You (and your students) need decent internet connections for it to work well. I've been teaching drums via Skype for a while, it's very effective.
As for how I got started, I had a student in Baltimore before I moved away four years ago. Two years ago that student asked me via FB if I teach via Skype, I decided to try it out. Since then I picked up two more internet students via word of mouth. This isn't a lot, but it's a start. I don't do anything to promote it, but if I gain more students this way, why not?
House Drummer & Blues Bassist for CWB