Independent creators hoping to make a buck off their videos have one less outlet to do so. Metacafe announced yesterday that it will terminate its Producer Rewards Program June 30.
In a corporate blog post, Metacafe said:
While we have worked to maintain the Producer Rewards program during the past year, we are now faced with a market environment that requires us to focus on profitability in the near term and are not in the position to continue to subsidize the program.
The move to halt payment for UGC isn’t surprising. In October of last year, the site chopped producer payments by more than half to just $2 for every 1,000 views that came from within the United States.
Additionally, the site has recently shifted to focus more on premium content, creating hubs for movie trailers, music videos, and sports highlights. Metacafe will still accept work from independent creators — they just won’t be getting paid.
Unfortunately, Metacafe couldn’t have picked a worse time to venture into the world of premium content. Hulu has content from ABC, NBC, and FOX locked up for the next two years. YouTube is making its own premium content moves with Disney clips, movies and TV shows from Sony, and music from Universal. Not to mention big media companies like CBS, Warner Bros. and Comcast all have their own premium content initiatives.
Metacafe still has a sizable audience. Quantcast pegs the site’s global traffic at a little more than 43.2 million people per month, but of those, only 12.7 million come from the U.S. Even with nice-sized traffic, Metacafe faces many deep-pocketed players that have massive traditional media outlets for promotion.
Metacafe has raised $45 million in funding and, according to a spokesperson, is not actively seeking additional financing at this time. We learned today that in addition to the 6 percent to 8 percent layoffs at its Tel Aviv office last spring, Metacafe went through an additional round of layoffs in that same office late last year. The Metacafe rep didn’t have the specific number, but said it was “under 10 percent” of the total number of Metacafe employees, which at last known count was 75.
Back in 2006, when the online video boom really started taking off, Metacafe, along with Revver and AtomFilms (disclosure: I used to work there), were among a handful of independent video sites paying creators. Metacafe has now halted its payment program; Revver was bought at a loss and has since faded even more; and AtomFilms was bought by Viacom though still continues its payment program. Ironically, YouTube, which built its massive audience by paying creators nothing, later implemented its own partner payment program.