Last night, we started a new series of calls especially for Internet marketing beginners.
It’s a chance for people who are just getting started to call in and get answers to those pesky and sometimes embarrassing “A B C” questions that are often hard to nail down.
If you’re a beginner and you want to be notified the next time we do a call like this (they cost nothing and are hype-free), go here to register: http://www.thesystemseminar.com/nextstep
The reason I bring thing up is that last night someone asked a question about how to profit from Internet video and it gave me a chance to share a business model that no one else seems to be talking about.
Not exactly beginner’s material, but because Internet video is so new it’s an opportunity that has not occured to many people – yet…
The caller was a video producer. This fellow already knows how to shoot and edit video and seek out and work with clients.
His question was “How can I cash in on the Internet video boom?”
Here’s my answer:
1. Grad the low hanging fruit first
If you’re already producing video, you should immediately add the service of digitizing it, hosting it, and maybe even promoting it for your clients.
Video production is normally a “one shot” business. You go, you shoot, you hand over the tape, you get your check and the business is over. It beats digging coal or picking cotton, but it’s not an optimal way to build wealth.
The way you build wealth is to turn one-time actions into recurring income streams.
By adding Internet video services, you not only increase your income per transaction, you also distinguish yourself from all the other guys with a camera in your market. Not only that, but you also open the door to recurring income by getting into the video hosting (or the term I prefer management) business.
How does this work in practice?
Step One: Charge your client a fee to prepare his video for the Internet.
Step Two: You make the arrangements for the hosting of the video for a monthly or annual fee payable to you.
Many of your clients will need other services as well: web design (you can’t just stick a bare video on a page) and marketing (getting people to the video and capturing their e-mail addresses.) 99% of your clients won’t have a clue as to how to do this, but the smart ones will value it highly.
As an Internet marketer, you know that we’re just talking about putting up a page, tagging it correctly to make it search engine friendly, creating an opt-in offer, and managing and harvesting the value of the names collected with an autoresponder sequence. For an Internet marketer with even the most basic skills, all this is a piece of cake. For your average business, it’s rocket science. In fact, it’s beyond rocket science because most businesses still don’t get how to use the Internet to build their businesses.
What started as a simple shoot and edit job becomes a shoot-edit-digitize-upload-web page creation-opt-in creation-mailing list management-hosting business. I highlighted the word business because that’s what it’s become. Once you start managing their Internet video promotions, you become a fixed part of your client’s advertising budget which means you get checks for as long as they can write them.
How easy is it to move all their video and all the other stuff I described to another provider? Depends on their level of sophistication, but if you make it simple for them and provide an excellent service that produces results (like a growing mailing list that generates new inquiries and sales) why would they ever want to move?
OK. That’s the low hanging fruit. Let’s get to the really good stuff.
2. Become the advertising toll gate
When I was a very small boy, I was fascinated by toll booths. Not knowing much about business, toll booths were easy to for me to understand and appreciate. If you want to ride on a particular road, you have to pay money to the toll keeper. It seemed like a very simple business that could not fail to make money. (It turns out that toll roads are a fantastic business.)
Another kind of toll gate business is the advertising business.
As business owners, when we think about advertising with think about buying it and making it work. (And it is a lot of work to make advertising work, isn’t it?)
Wouldn’t it be nice instead of paying for advertising, to sell it, or better yet collect it, and let someone else worry about whether it works or not? Sure it would be. The challenge is how to put yourself in that position, in the advertising toll gate.
The dawing age of Internet video opens the door for us…
Here’s how Internet video entrepreneurs can create their own person toll booth: specialize and aggregate.
In other words, don’t just provide Internet video services for random clients, pick a niche and specialize and then create a portal where everyone in that particular niche must advertise.
Here’s an example of what I mean…
Let’s say you live in a major metropolitcan area. If you do, you can count on the fact that there is a big, competetive market of restaurants. They all want customers and they all spend regular money on advertising to get them.
What if you specialized in online video promotions for local restaurants and then put all those ads in a single spot and used that content to attract and build a relationship with all the restaurant customers in your area?
Now, not only do yourclients need you to shoot and stream their videos for them, they need access to the portal that you own.
How long do you collect fees from them for the right to advertise on your portal? For as long as they are in business.
How easy is for them to disentangle themselves from you? Not very and why would they want to? You’ve become the central clearinghouse for all video information about dining out in your area. If you’re a smart Internet marketer, you can imagine all kinds of ways to promote a site like this and monetize the traffic above and beyond advertising revenues.
So how do you get started?
First, start now. The first one into any market with the biggest bang is going to have a good chance to put a lock on it.
Second, get to critical mass fast. It would pay you to select a few high profile clients in your niche and just give away the service. Produce the promotion for free and give it a spot on the portal for free for a good chunk of time (say six months).
What’s critical mass? Three clients. Five clients. Something that makes people go: “OK. This is for real.”
Once you’ve got the critical mass you need to have basic credibility, get the media involved to write about your brilliant venture. Remember it’s 1994 all over again. In 1994, anything anyone did on the Internet was noteworthy. Right now, for this little window in time, it’s the same for Internet video.
Press coverage will give you credibility which will draw paying clients to you and give you great sales tools for your prospecting.
I’m using local restaurants as an example, but this model would work for any niche where clients need to advertise and need to have a high profile.
Will you make out like the founders of YouTube? No, but you could create a business that makes money year in and year out in a durable way without the lot of ups and down that most Internet entrepreneurs are prey to.
Increasing pay-per-click costs? That’d be good news for you as someone selling advertising. Capricious search engine reshufflings? Great! Clients will need their place on your portal even more.
The key: Get to critical mass fast and first. Now’s the time.
P.S. If you’d like to receive updates about new opportunities in the quickly evolving world of Internet video, visit this page and sign up to be on the notification list. It’s low volume and zero spam.
– Ken McCarthy
P.S. For over 25 years I’ve been sharing the simple but powerful things that matter in business with my clients.
If you’d like direction for your business that will work today, tomorrow and twenty years from now, visit us at the System Club.