The Wallstrip web video show team is visiting California this week, and Tuesday night I had a chance to join them for dinner. I had a great time sitting next to Wallstrip writer/producer/director Adam Elend, half of BrightRED Pictures, which was sold to CBS along with the show in May.
Though Wallstrip is about making stocks fun and accessible, the core creative team — Elend, his partner Jeff Marks, and host Lindsay Campbell — comes from entertainment media. When they started, they knew about making documentaries and acting — not finance. Through Wallstrip, which only started last October, they’ve learned to talk the talk of Wall Street. But more importantly, they’ve become online media specialists, demonstrating the power of non-exclusive distribution through widgets and piles of aggregation sites.
And that’s really why CBS Interactive bought them — the $4 million or so the media giant spent was not commensurate with the web show’s small audience, as Elend readily admitted.
Wallstrip was absolutely overvalued if you’re talking about revenue or eyeballs. However, the amount of money CBS spent was relatively tiny for the media giant, not to mention Wallstrip founder and finance guru Howard Lindzon and the show’s VC investors, who had given it $600,000. (And furthermore, since next to nobody’s making money in web video yet, just about everything is overvalued.)
Still, tonight’s dinner made me reflect on just how significant the deal was. Here is a production team with nothing but smartly syndicated show to its name, and now it’s helping CBS figure out its digital strategy. Yet nobody is rigging up number of eyeballs-to-value calculators like when AOL bought Jason Calacanis’ Weblogs Inc for some $25 million a couple years back, and every blogger on Technorati declared his site to be worth thousands of dollars.
Just about every first-generation web video show maker has realized the power of her knowledge and incorporated a company to consult or build on her success. JETSET is Smashface Productions, Ask a Ninja is Beatbox Giant Productions, Lonelygirl15 is Telegraph Ave Productions. Many of them, to their credit, don’t want to be bought out and lose creative control. But there are going to be opportunities for those who do. And CBS Interactive SVP Betsy Morgan, who was also at the dinner, said the company is more than happy with its Wallstrip acquistion.
Elend, now stamped and validated as an online video guru, has developed some nugget-sized theories about the space. Here are a few that stuck in my brain:
- Don’t do anything on the web that would be better on TV.
- The mass audience will cease to exist.
- Distribute video where it’s contextually appropriate, so people find it when it’s relevant to them, and watch it then. Don’t worry about centralization.
- Authenticity is the number one rule for web video. Wallstrip is going to start doing product placement, but will make fun of itself (note: not the product) for doing so.