1. People like watching online video.
2. Advertisers prefer professional content over UGC.
3. Media companies want more videos on their websites but may not have the know-how or staff.
4. Make a ton of professional-looking videos and sell them to media companies.
100 Million total streams in just four years of existence is very impressive and their growth trajectory should have them breaking 500 million by 2011. Most impressive is Karbasfrooshan's ability to monetize the content and Rocha writes a bit about that as well:
WatchMojo has been a sustainable business precisely because it does more than just pump out video content. It also acts as a broker between advertisers and websites that want to increase engagement with video.
In addition to licencing its videos to video-hungry sites, it also customizes its own massive video library for advertisers. For example, McDonald's wanted some pre-roll ads targetting moms to appear on a kids' website. WatchMojo re-cut videos on yoga, beauty and fitness with the McDonald's brand attached to it.
In a similar deal with the Canadian Association of Optometrists, it created videos on eye health which appeared on MySpace, Facebook, and several health websites.
"More and more, advertisers seek to reach audiences based on psychodemographics and interest, if you're McD's, you want to reach mothers and mothers tend to be in yoga and all that stuff," Karbasfrooshan recently told me.
Keep an eye on WatchMojo.com and if you're in Montreal on February 1st, be sure to sign up for Mobile Monday Montreal where Karbasfrooshan will be a panelist on mobile video.