How to Score with How-to Video

Niche players are resuscitating the subscription model to make money off homemade instructional websites.

By Paul Sloan, Business 2.0 Magazine editor-at-large

(Business 2.0 Magazine) -- When Evan Margolin launched SalsaBootCamp to sell instructional video clips online, everyone he knew told him it was a crazy idea. Why would people offer up their credit cards to him - a dance teacher known only to his students in San Francisco - when they could watch thousands of dance videos for free on sites like YouTube?

Yet aspiring salsa dancers have signed up in droves, even as Margolin has raised the monthly subscription price from $9 to $37. Four months after its launch, is making $20,000 a month.

SALSA KING: Evan Margolin's homemade online dance videos are pulling in $20,000 a month in subscription fees - just four months after they went on sale.

"If I wasn't watching the money roll in," Margolin says, "I wouldn't believe it myself."

Big media companies have largely stopped selling subscriptions for their online content, opting instead to build traffic and cram their sites with ads. Yet the subscription model has become a shrewd way for smaller players to make money, especially among the super-niche sites of the Net. There are subscription sites for everything from online soccer lessons for kids to becoming a personal fitness trainer.

Making a go at this, in fact, takes zero technical knowledge and not much up-front money. The key requirement is having a subject about which you can offer some know-how, so you can create a service that people will willingly pay for month after month.

Margolin, 36, found his niche a decade ago, when his big brother dragged him to a salsa club. He eventually became a dance teacher, although his main income has come from various Internet marketing jobs. Margolin says he had toyed with the idea of creating a subscription dance site off and on since 2001 but never did it because the technology wasn't good enough: The video was cumbersome and slow.

Then last summer one of his students began recording the dance class on a camera phone, burning it to a CD, and asking him to post it on a website. "I thought, 'Damn, maybe the time is right,'" Margolin says.

So he got started. A number of online software tools now exist to run a subscription business, and Margolin chose one called Membergate. It costs a few thousand dollars, but it handles everything: video support, hosting, payment methods, and so on. He then paid a student $11 an hour to videotape his dance moves. The quality is raw; no fancy film-editing software needed here.

Next, Margolin spent $1,000 or so to give the site some useful Web cred, which he says people too often mistakenly scrimp on.

He posted the Better Business Bureau's online seal, allowing users to file complaints, and the TRUSTe seal, which verifies that an e-commerce site is secure. He also added testimonials from students. Some are written comments; others are video clips - cheesy-looking interviews attesting to Margolin's skills. "Hokey works if it's real," the instructor says.(If you're starting from scratch, Margolin suggests, offer your product for free at first and ask people who like it to post comments.)

After a few weeks, the site was ready to go. Margolin drove traffic by buying paid search ads on Google (Charts) and Yahoo (Charts) and by spreading the word in online dance communities. "If you're really passionate about the topic," he says, "you'll know most of the resources to turn to."

He currently has 1,000 members and is adding a few every day. The trick now is to keep it up: keep marketing, keep adding content. It's not a do-nothing path to riches. But if you can land even a few hundred subscribers, you can make some sweet, and profitable, moves.

Editor-at-large Paul Sloan covers the ever-changing Internet landscape on his blog, the Key. Top of page

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