Analyst Report: Will Micropayments Make Money for Web Video?


The question of making money with web video is complicated, but the simplest solution is this: Charge people every time they want to watch it. Among the monetization possibilities a web video creator might consider are micropayments, which allow users to pay minimal fees (usually a dollar or so) to access content online. But the tools for enabling such small-scale payments are, so far, relatively limited, especially for independent creators. Until recently, their choices have consisted of ad hoc solutions (like setting up a private viewing site) or giving their content to large organizations like YouTube, which don’t disclose up front how much revenue sharing a creator can hope to earn.

Change is afoot, however. At SXSW 2010, I interviewed Rob Millis and Will Coghlin, who have transitioned over the last year from hosting their own web series to making a player of their own. The Dynamo Player, currently in beta, integrates PayPal’s payment process into a custom player that allows creators to set their own value for their content and get back a clean 70 percent of whatever is earned. The video of our conversation is below.

One unconventional element of the Dynamo Player is that Millis and Coghlin have deliberately kept their sign-up process quite simple in comparison to the lengthy and complex contracts sites like YouTube make potential users sign. This does leave the two open to potential liabilities, such as piracy violations, as discussed in the interview above. But as Coghlin says towards the end of the clip, the Dynamo player does have a real opportunity to allow creators to engage with viewers who “are ready to put their money where their mouth is when it comes to supporting great independent content. Creators haven’t had a tool like this to directly ask for support from their audience until now.”

Dynamo remains in a closed beta, but another tool just leaving open beta is Invideous, which can be integrated into Brightcove and JW players (thus not requiring users to switch from one player to another). Invideous also includes other monetization ideas, such as a subscription service that would excuse users from having to watch ads and being able to buy items featured within a video.

Though Dynamo and Invideous represent a somewhat limited set of examples, micropayment-enabling tools represent a potential growth area for developers looking to engage with a rising niche. The key to this will be making potential customers aware of what’s available — and getting the traditionally free-is-for-me web community on board. Because if a sustainable revenue stream for quality independent content can be created, it could not only change the marketplace for web video, but bring in a new class of creative talent.

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