Facebook Live & YouTube as a supplement rather than a competitor to Odd Networks

This post is related more to new media content creators and less to the traditional studios and networks that are creating long form content.

One topic that I hear often when we are pitching content creators that already have built a brand in social networks is why would I leave YouTube or Facebook Live and try and build the entire product on my own?

Since YouTube gained its popularity, content creators have learned that they can grow a brand and actually make money by putting videos on their site. At first these were “cat” videos, and content that was short form comedy or educational content. In recent years this arena has grown as YouTube has become a medium of choice for younger generations.

When a video could go “viral” and get thousands of views, a content creator could potentially make a few thousand dollars a year. Now, although the YouTube ecosystem has grown and become its own industry. Some personalities have become so popular that they are making tens of millions of dollars and creating YouTube content has become their full time job.

YouTube, by itself, has created an industry that now competes with other billion dollar businesses. Nowadays, a personality or influencer, as they have become known as, can choose one of many options. YouTube tends to be the standard, but Facebook Live has started to creep in. If you’re into gaming, then Twitch makes the most sense. These personalities can now choose from these many platforms based on which gives them access to an audience most likely to enjoy their content.

So let’s go back to the question that we get all the time.

Why as a successful creator would I ever risk leaving YouTube and build my own marketplace?

The answer is you shouldn’t choose between one or the other. In fact YouTube, Twitch, and Facebook Live are great platforms that allow a content creator to start sharing and making money with little startup cost. These platforms are a great starting point for creators that are new to the industry or a great marketing tool for those that are looking to build their existing brand.

Built in audience

The best aspect of these streaming platforms is that each already has a built in audience of millions of viewers that are always looking for new content. Any business at the end of the day is a marketplace. There is a seller and a buyer and these platforms allow you to get started as a seller with an audience that requires no marketing or effort to gain access.

Growing not shrinking

Unlike the world of cable television, these platforms viewers tend to be younger. This means that not only are they not shrinking, but each year they gain more viewers that are in theory gaining more purchasing power.

Cost to get started

Creating quality, high end content can be expensive. More affordable devices have lowered the barrier (one that I would recommend is the Mevo camera from Livestream https://getmevo.com). Software to edit the videos can also get expensive as the creator looks to improve the quality. After spending all of this money to create the best content, the last thing the creator needs is to spend millions marketing it to a new audience and the tools to get it to them.

Where the Pro’s turn to a Con

So, with all of these cost savings and ease of use with a built-in audience, there is a reason at some point to begin moving content to your own proprietary location. All of these streaming sites are AVOD, or Advertising Video on Demand, supported, meaning that in order to make money, you have to get a lot of eyeballs on your videos in order for enough ads to play. At the same time, the value of the ads displayed during your videos is affected by CPM’s. Now what is a CPM you might ask, but rather than give a detailed explanation here’s the definition:

Cost per thousand (CPM) is a marketing term used to denote the price of 1,000 advertisement impressions on one webpage. If a website publisher charges $2.00 CPM, that means an advertiser must pay $2.00 for every 1,000 impressions of its ad. The “M” in CPM represents the Roman numeral for 1,000.

The math in making money is how much my CPM is compared to total views. These numbers change as you gain more popularity and ad networks / platforms understand the value you are bringing by getting more viewers. At first you are likely to make nothing at all and only when you are getting hundreds of thousands of views, does actual money start to come in.

On top of the time it takes to grow your own personal audience within these platforms, there is a revenue share. Imagine your YouTube videos bring in $1,000 in ad revenue from your videos in a month. You owe 45% of that back to Google.

Using these video streaming platforms is easier to get started and begin earning money without doing a lot of your own personal marketing. Yet, at the end of the day you owe the platform up to 45% of that revenue; a hefty price to pay.

If you are very new to the content world and do not have an established brand, it could be expensive to pay for the applications and technology and marketing required to start earning money. This is where Odd Networks comes in.

Once you have that established brand and thousands of followers, you can start to build your own private network. You can choose to stay with an AVOD model and keep every penny, rather than be forced to share it with Google (YouTube) or Amazon (Twitch).

I have a better idea! Let’s take the YouTube star and allow them to continue using YouTube but begin offering “premium” content on their own SVOD, or Subscription Video on Demand, video app. Once again I am going to use math to prove my claim.

First, lets look at a person who is making $100,000 on YouTube and what it takes for them to get there. I will use a made-up personality for practical reasons. Let’s call our creator Paul (that’s actually the name of our alien that is our logo). Paul has 1,000,000 subscribers and gets around 1,000,000 views a week.

• With those numbers Paul would earn up to $2,000. This is before sharing 45% of it back with google.
• Once you cross $600 you also need to file your earnings with the IRS, so let’s subtract another 30%.
• I will be naive and claim that Paul only spends $100 a week in creating and editing his videos.

• So there you have it. At the end of the week Paul has earned $700. Over the year he will end up earning $36,500 in net income. Not too bad for just posting videos on Youtube, but there’s a lot of money being left on the table.

Youtube, Facebook Live, and Paul’s own SVOD App

Now let’s say Paul continues to do this with Youtube and is enjoying his income but wants to make more. Paul comes to Odd Networks and asks to use our standard video apps.

• Paul has 1 million subscribers on YouTube and begins advertising his new video app. Paul decides to go live on AppleTV, Roku, and Amazon FireTV. While not all of his subscribers decide to sign up for his premium channel, 5% do.
• The price can vary slightly, but I will use base rate and say that he is paying $15,000 a year for an SVOD OTS app (off the shelf app). Paul also needs to use an OVP (online video provider) and we will use a typical price range we see and say it costs an additional $20,000. These cost cover the build off the application as well as the launching and license of the platform. The OVP is needed to provide hosting and bandwidth for the videos.
• On top of that there will be a 2.5% processing fee (standard credit card processing fee) and a 30% IAP cost. IAP stands for In app purchases and comes from the ability to sell on the devices (i.e. AppleTV, Roku).

Paul’s expenses went up with the technology cost and added expense of licensing the platform and applications, but his revenue also increased. In fact, Paul is now making more in a few weeks than he was in one year on YouTube. With YouTube and his own Odd Networks applications, Paul is now making more than $2,000,000 a year in net revenue.

I know you’re now thinking, why don’t I just launch an SVOD app and become a millionaire overnight. The fact is that building an online audience in any platform takes time and Paul’s example is one of possibly 10,000 or so could truly pull off if they started today. These platforms are growing, and with hard work someone could easily do a third of what Paul did and still be living a very comfortable life.

I think that Facebook Live andYouTube are not competitors to what we at Odd Networks are doing at all. In fact I think that they are supplements. If you are a rising YouTube star taking advantage of monetizing your audience in an SVOD format, it makes a lot of sense. Continuing to use both platforms allows the video streaming platforms the ability to serve as a farm system per say.

At the same time if you’re already an established brand and you go straight to OTT, it would also be a good idea to build a presence on the video streaming platforms for marketing purposes. There is no easy way to gain access to millions of viewers that are always looking for some new content to consume than enlarging your brand’s presence.

If you want to see more of what we are up go to https://oddnetworks.com/

Or if you want to hear our story — An Odd Platform — The Story of Odd Networks

https://blog.oddnetworks.com/an-odd-platform-the-story-of-odd-networks-abaf3b8669ef