Title: Your First Source of Revenue
Your first source of revenue is the same as traditional TV: advertisements
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Let's talk about revenue; because revenue is the most important thing there is. A lot of journalists don't like to talk about revenue, they think it's kind of a dirty word, it's something you shouldn't get involved with, but, in all honesty, if there's no revenue, there's no channel, and we're not doing this for public service.
These channels can be very, very profitable, but to be profitable you must focus on how to make money.
Now, there are three possible revenue streams when you start these things and you should pay attention to all of them.
The first revenue stream is advertising.
As we said before, the nature of the affinity group means that you have honed down, and focused, and refined the people who actually are on your channel. I wouldn't say, viewers, because, as you saw from the last lesson, they're really participants. You've really created a community. And this community has an enormous attraction to a certain group of advertisers. Those advertisers are going to be people who are driven to people who participate in your particular community or affinity group.
So whether it's wooden dollhouses, or wooden sailboats, or interior design of white, or cooking with Chinese food, or things like that, you are then going to be able to go to specific advertisers who are specifically interested in the affinity group that you've created and say to them: I can deliver to you people of a particular passion for the thing you are interested in.
Now, how do you know who those people are?
Well, it's pretty easy. Once you've decided on your affinity group, go back to that magazine store at the airport, go find the magazine, and go steal their advertisers -- sorry to say. Look at who's advertising in those magazines related to those specific things and bring them in.
Now here's another really interesting point: Because it's a video-driven system, you can also create online video commercials or things that put your advertisers' products in play as stories in and of themselves. Because it's so inexpensive to make the content, we're going to talk about this in the next lesson, you can transcend just making programming or content that creates advertisers and you can actually make your advertisers part of your affinity group. This is a really interesting idea. Because people are interested in Leica cameras for example, as an affinity group, and that can certainly be one, are also interested in how the camera works, what new models have come out, things like that, and my guess is that the Leica company, or a Leica salesman, or a camera store in an area near you, would be extremely interested in working with you to create video stories about the product that your affinity group is interested in buying.
So this begins to blend advertising and advertisers as content creators at the same time. Your job here is not to go out and sell spots, which is what tradition linear television did, rather it's to expand the community to incorporate both users of the product and creators or sellers of the product into one solid group, or sphere.