Last year was the year that online video stopped being something you watched, and started becoming something you shared. As a response, Light Reading issued a comprehensive look at the space and ranked the Top Ten Video Sharing Websites that we felt provided the best service.
The response was huge, and it's no surprise: Online video now makes up the single biggest traffic category traversing the Internet. (See Surveys: Internet Traffic Touched by YouTube.) And a lot is at stake for telecommunications carriers as online video's popularity soars.
As we've noted before, these services allow producers and advertisers to connect with and extract money from audiences all over the world. (See Some Notes on Kyte's Flight.) And carriers need to find out how they fit into this great exchange that is happening on their networks.
This report is about online video sharing, but we're taking a different slant on the subject. We noticed that as the world went viral with video, something else happened: People got paid.
Following YouTube Inc. 's acquisition last year, more and more online video sharing sites went about trying to differentiate themselves by adding contests, prizes, and real revenue-making opportunities for their users the content creators. This made us wonder: How many video sharing Websites out there offer a way to get paid? And how much money could you actually make?
This report is an attempt at finding the answer to those questions, and it provides a general look at the constantly changing world of video sharing. There is a great variety of video sharing sites and a wide range of what they are trying to be. Some of the companies that operate video sharing Websites like VideoEgg, Blip.tv , Eyespot Corp. , and Reality Digital, to name a few are just as much providers of hosting, editing, and video sharing capabilities of other Websites and networks. (See Look What Eyespotted and Big Changes at Blip.) Even though they're most widely known as content destinations, these companies are service providers, too.
Still, most of the online video sharing sites are consumed with finding a decent-sized audience. So, in the end, what's the point? There are several positive outcomes for the video-sharing revolution:
Video could become an attractive vehicle for advertisers.
Video sites could be bought by larger media companies that are looking for inventory or for more places to serve ads.
Video sites could become more effective partners for telecom and cellular operators the companies that see Internet video as a way to set themselves apart from run-of-the-mill cable TV. (See Verizon, Revver Team.)
What's also noteworthy is that market leader YouTube, and its parent, Google (Nasdaq: GOOG), haven't shown up in the video sharing and compensation market yet. In terms of rewarding content makers, both seem keen on the idea but haven't yet put forth any specifics.
Let's get started with a profile of eight online video sharing sites that either have been paying users or are about to start. The group we picked, we think, gives a glimpse of just how different some of these pay-for-content gimmicks can be. Here are the Big Eight, the sites that say they'll pay up for good content:
In addition, out of the 75 online video sharing Websites we tracked, we found at least 14 that mentioned some way of paying users back for popular content. Table 1 is a comprehensive list of who pays what:
Each month, based on its own "mysterious whims" and viewer rankings, the site's big cheeses pick a group of clips run on indie film site AtomFilms. The creators of the selected clips get $500.
You choose where ads appear with your video (pre-roll, post-roll, banners, etc.) as you opt in to Blip.tv's advertising program. More advanced users can even choose which one of the several advertising companies they want serving ads for them. Whatever the ad placement and ad mix, Blip's bottom line is that it splits all advertising revenue generated from user content 50/50 with the users. If you do really well, the company represent you to media buyers and upon securing a sponsorship deal.
Even a popular Internet video won't necessarily rake in the big bucks here. But if you know you make compelling stuff for the site's mostly male audience, your chances of cashing in are pretty good. Break.com's staff pick their favorite videos to go on the site's home page. If they pick yours, you get $400. If they decide to give it a featured thumbnail somewhere else, you get $50.
Under its newly announced bonus program, independent filmmakers are directly compensated for every audience member they attract, receiving 10 cents cash for each download of a contributed work. Back up the Brink's truck.
Eefoof.com pays its content contributors based on the hits they generate. The company measures each submitter's page views, calculates the percentage of hits that content accounted for, then distributes a percentage of the site's profits proportionally to each content creator. It won't make you rich. But a few good months might earn you enough to upgrade your video iPod.
According to Google Video's terms of use, you can set a price that users have to pay to see your videos and Google pays up to 70 percent of the gross revenues from the fees your video fetches. But the company has recently disabled that set-your-own-price, pay-per-view feature and is now experimenting with other ways to compensate content producers.
HungryFlix pays its content providers 60% of all sales (after PayPal fees). Content providers must charge a minimum price of 99 cents per movie. So your share of a 99 cent movie download would be about 40 cents, based on the site's most current info.
This company pools 80 percent of its ad revenues and pays based on how much of the total site traffic your content generated. On the one hand, this is an improvement over the site's original model, which required a $14.95 montly fee and only pooled the user fees. However, thanks to that earlier business model, the site's not very popular. So getting a big pay day might be a tall order.
Metacafe pays $5 per 1,000 page views. But, first you have to hit 20,000 page views to qualify. So, assuming your video would get that many page views, Metacafe asks that you take a pass on the first $100 you would have earned. Your video must also maintain a 3.0 user rating in order to qualify for payment.
You can sell content via its online store (like a song or music video, if you're in a band). You can allow ads on your uploaded videos and keep between 50 percent and 80 percent of the revenue your content generates. Finally, based on your item's popularity, you can earn points redeemable for music or video downloads.
The site will split ad revenue with you 50/50 based on how many page views your video generates. However, viewers must click on post-roll ads at the end of your video in order for the page view to count towards revenue. Maybe you should just get a day job.
Naturally, you'd fill up quite a few cocktail napkins trying to figure out how much bread you can make on one site versus another. Well, again, we did all the work for you. Table 2 goes back to the eight sites we profiled, plugs in some numbers, and gives you a look at what it really takes to make a buck on each site:
Table 2: Online Video: What Would They Pay?
Website
Gimmick
Scenario: If the site gets 1 million hits in one month, books $100,000 in total ad revenues, AND your content on that site gets 10,000 page views and helps serve $5,000 worth of ads, you would earn
You choose where ads appear with your video and, if you want to, which ad companies will serve the ads. Blip will split all advertising revenue generated from user content 50/50 with the users. If you do really well, the company will represent you to media buyers and upon securing a sponsorship deal.
$2,500 Whether by click-thrus or just banners, if you can pull off serving $5,000 worth of ads in a month, you get to keep half.
Break.com's staff picks their favorite videos to go on the site's home page. If they pick yours, you get $400. If they decide to give it a featured thumbnail somewhere else, you get $50.
You'd have to hope they like your video enough to put it on the Break.com home page.
The company measures each submitter's page views, calculates the percentage of hits that content accounted for, then distributes a percentage of the site's profits proportionally to each content creator.
$400 Your content was responsible for 1 percent of their ad revenues (so $1,000). Out of that $1,000, they shave 20 percent for expenses, then take half of the remaining profit.
The site will split ad revenue with you 50/50 based on how many page views your video generates. However, viewers must click on post-roll ads at the end of your video in order for the page view to count towards revenue.
$2,500 If someone clicks on every single ad following one of your videos; $0 if no one clicks on the ads following your videos.
Note: Data is based on a view of leading online video Websites ranked by market share of visits in 2006. Hitwise counts market share as the percentage of traffic to the site, based on Hitwise sample of 10 million US Internet users.
Clearly, some of them are in need of a good gimmick to boost their traffic. Interesting, too, is that, so far in 2007, YouTube is still the king the place where more people spend more time watching online videos:
Table 4: Online Video: January 2007 Audience Figures
* Note: Audience measured for this site is smaller than the standard sample size measured by Nielsen/NetRatings, so the projected audience figures may vary greatly from month to month.
** These Websites have insufficient sample sizes for reliable projection of audience size.
Finally, here is our most up-to-date look at the online video sharing space, in general The Web Video Cheat Sheet:
The Cheat Sheet, by the way, is updated several times a year, as more sites are added and as features and usage terms change. The most up-to-date list will always be here, at our easy-to-remember URL: www.lightreading.com/videoshare.
Phil Harvey, Managing Editor, and Raymond McConville, Reporter, Light Reading
In table 1 it says that a user cannot get paid through Veoh.com, but their Pro Publisher Terms and Conditions claim otherwise.
"Veoh provides you with the option of charging viewers to view the material you upload to the Veoh Services. If you select such an option, (for example, a pay to own option or a pay to rent option) Veoh will share revenue with you,..." (http://appserver.veoh.com/static/corporate/proTerms.html)
The blogs and comments are the opinions only of the writers and do not reflect the views of Light Reading. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
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