A senior citizen vlogger with a handlebar mustache pitched The Observer on his idea, a men’s grooming series, focusing largely on ornate facial hair. “Getting into the market is easy, because anyone is a publisher today,” he intoned. “Making money off of your ideas, that’s another story.”
That seemed to be the rub at this conference, entitled The Future of Digital Hollywood. “People think you’ve got great content, that will be the key,” said the panel’s host, Gary Delfiner, SVP at Screen Media Ventures. “But the whole mentality, build it and they will come, that doesn’t work anymore.”
Delfiner took a dramatic pause, or perhaps just a deep breath. “But for those of you who think there is no business here, well just take a look at Dina.”
Dina Kaplan, co-founder of blip.tv, smiled, cupping her chin in one hand. Blip is a New York based network for independent web shows ranging from videogame strategy seminars to tween singing sensations. “I can tell you that our tops shows are now pulling in hundreds of thousands and we expect that to be millions this year,” Ms. Kaplan said.
Ears around the room perked up. “For a long time people thought of us as the little engine that could,” she went on. “But this is the year people are going to realize we’re serious business.”
When it was founded back in 2005 blip had a simple thesis. There would be a huge market for a network of independently produced web series. This, of course, was a longstanding dream. Josh Harris had tried and failed with Pseudo back in 2000, despite telling the major networks on 60 minutes that he was coming for their heads.
“If you looked at the market back then, there were a lot of companies in the space who had raised gobs of money,” says Blip co-founder and CEO Mike Hudack. “But then we Youtube took off, their boards started pushing them to be “me too”, and chase the viral video world of dogs on skateboards.”
In the beginning the founders kept their days jobs and paid the bandwith costs out of their own pockets. “There was really just one web show at the time, Rocketboom,” says Kaplan, “So the whole thing was kind of built on a dream.”
Warren Lee, a venture partner at Canaan specializing in video, passed on blip when the company pitched him in 2008 but invested 18 months later. “It became clear that they really understood where they fit into the market, and that this was a business with a ton of potential to scale,” says Lee.
This year of blip’s more than 50,000 shows will earn six figures, enough to pay full-time employees and health insurance. In 2010 the company saw its ad revenue increase five fold and expect that to double or triple again this year.
The recent acquisition of New Next Networks by Youtube north of $40 million has put the spotlight on the business of original content for the web. “For a while everyone was focused on the bottom and the top,” said Ms. Kaplan. There were the amateur videos on Youtube which might go viral and there were the well produced corporate shows which got funneled to Hulu. “Now people are beginning to see that the value in the middle of that pyramid.”
The key to this success has been scale. blip does 140 million video views a month on 33 million uniques, with the average viewer sitting down for a 25 minute session. Shows on blip end up pretty much anywhere the eyeballs are, from Youtube to AOL. Ad revenue is split 50/50 between the folks producing the programs and blip. Even with their size , however, blip has no interest in producing its own content. “We’ll never play in the Hulu sandbox,” says Kaplan.
The independent ethos is a key part of the success of programs on blip.tv. The most popular show on the network insists on keeping its growing business private. “I keep encouraging them to tell people about it,” says Kaplan. “But they feel like they might lose of their street cred with the fans if viewers knew they were making $450,000.” The joke around the blip office these days is that the stars of the network are now earning far more than the execs, says Kaplan. “But that just means we’re doing our jobs right.”