Why do experts make next-to-nothing from their videos on the most popular web sites?

The business models that have been making money for entertainment videos have proven to be unsuitable for instructional, event, and news videos. On YouTube, it’s pretty tough to make non-trivial revenues - unless you’re a smash-hit viral video. On Facebook, your videos never earn anything for you, no matter how many Likes, Shares, or Clicks. iTunes and Amazon are giant stores that give you no access to customer data, and consumers must find their way and make a purchasing decision for each item of interest. Netflix’s and Hulu’s all-you-can-eat model requires complex contract negotiations often involving large guaranteed payments to content owners.

What’s wrong with free?

YouTube and Facebook have created the unrealistic expectation that all content is created equal and should be free. But it turns out that the advertising model fails with the narrower (but enthusiastic) audiences for specialized instructional videos and videos of events.

…but there’s a bigger problem with giving away experts’ work:

There’s an implicit assumption that if something is free, it has no value. Since anyone can upload a video, there’s a massive mixing of junk and amateur material with a smattering of great stuff, with no way for the average user to sift through and find the best.

…YouTube and Facebook can’t solve the money-making problem.

That’s not to say there’s no role for YouTube or Facebook. But for experts, the best use is putting up a very limited amount of good material as a sample to convince users that it’s worth paying for more. If a little bit too much is given away for free, then it cripples the experts ability to sell his valuable content.

…Bottom line: If you give it away, you can’t sell it.

…DVDs are no longer profitable for experts.

DVDs have become much less desirable and harder to protect. Sales of DVDs continue to decline rapidly, especially for instructional material and competition and other events. Fewer and fewer devices support the format.

…There another big problem with DVDs.

It’s become very easy for users to “rip” the DVD and convert it to video that can be uploaded to YouTube, Facebook, or a “torrent” web site. So, over time, some of the best, most popular, paid instructional material ends up being given away for free. The lower quality of most ripped DVDs does little to stop the free clips from destroying the value of the DVD’s contents.

… Streaming is the delivery method users want.

More and more users have devices and sufficient Internet bandwidth to handle video streaming. The technology for streaming has been continuously improving. Pretty good quality can be achieved even when the Internet is crowded or the connection is slow.

…Downloads are not the answer.

Selling video downloads gets around the inconvenience of DVDs but does not solve the protection problem. Streaming videos on demand allows for easy protection, but supplying users with entire videos as downloads complicates delivery, use, and protection. If a user wants to view a little of a video or jump around the video, that easy to do with streaming. And it’s still easy for the vendor to prevent the video from being stolen. On the other hand, when the vendor supplies the entire video at a high quality, a large file is deposited on the user’s device. Because the device that plays the video must have a combination of the vendor’s specialized software and proper permission settings, protection from rip-off becomes especially complex for downloads.

…Selling individual expert videos has become a losing proposition.

To reach above the noise of the Internet requires a sizeable marketing effort, almost always too large to justify item-by-item sales of expert material.

…Experts can make money if they give customers a better deal.

To be profitable, customers must feel like they are getting great value at a very good price. Most customers prefer all-you-can-eat buffets to a-la-carte dinning. For example, when it comes to Hollywood blockbusters, monthly subscription services like Netflix have trounced the services that are modeled as online stores, such as Apple iTunes, with its item-by-item purchasing.

Content Galaxy's publishing service offers a convenient new way for video producers and aggregators to generate income from their web sites, blogs, emails, and social networking posts. Content providers can stream their own content directly to their web audiences without needing an infrastructure to collect payments, track usage, manage subscriptions or protect and serve the videos across multiple devices and network speeds. Subscribers pay a flat fee for full streaming access to the channel ("all-you-can-eat"), with rapid crediting of micro payments going to the providers, based on actual subscriber usage, as well as subscription sales.

Content providers put their videos into well-edited channels - without giving up ownership rights or needing complex contract negotiations. There are provisions for easy audit and understanding of usage patterns, and revenue for particular videos can be split between multiple parties, again without individually negotiated contracts.