This keeps coming up, and I never bothered to dig up the link until now but hell, why not.
This is the Rebel.fm podcast where Matt Chandronait goes into detail about why Co-op (aka rebirth of the 1UP Show) failed financially. The Area5 guys have generally been quite open about the resources (money, time and effort) required to keep their business operating. Starts 97 minutes in.
Because there probably won't be a lot of people who will bother to listen to the clip (I know, I know, Arthur--but he doesn't do much talking during this stretch), here's the summary. An aside about the death of Co-op: when Area5 signed their contract with Revision3 to make Co-op, they didn't ask for a minimum payment, just a cut of advertising revenue. Matt says he (as the bizdev guy) made a mistake in not asking for that minimum. Now he's older and wiser etc. etc., but you could use this point against Area5 if you were feeling especially critical.
"What would it take to get Co-op running again?" was the initial question. Matt pegs the cost of a successful Kickstarter to do Co-op again at $600,000. Here's the breakdown
- Amazon takes a 30% cut.
- Salaries for the four principals need to be paid. "Right now we're actually paying ourselves a lot less than you need to live in San Francisco and we kind of make up for it in other ways."
- They also need an editorial staff + associated salaries, because they can't play all the games they do AND do video production at the same time. Aside: if you look at the 1UP Show this makes sense--any given episode of three game reviews required something like 8-12 people who had all played one of the three games.
- Matt estimates four editorial staff, and average salary of $60k for everyone. So for a year of Co-op, that's $480,000. You're already $60k over the Kickstarter take of $600k minus 30%.
- Office expenses would have to be $3k/month for rent, utilities, technology, etc.
- No health plans, or paid for largely from each employee's salary directly (i.e. against that $60k, though I'm inferring here).
- That's to operate for one year; at the end of the year they'd have to put up another Kickstarter to cover the next year's expenses. And assuming they spent all their time making Co-op (which, from other stories about 1UP Show production, seems totally plausible), they wouldn't be spending time doing the one-off projects for Capcom/Naughty Dog/etc., which is their core business right now.
- No bizdev people (besides Matt I suppose) or ad salespeople included in all this.
- No travel expenses included either.
Matt talks about how smaller-scale projects like the Street Fighter documentary are more feasible for them, and that hopefully making a name for themselves that way and taking on publisher-directed projects will allow them to set aside some cash for one-off documentaries of their own choosing.
Basically, what you want (and really, what I want, I loved the 1UP Show!) isn't financially feasible unless you rely on a lot of volunteer or contractor effort to handle things like reviewing and writing scripts (however vague) about games, or you want a lower-quality project done by someone who isn't Area5, whose whole schtick is professional-quality video content about games.