How a kids video start-up stays afloat

Totlol developer Ron Ilan had enough.

It had been just over a year since he launched his site of community-vetted YouTube videos--where kids can watch Elmo, cutesy animal videos, or "Big Comfy Couch" without the accidental off-color search mishap. And, despite its popularity, he couldn't find a way to make it sustainable or survivable without adverse impacts.

So, earlier this month, at two in the morning, he wrote a long explanatory note to Totlol's users that ended with, "I'm closing Totlol down. Life goes on." Then he went to sleep.

"I woke up to hundreds of messages," he says. While Ilan was asleep, TechCrunch wrote a short post about the closing of Totlol and "they stirred things up," says Ilan.

Parents and fans wrote Ilan imploring him to find some solution to keep Totlol from closing. He's found one for now but says he doesn't know how long it will last.

Ilan conceived of Totlol while digging through YouTube looking for videos that were appropriate for his young son. As he built up a list of bookmarks with suitable clips, he thought other parents were probably doing the same.

When he began building Totlol in 2008, YouTube had just released an upgrade that allowed independent developers to use YouTube as a platform. So, Ilan developed Totlol as an application in which users can create profiles, manage their favorites, and do specific searches.

Once launched, Totlol steadily grew; it went from Ilan's few bookmarks to more than 15,000 clips submitted by hundreds of parents. Since then, Totlol has received tons of press, was an official honoree in the 2009 Webby Awards, was named in the Top 100 Undiscovered Web Sites in 2008 by PC Magazine, and even has an iPhone application.

"The site has its niche," he says, "and has its love." While the audience is modest, it's attached. The problem is, like so many other Internet start-ups, Ilan cannot find a way to monetize Totlol.

When using YouTube as a platform, there are various restrictions that state it cannot be combined with any sort of marketing or advertising. Obviously, this makes it difficult to create revenue to hire staff. "The Web site doesn't run itself," Ilan says, "it needs some minimum care." After the outcry at his decision to shut Totlol down, he began to look for other ways to make the site work.

The solution he's temporarily come up with is to separate content from advertising. Now, when going to Totlol's home page, users see an advertiser-supported catalog of videos but cannot view any content until they register. Once logged in, though, the ads disappear.

However, this isn't an ideal situation for Ilan. "This setup is not something I'm proud of," he wrote on Totlol, "and certainly not what I intended Totlol to be."

Ilan will try this model for a few months to see if it works. If not, he may ask members to either donate or pay a fee and hope other ideas will pop up so he can avoid closing Totlol down. As Ilan said in the note he wrote at two in the morning, "I just can't support and develop it all by myself anymore."