Since the explosion of streaming video several years ago, hosting sites have become home to a crop of young video makers attracting devoted followings for everything from music and sketch comedy to make-up tips.
Meanwhile, online video has become a career for thousands of video creators, with some making hundreds of thousands of dollars each year.
And in an uncertain job market, many are finding ways to cash in on the opportunities afforded by web video.
As online video viewership has grown – YouTube reportedly draws 500 million unique visitors each month – marketers hope to take advantage of the dedicated audiences and low barriers to entry.
Six-figure incomes
Video creators in turn are making money from hosting sites such as YouTube, DailyMotion and Blip.tv, which share a portion of the profits derived from video and banner advertisements.
YouTube, for one, has distributed millions of dollars in advertising revenue to its 20,000 most popular amateur producers since 2007.
Blip.tv, which hosts the Annoying Orange comedy show describes its content as “the best in original web series”
“We share millions of dollars with our partners every year,” said Tom Sly, the site’s head of strategic partner development.
The amount advertisers pay varies with the popularity and quality of the videos, with creators receiving as much as $20 (£12.70) per thousand views.
“Across the board we’re seeing those numbers increase as we see higher quality content and the ability to target users so that advertisers have more fine-grained control,” Mr Sly said.
In 2010, the number of YouTube partners making over $1,000 (£600) per month from advertising revenue went up 300%, the company said.
The company declined to release specific figures, but Mr Sly said “hundreds” of video creators make more than $100,000 a year and “thousands” make more than $10,000 a year.
Sponsorship deals
The top performing web shows on Blip.tv are on target to take in more than $1m in advert revenue each, said Eric Mortensen, senior director of programming.
“There are certain class of people, and it’s not that they are rejecting TV, they never even thought to be like TV in the first place,” he said. “And because of that they are doing new and different things and that’s how they end up making money.”
Mike Michaud, who started online production company Channel Awesome after being losing a job at an electronics retailer, says the revenue he earns from host Blip.tv has enabled him to hire six full-time and two part-time staff members.
“I don’t have the daily grind that a nine-to-five usually entails,” Mr Michaud said.
“I wouldn’t say I’m living comfortably just yet, but I am living much better than before.”
Industry analysts say that online video audiences are loyal and attentive and feel a connection to the creators.
In addition to advert revenue sharing, some video creators make as much as $150,000 a year by cutting sponsorship deals with major companies, said former YouTube executive George Strompolos, founder of Fullscreen, a start-up that aims to facilitate connections between corporate sponsors and video creators.
Aware of the power of recommendations from such seemingly personal relationships, companies like Ford, GE, and Lancome are directly reaching out to video makers to hawk their products.
Rocketboom, which launched in 2004, was among the first US online programmes to make money
Online video creators work without the need for teams of agents, managers, markets and developers, Mr Strompolos said.
‘Quit your job’
“Online video tends to be a one-stop shop solution,” Mr Strompolos said.
“You get not only the creative development and the authenticity of voice you’re looking for, but you also get distribution and reach.”
As the online video advertising and merchandising infrastructures become more sophisticated, analysts say more and more people are likely to strike out on their own in web video.
“I see this becoming the new television, but a place where the average person has a much better chance of getting noticed and making money than if they were to go the traditional route via Hollywood,” Mr Michaud said.
Alan Lastufka, author of YouTube: An Insider’s Guide to Climbing the Charts, said: “The money may not always be headline-worthy, but it’s enough to quit your day job, stay in the basement on your computer and spend your time connecting with fans.”
