Takeaways: Choppertown and the Wild West of Facebook Video (3 of 3)

Choppertown evolved from a credit card-financed first documentary to a profitable Facebook documentary channel.

• We profiled Choppertown‘s origins here (Part 1).
• And the takeoff as a hyper-niche Facebook Video channel here (Part 2).
• My podcast audio conversation with producer Zack Coffman is here.

This week, here are my Takeaways…

1. Facebook Video: The Scale and Drive to Win

Size + Momentum

• Facebook earned $2 Bn in 2Q’16 net income, doubling in 6 months.
• Monthly active users increased to 1.71 billion.
• 1.1 billion use Facebook daily.
• From a standing start in mobile just 4 years ago, Facebook generated $5.2 Bn or 84% of its quarterly ad revenue from mobile.

Video Strategy

• Facebook’s Mark Zuckerberg recently stressed that having conquered mobile, video is the #1 strategic priority for the social media giant.
• Zuckerberg said “We see a world that is video first, with video at the heart of all of our apps and service.”
• FB execs recently predicted that the service will evolve to being ‘all video’!
• FB videos are a good bet to earn an increasing share of each consumer’s total video viewing experience.

Wild West

• The shift to online viewing is strongest among young viewers.
• FB and Snapchat each offer factual producers a platform to share and promote their films.
• It’s a complicated world –a Wild West — that can be harnessed to attract viewers and drive multiple revenue streams.
• But that effort requires tremendous focus by content owners on the analytical tools of direct response marketing.
• These bus dev skills don’t come easy to classic producers and documentarians who rely on traditional commissioning or foundation funding models.
• Facebook Video will create new winners, just as Cable/Satellite channels did for a new wave of hungry young producers who weren’t stuck in the Broadcast network production model.

Commissioning Content

• Facebook is dipping its toes into original content.
• It signed deals with almost 140 media companies and celebrities.
• That’s a commitment of $50 million for guaranteed live-streaming content for Facebook Live.
• The top 15 providers account for $21.4 mn, or almost 43% of the total $50 mn.
• At the top of the list are BuzzFeed ($3.1 mn), New York Times ($3 mn) and CNN ($2.5 mn).
• And FB is spending over $2 mn to encourage YouTube stars to experiment with Facebook Live.
• The expense is a drop in the bucket, but a start!

2. Choppertown: A Mini-thematic Network

• Choppertown has evolved from documentary producer into a model mini-network for the Facebook Era.
• It’s a fascinating mix of a garage industry and ‘best practice leader’ for documentarians.

Why Did Choppertown Succeed? 

• Choppertown is strongly branded.
• It targets a niche audience that has an intense passion for its content.
• The audience is coveted by certain advertisers and brands.
• It offers a mix of content, including owned- and acquired- video programs as well as graphics and text
• The programs are affordable: They are either originals produced at a relatively low cost, are sponsored, or are acquisitions based on a revshare model without MG’s (minimum guarantees).
• There are multiple, rapidly evolving revenue streams.
• Choppertown sells products directly to consumers without a middleman.
• It accepts sponsored Facebook messages that target the audience demo’s…
• …and will soon earn subscription fees.
• The venture is intensely managed on the classic direct marketing ‘Test & Roll Out’ model.

The Short Life of the Business Model

• Our previous ‘moving image’ business models, like projected cinema in theaters, broadcast, and cable/satellite, have lasted for generations.
• The shift from VHS to DVD to SVOD and DTO (Download-to-Own) shows how the period of dominance by a platform or format has shortened in the 21^st Century
• Today’s complex online video models seem to have a half-life of about twelve months.
• I wonder how Zack and Choppertown will pivot as the Facebook video model matures and FB’s dominance of social media is challenged by Snapchat and the inevitable outsiders??

Reading: Two Unique Case Studies

• Advertiser-funded Programming. The Factory Media Case Study: ‘The Indestructibles’ Reaches 34 Million, a Case Study that we wrote after Realscreen Summit 2016.
• Our evergreen Case Study of Globe Trekker and the PBS corporate sponsorship model.

Contact details for Zack Coffman

• Thanks to Zack for sharing his experience.
• Here are his contacts: LinkedIn.com/in/zackcoffman

SVOD EXPLAINED
Original Analysis for Documentary Producers & Executives
PLUS TAKEAWAYS

Opportunities, Success Factors & Deal Terms
for Netflix, Amazon, YouTube, Vimeo and other OTT/VOD Platforms
From DocumentaryTelevision.com with
contributions from distributor Kinonation’s Roger Jackson
Read More Here.
Download Now: $39.95

Speaking Engagements

• Wildscreen, Bristol UK, October 10-14: WildLIVE! With BBC’s James Honeyborne (“Big Blue Live”), Nat Geo Wild’s Dan Salerno and WildEarth’s Graham Wallington (“safariLIVE”)
• WIVF’s ScriptDC, Washington DC, November 5: Documentary Distribution Landscape, moderated by Maryanne Culpepper
• Realscreen Summit Master Class, Washington DC, January 23: Production Budgeting with Elizabeth Ventura, the ‘budget whisperer’.
• AIDC, Melbourne, March 5-8. Btw, I’m very excited to join AIDC’s Advisory Committee. Great team! Great city! Great month to be there!!