Subscriptions: The Secret to a Sustainable Web Series?

This is the story of a web series that has things pretty well figured out, and serves as an inspiration that alternative distribution models can find a foothold — as long as the fan base is there.

The independent web series Venice, which recently wrapped its second season, was created by Crystal Chappell, well-known to soap opera fans as Olivia Spencer on longtime daytime favorite Guiding Light, which went off the air in 2009. It was Guiding Light‘s cancellation that lead to the creation of Venice; Chappell’s character on the show, Olivia Spenser, was in the middle of a very popular romance with Natalia Rivera (Jessica Leccia), and both fans and Chappell wanted to see that storyline continue — especially since, according to the New York Times (s nyt), the two ladies of “Otalia” had never shared an on-screen kiss.

Thus, with new characters (Procter & Gamble (s gp) owns the original ones) but the same actors, Venice launched in 2009 for web audiences — and a hot and heavy make-out scene in Episode One, which is available for free on YouTube (s GOOG) as a taste of the full series.

Chappell said that the decision to go with a subscription model was made very early on: “We realized it was a lot more expensive to produce and stream the show — so we thought that we could just charge everyone ten dollars, that would give us the quality we wanted to give it,” she said.

The intriguing thing about Venice is the size of its audience, which Chappell put at about 11,000 for Season One, and slightly fewer in Season Two. For most web series, that wouldn’t be nearly enough to keep the show going, but with each subscriber paying $10 per season, the show is self-sustaining. “We say it’s sponsored by the fans,” Chappell said.

The total cast and crew for a season ranges in the 50-60 person range, but Venice isn’t paying anyone’s rent year-round. Everyone has day jobs, including Chappell, who has returned to Days of Their Lives as Carly Manning. But things are looking good for Season Three, which is currently in pre-production and may include, among other things, an all-musical episode with original music. “If we can cover expenses and have rollover for season four, that’s fantastic,” Chappell said.

Currently, subscription fees cover at least 80 percent of the show’s $60,000-plus budget per season, Chappell says, with merchandise sales and product placement making up the remaining amount. And for many of those subscribers, especially the daytime soap fans, this is their first time watching web content.

This has made tech support a must, with the five-person IT staff working overtime to help users who have lost passwords or are having problems using the site, but it has also brought in a new audience — the sons and daughters of these fans, who sit down to watch the episodes after helping their mothers log in (many of whom have never watched a soap opera before).

The show is available globally in 133 countries, and people stay on the site for 32-46 minutes at a time. “That’s really good news for people who want to produce online,” Chappell said.

Chappell says that the cause of the audience drop-off from season one to season two was in part due to the fact that many soap fans were just tuning in because they were fans of the Otalia romance, which is not an enduring part of the series. The first episode does feature the two women together, but they remain broken up over the course of the series, which instead has become an ensemble drama.

While this cost the show some of its original Guiding Light base, which was instrumental to launching the series, fans do keep tuning in, especially thanks to guest appearances by other known soap actors like One Life to Live‘s Hillary B. Smith and Days of Our Lives‘s Michael Sabatino (who is also Chappell’s husband).

“They’re very, very loyal, those fanbases, it’s great,” Chappell said. “They want to see story — it always comes back to story for them.”

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