Los Angeles Business Journal

Online Video Producers Turn Focus on Super Fans

INTERNET: Ventures look to go Dutch on cost of productions with audience. By Tom Dotan Monday, August 26, 2013
Claude Shires, left, and Josef Holm at TubeStart in Santa Monica.

Claude Shires, left, and Josef Holm at TubeStart in Santa Monica. Photo by Courtesy Photo

“We put the first couple hundred clips online and made just $200,” Holm said. “We did the math and realized that this would never work out. It doesn’t add up.”

Offering tiers

Holm, who previously worked in marketing, and Shires, who owned a postproduction studio, still maintain the channel, but their focus shifted toward the ways other creators could make more money.

TubeStart offers several tiers: Subscription Funding, which charges fans monthly fees from $5 up to $50; Flexible Funding, where creators can set a goal but still get to keep the money even if the campaign falls short; and Fixed Funding, which follows the traditional Kickstarter all-or-nothing model.

The company, which is bankrolled by its creators, charges a 5 percent fee for all proceeds raised during the campaign, the same rate Kickstarter charges. So far, there are 11 active campaigns on the site, with more than 160 more apparently in the works.

The campaigners include a travel series run by two guys in Seattle (they’re looking for $5,000) and a comedy-sports program that pits two comedians against each other in the boxing ring ($25,000).

Still, the incentives behind the campaigns are the perks. A channel that features slow-motion photography offers high-end donors a seat at a studio where the creators will be shooting an episode.

Altmann sees companies like TubeStart and Laffster as the natural next step in the online video ecosystem.

“It took companies like Maker Studios and Machinima to help find a lot of the talent,” Altmann said. “Now there’s a bunch more to help these guys make money.”

There are motivations to these crowdfunding campaigns that go beyond money. YouTube has been notoriously tightfisted about giving up subscribers’ contact info and creators have griped that they have no way to reach out directly to their fans.

While getting YouTube to change its policies might not happen anytime soon, a successful campaign with a wide range of donors can cut out that middleman altogether.

“Even if one day the financial aspect to crowdfunding becomes secondary, this is still the best way to build up your core audience,” Holm said.

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