and rolled out.

Dallas Baird

Dallas Baird

Someone like Bauer operates numerous sites and apps across many CMS systems. If you want to switch to the latest and greatest autoplaying gallery player that serves recommended videos until the cows come home, you need to implement this on every single system. The QA for this alone can stretch to weeks.

This can make product managers very conservative in their choices of video presentation.

You’ll also need to serve ads. Most publishers are doing this through Google’s DoubleClick For Publishers (DFP) platform. DFP receives calls for ads from your video player, sorts through the inventory of ads available and plays the optimal ad out to the user. Hopefully they will sit through all this while eagerly awaiting their video. Google, of course, take their cut.

The ads can either be sold by your own sales force or purchased in ad exchanges in an arbitrage model. Your own sales force will get you a higher yield, but you are paying all the salaries, whereas the arbitrage model means you have to split the returns with whoever initially owns the inventory. Most publishers now operate a combination of the above.

Someone will also have to manage the ad traffic so that campaigns get filled and as many slots get filled as possible – another salary.

We haven’t even yet discussed content creation. You can make your own, which requires talented, motivated and multi-skilled staff with editorial, creative and technical minds. Digital video’s older cousins film and television set up clear demarcations between producers, camera crew, soundies, presenters and reporters very early on.  Crew will tend to be stronger in one area. Not so in lean digital video. As a Video Journalist, I was almost always the producer, camera guy (and soundie), presenter, writer, editor and web producer for pretty much everything I did. This isn’t unusual.


You will need inventory and lots of it. Displaying videos on all your stories and pages as well as galleries requires a plethora of individual video assets. This is where the clickbait and quick and dirty videos come in. It’s fast, numerous and easy – and you can stick an ad in front of every one of them. The longer form stuff and the native advertising vids just won’t cover the number of assets you need.

Cloud based services like Wochit that offer production of quick and easy video are starting to appear. You guessed it, they also take their cut.

You may have some great licensing deals for extra video content from other producers, but the revenue share or content fees that come with these deals reduce your margins before you have shipped a single video.

In short, digital video for everyone who isn’t Pewdiepie (which is basically all of us) is a tough nut to crack. Commercial gains are usually offset by an added expense in people, gear, partnerships or tech. The competition is global, local, large, small, professional, amateur – ubiquitous.

So is it a busted flush? No. Not even close.

Video done well can be as thought provoking, engaging and effective as any writing, pictures or audio – often more so. It can also cover its costs and move into profitability, but not immediately. It’s a growth process, but aren’t most enterprises?

I would just ask the C-suite types to have a far more realistic expectation of what they want to achieve with digital video.

If you are a legacy publisher or broadcaster and you are thinking that you’ll buy your editorial floor iPhones, hire some kid who seems to know a bit about it and think you’ll be Channel 7 by next Wednesday, chances are you are headed for disappointment.

If you think you can restart the rivers of gold with a YouTube channel, you are mistaken. If you are currently attempting these, do plenty of stories about Centrelink because that’s where you are headed.

If, however, you think you may want to establish a digital video capability that might well be able to pay for itself reasonably quickly and then grow to be a major arm in your audience building and story-telling capability for your assets as well as social media, you might be in the right head space. Just make sure they also provide cheaper and dirtier content that ticks over the ad revenues and might just nail the odd viral.

It is clear to me that for digital video to be a success for the rest of us, it needs to be a lean and agile operation that can produce thoughtful, capable brand and reputation building content, but also be able to address the volume requirements of the popular commercial content that drives the ads. This means being shrewd with hiring and training but also in managing teams so the burdens are spread evenly. A fine balance of quality content against the commercial gear, all the while building capability, audience and revenue.

A lot to ask for sure, but isn’t that how the papers, mags and TV channels did it back in the day?

Dallas Baird is a video strategist


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