Common Craft - NOT a Viral Video Company

I've been really excited to see the feedback about the new Web License. Asking people to pay to embed a video has raised questions and responding to them has been an interesting experience. If nothing else, it's eye-opening to see what people are assuming about our business.

For example, Mike Masnick at Techdirt wrote an article called "Viral Video Producers Want To Charge You to Embed Their Videos."  Then, Steven Hodson at Inquisitor follow up the Techdirt article with "Common Craft Seems to Forget What Makes Viral Video... Well Viral."

Both these articles assume (mostly incorrectly) a few things:

1. Viral video is our business/marketing model
2. YouTube is required to build a business on video
3. Our Web License is focused on viral distribution

It's really interesting to me that, after 3 years of making nearly 30 of our own videos, people still think we're a viral video company. We haven't had a viral hit in a very long time, or thought we could build a business on viral videos. In fact, I'm not sure successful businesses can be sustained that way. I assumed, perhaps optimistically, that a visit to our web site would make that clear.

Now I'm wondering if what has appeared on a few blogs is a widely held perception? Are we not explaining our own business well enough? 

The truth is, we make high quality educational videos - videos that help organizations and individuals accomplish goals.  These are videos (unlike most viral videos) that people are happy to pay to license because they are useful. The best we can do is make a quality product and attract people and organizations that want to buy it. Part of this strategy is making commoncraft.com the home of our videos - not a host like YouTube.

The Web License model is something that (as far as we know) has never been offered before. In the context of purely viral videos, it would be a very difficult model.  But the value of our videos is not so much in blog posts or viral distribution, it's in solving problems for people and organizations whose job is to inform and educate others, on and off the web. That's where you'll find us in the future.

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Amit Asks: Will You Pay to Embed a Video on Your Website?

Amit Agarwal at Digital Inspiration has been a fan of Common Craft for a while and we've always enjoyed his thoughful analysis of our videos and business.  The news yesterday about our Web License prompted him to write about it - and question the business case for paying to embed videos.  We welcome this kind of analysis. 

He writes:

The good old YouTube days are over as Common Craft has created a new “web license” for their videos that would require bloggers and websites to pay a monthly subscription fee for embedding videos on their site. And this is not a small amount.

I am huge fan of the entire Common Craft series and admire the fact that they have come up with such a unique business model to distribute their “high value” content online. At the same time, stories published on blogs, unlike the newswires, stay forever so the cost of embedding a single video could easily run into a few thousand dollars over time and that may not make lot of business sense.

I think there is an important distinction to be made here that explains our licensing model. Amit, and I'm sure many observers, think of online video in the business-to-consumer YouTube model. It's social media currency - something to be shared broadly on blogs for free via YouTube. This is obviously a valid and dominant model. However, it's not the only model for online video.  Our approach is based not on bloggers or individuals, but organizations that will put the videos to work.

Over time, we've learned that Common Craft videos can be used as valuable business tools for organizations who are looking for high quality content to attract, engage and educate visitors, and potentially turn them into customers.  These videos don't normally reside on blog pages.

In our blog post about the new license and relationship with Wistia we say:

“This means a technology company can educate visitors on the basics of wikis, or cloud computing. A financial institution can educate potential customers on the stock market or borrowing money. A service organization can educate citizens about preparing an emergency kit.”

We're targeting the business-to-business market – organizations that will put the videos to work. We believe that the model makes sense for organizations because the videos can contribute to organizational goals. Plus, these same organizations want the hassle-free nature of embeddable videos that also come with Wistia’s analytics. This is very different from marketing the videos to bloggers.

Of course, this is uncharted territory for us all.  Over time, I'm a big believer that we're only starting to discover how video producers can build businesses around quality content. Hopefully this is a step in the right direction.

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Introducing Our New "Web License" and Partnership with Wistia

For a while now, we've heard a common request from potential customers.  They want an easy way to license and share Common Craft videos on their website. Today we're announcing a new partnership with video sharing company Wistia that will help us serve this need with our new "Web License."

A Little Background...

We license our videos to individuals and organizations. Two of our most popular licenses (Individual and Site) are for offline use. Customers download video files for use on intranets/extranets, training programs, classrooms and presentations. The videos are really useful internally, but they can't be displayed on public websites. Of course, some customers want to do just that.

Problem Solved

Our new partnership with Wistia means that our customers can license high quality Common Craft videos and use Wistia's video sharing tools to easily display them. This makes adding a Common Craft video to your website:

    •    Easy - Add videos with simple copy-and-paste embed code.
    •    Smart - Gather rich info on who watches the videos and how they watch them
    •    Flexible - Choose from multiple plans, based on monthly views

This means a technology company can educate visitors on the basics of wikis, or cloud computing.
A financial institution can educate potential customers on the stock market or borrowing money.
A service organization can educate citizens about preparing an emergency kit. 

Our Web License means that any website can benefit from Common Craft videos.

This 52-second video helps explain the relationship:

If you're interested in licensing Common Craft videos for your website, look for the "Web License" option on any video at CommonCraft.com.

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Erring on the Side of Happiness

Not everyone knows, but Common Craft is a two-person, home-based business. We're 100% independent, with zero employees or investors. While we work with specialists by contract, everything that Common Craft does comes from us and impacts only us. This has been our goal since 2006 when Sachi and I started working together and today, we're starting to really understand what it means to be a two person "couple company."

It's not all unicorns and rainbows. Along with our important video-making duties, I am one of two people in the customer support department. Sachi is our head bookkeeper. There's no one else to answer the phone, run errands or follow up on a question. We spend valuable time on things that could easily be done by others, which surely impacts our productivity. But, we are connected directly to our customers.

Work is a constant part of our lives. Business happens over dinner, on walks and off-hours. We don't ever really get away. Instead, we've learned ways to streamline our work, even when we're supposed to be traveling or on vacation. 

Perhaps most importantly, our business is difficult to scale with two people. When headcount is a constraint, fewer business models make sense. So we have to find what works for us. 

These are obviously self-imposed limits and I'm sure most business people would say that we're missing opportunities. It's true, being small means passing on many opportunities and focusing on ones that fit for us. But it also means new perspectives, perspectives that don't make as much sense outside of a couple company.  

Think for a minute about how decisions are made in many businesses. Money is obviously the driving force, which is directly connected to investor and shareholder interests. Business leaders make hard decisions every day, ones focused on increasing the health of the business. Of course, this is responsible and rational behavior.

But what if there is another perspective, one that is unique to companies like Common Craft? What if, along with money and business health, a driving force of every decision is happiness among the founders? This is how we've learned to operate - our happiness as a home-based unit is perhaps the most important thing for our business and something directly connected to long-term financial success. When we look at opportunities, we ask ourselves - will this make us happy? If this opportunity comes to fruition, will we still be able to live the life we want to live? 

Of course, it's not just happiness. This is really a strategy to prevent its evil twin, unhappiness, from rearing its head. Unhappiness, in the context of a married couple's work together, is poison. Business success wouldn't matter if we stopped enjoying our life together.

So we've been very deliberate about how we run Common Craft. We don't have employees because we don't want an HR department. Instead, we've found a business model (video licensing) that scales without employees.  We don't have an office because we love being at home and have made it our best possible workspace. We can be very low-overhead, agile and lightweight with two people. We've never required outside investment, and I think we're better for it. Investors aren't likely to enjoy a return based on our happiness. We are happily independent. 

In the end, we're designing a business that fits with our goals as a married couple. By erring on the side of happiness, we can grow in ways that create a successful business, but also ensure that we don't lose control of our day-to-day lives. And with these things in place, we hopefully have a solid formula for sustainable creativity.

Of course, things change and Common Craft may become something different down the road.  But what will always be in the front of our minds is the idea that we have a choice. Every business is different and just because your "supposed-to" do something doesn't mean you have to do it. We all have a choice, and for us the important question is - will this make us happy?

For more posts like this, see our Being Small category.

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Interview with Andrew Warner of Mixergy.com

Sachi and sometimes say that we love making videos and plan to make a lot more, but what really geeks us out is business models.  We love experimenting with the many ways a business can be run. I was recently interviewed by Andrew Warner at Mixergy.com and it was one of the first interviews I've done that focused purely on our business - how we market our videos, how we sell content that's available for free, how we scale the business, etc.  I came out of the interview feeling energized and excited. If you're interested in the business side of Common Craft, watch the interview.

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Daniel Sevitt on The 3 Types of Online Video for Business

Daniel Sevitt of EyeView wrote a great article on ReelSEO.com called "The Three Types of Online Video for Business." The article deserves a full read, but I was struck by this simple diagram that illustrates the types of videos and their expected outcomes.

Image courtesy of EyeView

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Video Licensing: The Business of Permission

Almost anyone can make a video and put it online, but there are relatively few good models for earning a living from online videos. We've been experimenting over a couple of years and believe more than ever that video licensing is a model that has huge potential.

The Current Options

Of course there's the advertising model.  A video is made, it attracts eyeballs, eyeballs are distracted by ads. A tiny percentage of people click the ads and the video host and video owner make a bit of money.  It can certainly work and we've experimented with it, but it can be a long, hard slog.

For video producers, it's certainly possible to make a living by creating custom videos. This market is alive, well and growing. More and more businesses are looking for ways to introduce their product or service with a short online video. Some companies are doing very well with it, but it isn't easily scalable for a small company like ours.

Licensing at Common Craft

At Common Craft, we've been working on a model that's used across the media industry, but hasn't caught on in the online video world - yet. I'm talking about licensing, the business of permission.

Here's an example. Think about a video game that needs awesome songs for an upcoming release. There are bands (or labels) that own awesome songs. The video game company is happy to pay to use the songs in the game. This is a licensing relationship. The owners of the songs give the game company permission to use the songs in exchange for licensing fees. It's a tried and true business relationship.

The same is true for stock photos. You can view them for free (with a watermark), but to use them professionally or commercially, you usually have to pay a licensing fee.

Now, let's apply this model to Common Craft. Like songs on the radio, our videos are available on our website. You can watch them for free and they help us build awareness and brand recognition. We don't earn money from permission to watch the video. Instead, we've tailored our licenses for organizations and individuals who want to use our videos to accomplish their professional goals, like adding a catchy song in a video game.  These organizations are happy to purchase licensed versions because they're high quality and come with explicit permission for use.

Some examples:

1.  A large company needs videos for teaching social media across the organization. Our "Site License" fits the bill.
2.  An individual needs videos for workshops and presentations. We have an "Individual License" for them.
3.  A company needs useful and compelling content to educate visitors to their website.  We have a Commercial "Web License" for these sites.

But it's not always that simple. Thanks to YouTube, which has been helpful in spreading the word about our videos, the assumption for most is that online videos are always free. In offering licenses for our videos, our challenge is education - helping people understand the difference between watching a free video and licensing a higher-quality version for professional use.

It will take time, but the last couple of years have shown us that it's possible to make a living by licensing videos.

Creative Commons

This post would be incomplete without a mention of Creative Commons licenses.  Like any license, Creative Commons is about permission, but these licenses are often used to encourage free use. By using a Creative Commons license, the owner is encouraging others to share, remix, reuse the work as long as a few requirements are met. The requirements are up to the owner and focus on attribution, commercial use, alterations, etc.

While we've decided that Creative Commons is not a good fit for our business, it can be a great resource for video producers who are hoping to get their work in front of more people and be discovered.

Get the Ball Rolling

If you're a video producer, it's time to think about the business of permission! Here are a few things to consider:

• Do you own video content? If so, it can probably be licensed.
• Have you ever been contacted for permission to use your videos? If so, that's a licensing opportunity.
• If you haven't been contacted, identify the potential uses for your videos and look for opportunities.
• Look for ways to create a premium version of your videos for licensing.

From our perspective, the licensing side of online video has huge potential.  It's great to see companies like Vidvend experimenting with a similar model. Services like e-junkie make digital downloads easy to manage. The tools are there - now it'll just take time for more talented producers to experiment and find how licensing can fit into their future.

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Clarity on the Common Craft Business Model

Through going to conferences and talking with people about Common Craft, it's apparent that people have no idea how Common Craft could be a successful business.  From their perspective, they can watch the videos for free, so how does it work?

I want to answer this question because I think it's important context for understanding why we make the decisions we do.

In business terms, we are a "B2B" company, which means business-to-business. We make videos that are focused on helping businesses, schools, and other organizations accomplish their goals. These customers buy the licensed, high quality versions of our videos to educate employees, students, and website visitors. Our revenue comes from organizations and individuals who want the better versions, but also the permission that comes with licensing.

Now let's talk about the alternative: B2C or business-to-consumer.  Being B2C means making products for use by everyday people.  In which case, we might charge for viewing a Common Craft video, perhaps through a membership service or pay-per-view.  Our revenue would come from individuals who pay to watch and learn from our videos. We decided not to be a B2C company.

Here's one way to look at why this makes sense: In the B2C model, it's more difficult to build brand awareness. Only paying customers would see the videos. We decided early-on that we would give our products to consumers via sites like YouTube to help spread the word.  These versions of the videos would educate, but also have ads for Common Craft.  Over millions of views, this helped build brand awareness and lots of links to our website.  A percentage of these viewers might think "Man, I love that video, but I need a version that's more appropriate for the workplace" or "I'd love to show this in my presentation, but I need a downloadable file." These needs illustrate demand on the B2B side that comes as a result of giving our products to consumers.

Our challenge is to find ways to continue to provide free videos to consumers while increasing the awareness and demand for the licensed versions for workplace/professional use. From this perspective, I hope you'll see why we're making videos on things like Insurance. Our focus is not making something cool for You Tube, it's making something valuable for individuals and organizations with specific goals.
 
A note on custom videos: Making custom videos is a part of the Common Craft business model, but is not our focus and more easily understood than licensing. This article on Read Write Web explains our move away from custom work.

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