SHARING THE WEALTH
A depressing element of the music filesharing revolution has been the suggestion by its proponents that tour income and t-shirt sales will be the new revenue model for bands losing the royalties they would have (in a perfect world) received from consumers buying their music. I’ve wondered, what if a band or musician didn’t want to spend his life touring and just wanted to make records?
Obviously a similar challenge is about to face filmmakers as increasing storage capacities and new digital download services arise to reshape the way films are distributed. Already sites like the Google Video Store and You Tube are shaping up to be significant players in the video distribution arena. According to a good piece by Victor Keegan in The Guardian today, You Tube is already streaming 30 million videos a day. “Video is definitely the new rock ‘n’ roll,” he writes, “promising to be the killer application of broadband internet as it is rolled out at increasing speed across the world.”
But are there revenue models possible other than giving away videos for free or else charging the customer for the download? The Guardian piece notes a new company called Revver that offers an alternative:
For instance Revver (yet to be formally launched) offers a similar service to YouTube but gives the person who submits the video a 50% (yes, 50%) share in the revenue generated by advertising.
Each video has an advert tagged to the end of it. If the viewer clicks on it, it generates revenue that is shared.
This works even if you email the video to someone else, or put it up on another site such as YouTube or del.icio.us. In fact a site that posts or links to your video will get 20% of the income, and the rest is split 50/50 between you and Revver.
Also, you can veto adverts. If you don’t want, say, tobacco advertising to be linked to your site, then you can tick a box to say so.
What I like about Revver is that it seems to have a genuine social dimension and is enfranchising the content provider in a way that other companies in the west are not.
Revver’s not the only company exploring this model. There’s Brightcove, which was profiled in The Wall Street Journal on February 21.
From that piece by Peter Grant:
Distributors like Brightcove are eyeing the promise of advertising tied to online video content. The idea is similar to the way Google syndicates advertising to third-party Web sites, in which both sides share the resulting revenue.
Brightcove’s two-member sales staff sells 15- and 30-second commercials that appear before many videos wherever they are played. Typically, the company will give the lion’s share of the ad revenue to the video’s producer, keep some for itself and give some to the hosting site.
If video suppliers such as Reuters want to sell their own ads alongside the video, instead of those sold by Brightcove, the technology company would charge Reuters a fee. Brightcove also runs a revenue-sharing system for people who want to sell video content for consumers to download onto their computers.
Brightcove is just one player in a race under way to build new video networks on the Web. One of the first entrants was Roo Group Inc. Much like Brightcove, it generally acts as a middleman between video producers and Web sites. Roo profits by selling technology, services and ads inserted in videos. Blinkx Inc. has developed a search engine that uses a number of techniques, including voice recognition, to hunt out online video. Blinkx sells ads on its site and in videos supplied by 50 partners. YouTube Inc. runs more of a community site and has amassed a huge library of mostly individually produced videos. Its profit comes mostly from banner ads on its Web site for now.
Brightcove has a blog that tracks what’s going on at the company as well as the video-on-the-web world at large, announces job openings, and links to interesting articles (many of which mention Brightcove) like this one from Business 2.0‘s Erick Schonfeld appearing on CNN.com. It announces the new “microchunk” trend, by which video entertainment is reduced to bite-sized morsels and spread virally throughout the web.
From Schonfeld’s piece:
According to Fred Wilson, a partner at Union Square Ventures who sat on the board of bookmark-sharing startup Del.icio.us until it was sold to Yahoo (Research), there are rules for distributing content in the future. First, of course, microchunk it: Reduce entertainment to its simplest discrete form, be it a blog post, a music track, or a skit.
Second, free it: Let people download, view, read, or listen without charge. Third, share it: Let consumers subscribe to content through RSS- and podcast-style feeds so they can enjoy it wherever and whenever they like. Finally, the moneymaking part: Put ads and tracking systems into the digital content itself.
Already, a startup called Brightcove is helping media giants implement those rules. Based in Cambridge, Mass., the company can deliver video content as individual shows or chunked-up segments, attach ads, and syndicate the video. All video is served from Brightcove’s network, but to viewers it appears to be coming from AOL or any of dozens of other branded sites.
If microchunking — with all its inherent network effects — is harnessed correctly, it could one day prove more profitable than the old centralized media model. Which is why investors are watching the rise of ad-supported video chunks closely. If the TiVo (Research) generation can put up with the occasional commercial, Samberg and Stewart won’t be the only ones smiling.