• July 14th, 2009illycutThe Word

    profitI know, broad question right?  As I continue to dig into our financial pro-forma, to ensure that all revenue/cost figures are current before I hand it over to 4corners, I just can’t see how you can’t develop profits in the broadband video market.  Every time I look at the margins and costs involved, even when using improbable absorbent cost figures, the financial sheets always project that we will see initial profits within one year of operation.  This is not normal for a start-up; normally it should take years for investors to see a return.   Of course success is completely contingent on the number of unique visitors a website attracts, but to date there hasn’t been one major broadband video site to attract less than 600k unique visits in a month.  I think market costs were about 5x as much only about 18 months ago, so maybe it was just harder to be profitable in the past, but by our measures if you have good advertisement relationships and a reasonable overhead, 1.8-2M views in a qtr should leave a video company on the cusp of profitability.   Every major site, even those that have failed in the long-run, has at some point hit over 600k unique visits in a month.  However, at that point, a particular site either engages users and continues to grow rapidly, or it losses.  There is demand for online video, so there is no shortage of users to drive unique visits. It seems success is completely dependent on the quality of the product presented.
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