YouTube makes its power play

18 Comments

If you are Revver or Metacafe, then it has to be the happiest day of your tiny life. YouTube, the 800-pound gorilla just validated your business model by deciding to pay their creators, a cut of the advertising action.

If you are Revver or Metacafe, it is also the worst day of your life, because now a deep pocketed incumbent is going to play havoc with your business model, and hope to run you out of town.

Chad Hurley might have made this announcement in Davos, but the reverberations will be felt around the online video community.

YouTube-Google are using their massive cash reserves and their seemingly unstoppable ad-machine to take the online video sector by the scruff, and giving it a vigorous shake, in hopes that some of the weaker ones would suffer a coronary.

Little guys now have to get really creative and figure out a way to get around the giant Google ATM and beat The Goobe.

Of course, Goobe is not the only one attempting this pay-to-play model. C/Net’s Project Spotlight is another twist on paying the creators.

PS: YouTube is the latest company to join the growing ranks of the iCompanies, enterprises that include their community into their economic ecosystem.

18 Comments

Micki Krimmel

It’s true that we are excited by the news. We’re jumping up and down in our tiny cubicles. :) The fact that YouTube is moving in this direction is good for all creators though I think GZ’s point above raises an interesting question.

Revver’s business model was built upon the idea that creators deserve to be rewarded for their contributions to the network. The system is completely democratic. We don’t struggle with copyright issues and we share revenue with both creators and sharers of video. Because of our creator-friendly TOS, many independent artists have found a happy home for their work on Revver and some have done quite well financially.

It will be interesting to see how YouTube rolls out their revenue-sharing model and how that piece of the puzzle fits into the larger marketplace.

Spud

I like this move by Google / YouTube. It was always going to happen once oogle got involved, especially as the likes of MetaCafe have implemented there scheme successfully. Now I just have to create some cool vids and watcht eh $’s roll in.

Willem

I am wondering how people react on this kind of monatization if the driver has been online collectivism

Om Malik

I guess some of the users could and should make a nice living, especially if they are creating good content that others enjoy.

I mean those are the folks who are making a go of it in Metacafe and Revver’s case, so why not YouTube.

tomo

This decision is another step in the direction of not only free internet access for end users, but also compensating them for their time…ie, paying users to go online and then selling the ability to access them to marketers.

Om Malik

Billy

interesting point is that we are going to see them make the “sharing move” given their traffic volume and their “market leader” status, they would be able to monetize the creations better.

which means that the share the monies to the creators could be higher. Hypothetically speaking of course.

gz

One aspect not getting enough play is that this also creates a better monetization platform for the traditional media giants. I think it is their requirements that will drive the ultimate parameters of this platform.

Ved

Revenue sharing model in Video has the potential to reshape the entire entertainment industry. But, it would depend on some degree on how much percentage of revenue youtube is willing to share.

Billy

I think we need to wait and see exactly what the terms of this revenue sharing offer are. Hurley himself notes that if another video sharing site were to pay more that users motivated by money would simply move to that platform. I don’t think this is as much of a threat to other video sharing sites as it might seem at first glance.

Richard Giles

What I think will be interesting is if they decide to share revenue for referral. If anyone with a webpage can make a dime out of embedding some YouTube video it’s likely to extend their reach. It’ll also be amazing to see what this does to the ecosystem around video, and the effects it could have on the viral nature of certain videos.

shadilac

@MrDoubt – People don’t have to manually add their pages to Google, they come and get ’em. And people don’t create websites specifically to get a link in the Google search engine, whereas on Youtube people create original content specifically for that medium. They need incentives to encourage people to create more and better original content and upload it to their site. It couldn’t be any more different.

DrDoubt

This is as confusing as anything else. By this logic, Google must be paying all indexed websites some money bcos it is by linking to them that Google Search makes all money.

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