Metacafe Chops Producer Payments

Metacafe has changed the payment conditions of its Producer Rewards program, lowering the the amount paid to video creators by more than half. According to a post on Metacafe’s blog today, under the new terms, producers accepted into the program will earn $2 for every 1,000 views. Previously, producers were paid $5 for every 1,000 views.

Additionally, Metacafe now explicitly excludes views from outside the U.S. from counting toward those producer rewards. So producers will only get that two bucks when 1,000 views from within the U.S. are reached. These new payment terms start Nov. 1 and will affect both new and existing program participants.

Echoing (almost the exactly) the words on the blog post, Michelle Cox, Metacafe’s communication director, told me in a phone interview, “The change is all about better aligning the program costs with our revenues. We are continuing to make sure that we are running the business in a prudent fashion.” Cox also said that Metacafe had been subsidizing the Producer Reward program quite heavily up until this change.

Metacafe’s newly minted focus on the U.S. is similar to an unpopular move made by Veoh earlier this year, when it blocked all but 33 countries from viewing its site. “Generally speaking, the advertisers that we are working with run U.S. specific campaigns,” said Cox. Translation: You good folks in France running up a video’s numbers aren’t really helping us earn money.

Cox says the company has paid out $1.5 million dollars to almost a thousand creators since the company launched the Producer Rewards program two years ago.

Metacafe employs 75 people across offices in Palo Alto, New York, L.A. and Tel Aviv. The company laid off 6 – 8 percent of its staff in Tel Aviv in the spring but hasn’t made layoffs since, according to Cox. In April of this year, both Metacafe founders, neither of which were involved in the day-to-day operations cashed out their shares in the company and left. (CORRECTION: Founder and chief creative officer Eyal Hertzog is still with the company)

The company has raised $45 million in funding, including a $30 million round it took in August of 2007. Cox says Metacafe is currently not seeking additional funding.


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