From the February 2006 issue of Entrepreneur

When Steve Jobs unveiled Apple's video iPod, the biggest names in media moguldom started scrambling to get their shows on the tiny screen. A half-million cell phone owners were already tuned in to MobiTVand Verizon Wireless' VCast. But Jobs' announcement catapulted video podcasting into prime time.

Within weeks of the debut, Apple iTunes had sold a million episodes of popular TV shows at two bucks a throw. Suddenly, it's hip to watch TV on a 2- to 3-inch display. Better yet, video podcasting--or vodcasting--is a marketing medium any entrepreneur can afford.

Vodcasts can be made with any videocam or even some cell phones and can be shared through a growing list of free or low-cost distributors. For example, the nonprofit Open Media Network offers free distribution, while MPEG Nation charges just $5 to host a video for six months. Sites like FilmLoop and Pic2Vid let you build a video using digital pictures and a voice-over. You have to use their players for clip creation and digital rights management, but videos are easily reproduced for different communities.

Web-savvy ad agencies like Los Angeles-based IndieClick can help produce your videos and find the right audience. A video marketing campaign might not only be low-budget--it might even be self-supporting, says IndieClick President Heather Luttrell. Distributors like Revver have ways to track viewers and will share the revenue from ads that get displayed at the end of clips or as small, transparent overlays.

"We might start by spending $1,000 this month on three different podcasting initiatives and generate $1,100 in revenue," explains Luttrell. "We see what works and then target the highest revenue-generating venues."

Who's watching? Basically, your kids and millions of other cell phone-packing young folk already dialed into text messaging, blogging, online gaming and, of course, MTV. You need a message that plays in those venues. If you have one, it can really work for you: One recent IndieClick vodcast garnered 1 million downloads.

Youth market not on your radar? Don't worry, says Luttrell: Distribution networks and audiences will broaden to other demographics over time.