Next Stop: Profitability In The Real Estate Video Business

May 12, 2007

 Soooooo  Close…

I’ve had the blog post in draft for several months now – we’ve been frustratingly close but not yet at net profitability. We’ll likely *just* miss again this month primarily due to travel costs to Europe at the end of the month as well as costs associated with spinning up our office in Central America that will serve Panama and Costa Rica. We also have some new narration and editing hires in Bolivia to bring on in the next week in order to process the increased volume of incoming real estate videos. In short, May isn’t going to be the month.

Profitability Within A Month

That said, I’ll go out on a limb and predict that our real estate video operation will likely be profitable for the month of June (and July as well).  This is based on new signed contracts for licensed video narration in South America, individual property videos reserved for June, and some reasonable percentage of sales in our foreseeable sales pipeline actually closing within the next two months.  For the record, I’m not including any inbound revenue from anticipated new business from Europe, online advertising, sponsorship, real estate video training, or any other secondary income not directly based on providing co-branded or private label real estate video services directly to customers but I am including the costs of such activities in order to calculate net profitability.

It Is Still Early In This Business Space

Some are already anointing their pre-determined winners and also-rans in the real estate video business based on flash players (of all things).  There are many excellent companies on that list but I’d respond that there is still a loooong way to go and many adoption hurdles left in the fledgling business space of real estate video. At some point, the flash player might become a key differentiator but, at this point, it is hardly the critical piece of the business issue at hand – if it was, then our real estate video network wouldn’t be getting nearly 60-70,000 monthly video views and the most popular embedded players like YouTube would be getting far more traffic than they actually are.  

Here is the reality: we’ll release our embeddable video player shortly and our real estate traffic will see some increase from where it currently is. However, this will translate into little or no direct incremental revenue until the market matures which is still a year or more off.  Additionally, in the coming months, you’ll see a growing number of agreements announced in the real estate video space but remember that there is a big difference between announcing agreements with known organizations and converting those agreements to a non-trivial amount of cash in the short term. So, what is the better indicator of success in an immature real estate video market – having a relatively commoditized flash player or having people actually watch property videos, brokers selling properties as a result, and achieving corporate  profitability?   If nothing else, profitability from operations is a established indicator of doing *something* right and will ultimately be another step in gaining respectability.

Back To South America

I’ll be back in our offices in South America on Monday.  We have more properties to film today and I fly out on Sunday so likely no more blog posts until then….


One comment

  1. […] to announce that we have met our profitability goals for the month of June 2007. We have been close for some time. Revenue for June will exceed total costs (even indirect non-real estate video related costs such […]

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