Sorry, Not Bankable.

I recently heard a report on NPR’s “Marketplace” about amateur videographers making a killing on YouTube, most famously the father behind “David After Dentist,” and Nebraska teenager Lucas Cruikshank, the creator and star of “Hey, It’s Fred.”

“David After the Dentist” seen by about 60 million people, has resulted in direct sales of merchandise, along with licensing of David’s catch-phrase, “Is This Real Life?”

“Fred” has more than 400 million views and, as the New York Times recently reported, in a first-of-its-kind deal for children’s entertainment, “Fred: the Movie” will debut on Nickelodeon this summer. Execs are hoping to create a franchise and may follow up with a Fred Christmas movie.

These are happy accidents, but should indie filmmakers be using YouTube as a component of their finance plan?

No, they should not.

Licensing a zeitgeist like “David After Dentist” is merely capitalizing on the here and now, right now; maintaining this enthusiasm for two years while a the film version is produced is far cry from from trying to convert right now.  In addition, the Fred audience are tweens that move from fad to fad quickly and never look back.  Will Fred be as cool to tweens in two years?  The next generation of tweens will seek out the own Fred phenomenon.  Trying to recapture lightening in a bottle after a two year lag time is foolish enough, let along trying to do it with the shortest attention span demographic.

Massify, Lionsgate, and YouTube are sponsoring a program called LINC, the Lionsgate Incubator, to make and distribute short comedy films online. In January, YouTube announced it would collaborate with Sundance to rent the top films from the 2009 and 2010 festivals.

Participation in these filmmaker opportunities is not unlike earlier opportunities offered by AFI, Fox Searchlight, Sundance, and other festivals. Now there’s a digital component, but whether or not a career can be launched through such an opportunity depends on what an individual wants out of their profession.

There are also YouTube partnerships: allowing YouTube to place ads on your content and share in the rewards.

One of the successes within this paradigm is Demand Media, which “brings together writers, editors, experts and filmmakers to create informative content and develop online communities around a wide range of topics that run the gamut from healthy lifestyles to adventure travel to learning how to manage your personal finances.” Demand Media has launched more than 20 different YouTube channels, some of which are among the top-most-viewed on the site.

The cornerstone of Demand Media’s success is that they embrace the fact they’re in the search-engine-optimization business: “While many see YouTube as a destination site, we know that YouTube is also a top search engine. In fact, the largest percentage of our channel views comes from searches on YouTube. So we take that into account and utilize many of YouTube’s services for increasing discoverability of long-tail content so that we do not have to rely on hits from general search engines to be successful,” says EVP Stephen Kydd.

I was looking for an indie film use of YouTube and came across Example of 3 Lads, An American Fool, One Night – indie gay film – first posted YouTube segment four years ago – now over 165,000 views. Buy the DVD for 1.99 on Amazon. How significant is this to the filmmaker’s success?

Based on the internet hype of festival-darling, “Kick-ass”, Lionsgate (which paid $15m for US rights) was rumored to have tried to shake down exhibitors for a nearly 100% take of its opening weekend box office.  After a relatively disappointing $20m opening weekend, the the ability to quantify and parlay YouTube hits and online chatter into actual dollars, a negotiation position, or even a financing pitch is limited at best.  If the film ends up having legs and can get carried by word of mouth, then it could be a precedent in the making.

Some indie films have claimed success in raising funds online by posting spec trailers, but the most successful example I’ve found only  raised $60k over four years.  Four years is too long to wait.

Instead of layering the “old school” indie on top of a new platform, the smart approach is to follow Demands’ lead and recognize this is a new medium, with different requirements; it’s actually more a search engine than a content delivery system or distributor.