Q&A: Metacafe founder Eyal Hertzog - making money in online video

Last week, Metacafe announced that its users earned $1 million dollars in the last year from their viral sensations of short online movies. How does the ordinary user do that in this dynamically changing medium? Metacafe co-founder and CPO Eyal Hertzog sat down with the CamcorderInfo.com Blog to take about user-generated content in the online video world. 

CamcorderInfo.com: Has user-generated content been fully monetized?

Eyal Hertzog: No, nothing like that. The advertisers are still figuring out how to take advantage of this popular media type. I think we will see more and more advertisements entering the space. The agencies are pretty slow on the process, and rightfully so. This is a new thing to be figured out. The advertisers are trying different stuff and seeing what’s right for what.

 

Advertising in Online Video vs. TV
CCI: How will advertisements be implemented into online video? Some say that pre-roll is a disaster. They prefer the Google-YouTube model with overlay.

 

EH: VideoEgg model. YouTube copied VideoEgg. People do it all the time, and that’s okay. People copy from each other with good ideas, and that’s a good thing, but we should give VideoEgg the credit.

 

CCI: Do you see advertisements solely coming in through overlays, like the kind pioneered by VideoEgg? Is that the best way to make money?

EH: I think overlays are important. What people don’t realize is that unlike a webpage, when you watch an online video, you are focused on the same place on the page for a long time. It’s not like reading an article or blog in such a way where you browse around the page and move the pages frequently. 

With video, it’s a different experience. Advertising should be adapted to it. If your page is static and not that dynamic, the advertising should be dynamic. You can see that on TV today; they realize that people skip commercials with TiVo, right?

The advantage that online has over TV is that if something comes out, you can click on that, something you can not really do on TV.

The other important thing is sponsors. It’s not about forcing the user to see it but giving him the chance to see if the video is there. If I am gamer and there is a new version of Call of Duty and there’s a video about it, because I am a gamer, I am going to click on it…For the advertiser, that’s a very lucrative market, just being there, just giving the options for clicking to explore more.

CCI: When you talk about a sponsored ad, it would be a separate video that is dedicated solely as a commercial?

 

EH: That’s one way to do it.

 

CCI: Has it been successful so far?

 

EH: Yes. It’s a very powerful model. You can see it on it almost every website. If TV is linear, think about TV as an endless street. You go here and there. The path of the user is unlimited. If you get a sponsored video, you can be part of the path of the user.

If you are buying commercial time on TV, you are forcing yourself onto the path of every user. That’s not what’s interesting. I’m not interested in buying a new car; don’t show me an ad for a new car ad. If I am thinking about a new car, and there is an ad about a new Toyota, I might shop around for a new car. It’s voluntary. 

The User Street: How viewers select videos
CCI: For producers of video, what would be the best way to utilize those ad models? Would it be matching up with online hosts such as Metacafe or would it be better to use a personalized URL?

EH: When you use a personalized URL, it’s more difficult to fulfill the needs of user to go through a specific path…When you are a big aggregator, you can actually take the user through a path. If you just have your one website with a few videos, then it’s harder to create that kind of path.  If you are a large aggregator, you have a better chance to get noticed and get a lot of people to view your video.

CCI: If you are a filmmaker and you put your video online, wouldn’t you want to control that path, what the user sees? 

EH: What matters is that someone actually chose to see your video. He was not automatically directed there. He saw it in a thumbnail. He saw it in a title, and he chose to go into it.

How to Get Your Video Seen
CCI: If you follow the tips for making viral videos, such as keeping your video public, following SEO [search engine optimization], and engaging in social networks, is it really possible for the average user to make money off their video? Can anyone do it?

 

EH:  We [Metacafe] gave users $1 million last year. Is it possible? Sure. Is it easy? No way. If it was easy, everyone would do it. Metacafe’s producer rewards [program] is all about equal opportunity. It’s not that everyone can make it, but everyone will have an equal opportunity to make it if you have something interesting to say, if you have some kind of talent, then we will give you the same opportunity that the biggest media house has. This is something really core to what we are doing.  

Eventually there will be very few of those that try that will actually make money. It’s like with other things. A lot of people study an instrument when they are young. How many professional musicians are there? How many people make money out of music? Everyone is trying, and trying it part of the fun. Go ahead and do it. Explore. Show it to your friends. It’s fun.

If you are very, very talented, it will pay your salary. We actually have producers that make good amounts of money, just from home, with no backing from a big media house.

CCI: With Metacafe’s Rewards Program, the company gave away $1 million over the year for videos that went viral. Are there any tips for new beginners?

 

EH: Watch what works. It’s like reality TV. First came American Idol, then American Model, then American fashion designer. It’s not by accident. People are watching the trends. You can try to be original. You can try to invent something new, but it can be risky. You can take the risk. The costs are not so bad. 

It’s important to have a natural talent of what is entertaining. Show it to someone who doesn’t know you. Why did like it? Why didn’t he like it? Don’t be afraid of the feedback. Feedback is good; it’s going to help you produce a better thing next time. There’s a lot of things that video producers need to do, but the most important thing is don’t be afraid even if people will bash you. Not trying is the worst thing.

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