August 1st, 2006

It’s the Users Calling…They Want Their Money

by

The Guardian observes (via Jeff Jarvis) that YouTube has overtaken MySpace — but here’s the thing — it’s not really YouTube vs. MySpace. It’s user content and community hosted by YouTube vs. user content and community hosted by MySpace. The hosting is besides the point. It’s people like Fritz Grobe and Stephen Voltz who are getting people’s attention, not some entity called YouTube.

In case you’re not among the 5 million+ people who have seen it, Grobe and Voltz created an immensely clever and entertaining performance video that channels the explosive power of Mentos added to Diet Coke:

The video that you see above (press the play button after it loads) has appeared on YouTube and Google Video, but not with the permission of Grobe and Voltz. I got this code from their site, EepyBird, where they ask users:

Please do not post our videos on sites like YouTube and Google. [Emphasis theirs]

But why wouldn’t they want their video uploaded onto the immensely popular YouTube?

Because YouTube isn’t paying them a dime. Neither is Google.

Instead, Grobe and Voltz are distributing the video through Revver, which shares with them half the ad revenue generated by THEIR (i.e. Grobe’s and Voltz’s) content.

As BusinessWeek reported:

It took eight months for Fritz Grobe and Stephen Voltz to mastermind a now iconic Web video that shows them creating intricate fountains of soda by dropping 500 Mentos into 100 2-liter bottles of Diet Coke. The video became an instant hit after it was published in June on Revver, a service that shares ad revenue. Within days, bootlegs showed up on Google and YouTube. Voltz, a civil litigation lawyer, figured out the process for getting the videos removed. But as copies kept reappearing, Voltz learned that he had to keep contacting YouTube to take down each new version.

The Mentos/Diet Coke video was seen 5.5 million times on Revver and made Grobe and Voltz $30,000. But Voltz estimates they lost another $30,000 to pirated copies. And for several days recently, blogs buzzed with attempts to sort out the rights of artists to control uploaded videos. As the prospect grows for making money online, what started as a lark for many is becoming all too serious.

User-generated content is going through a novelty phase, where most “users” are content with attention as a form of recompense for their efforts. But for savvy “users” — or in this case video production artists, let’s get real here — getting paid in attention while hosting platforms like YouTube get all the take-to-the-bank revenue is sheer lunacy.

To all the Web 2.0 sites that think they are going make a fortune off of “free” user-generated content — it’s the users calling…they want their money. And if you don’t give it to them, they are going to take their content elsewhere.

UPDATE

Just came across this Heather Green post from a few days ago about Ze Frank’s Video Blog:

Frank is deliberately trying to create a show and a brand and he wants to figure out a way to support himself. That’s why he chose to upload his videos on Revver, a videos sharing service that shares revenues. But just as important, he’s trying to keep control of the archive of his shows so that sometime in the future he can figure out a way to make money with them.

Heather also references Amanda Congdon’s appeal regarding videos posted to Amanda UnBoomed (this one is very funny and worth watching):

Please do not upload my videos to YouTube or any other video hosting site that reserves the right to make commercial works out of other people’s vids. This video falls under the creative common non-commercial sharealike license. Thanks for understanding.

Ze Frank calls this trend a “coming of age” — indeed, it’s time for all the Web 2.0 business models to GROW UP.

Comments (27 Responses so far)

  1. I told you that I was tracking the netscape vs. digg business model discussion surrounding compensating contributors. This debate has continued to sizzle (particularly as youtube video distribution skyrockets) and theirs a great post at publishing 2.0

  2. ’t really need any more compensation for their efforts — but for those who would like to see a little something in return for all those millions of downloads, there is always Revver. As Scott Karp points out, the guys at Eepybird who did the Diet Coke and Mentos video got $30,000 because their video clip was posted on Revver, but lost out on that much or more because it was also posted to YouTube. Amanda Congdon and Ze Frank have both asked downloaders to

  3. keeping information flowing, relevant, accurate, etc to make a decent living and that will no doubt involve a compromise. In fact recompense is already becomning an issue as users pirate and upload artistically produced videos on YouTube and MySpace. Go here for that debate. If the next generationmedia doesn’t provide a revenue source for diligent collation, analysis, processing, updating etec of oinformation, then it’s little better than old media.

  4. Flickr, del.icio.us, and Wikipedia have been hugely successful because they facilitate user interaction and networking. Additionally, these sites rely on user generated content.   Scott Karp’s blog Publishing 2.0 discusses how YouTube has overtaken MySpace stating, “YouTube has overtaken MySpace — but here’s the thing — it’s not really YouTube vs. MySpace. It’s user content and community hosted by YouTube vs. user content and community hosted by

  5. Mientras tanto, mi recomendación es que aprovechen ahora para ver todos los videos que quieran (dentro de un orden, claro, que ya conocemos excluidos de YouTube por su canibalismo invasivo y culpable) porque, desde el mismo momento en que los pajeros del vídeo de Mentos y la Coca-cola Light reclaman su parte de las ganancias por semejante tontería, pueden dar por seguro que la feria del social networking y su infinita barra libre cultural está a punto de tocar a su fín. Así que apuren y digan gracias por el add a sus más allegados, que mañana ni

  6. the concept of the Third Enclosure, to indicate how some Web 2.0 companies are expropriating the content created by those who submit to them. As an example, we referred to the license of the Dropping Knowledge initiative. The Publishing 2.0 blog has been monitoring this emerging conflict much more intensively than us, so here’s a wrap-up of some of their recent material. They write: “The tension between Web 2.0 “openness” and the need to control corporate profits is likely to

  7. the concept of the Third Enclosure, to indicate how some Web 2.0 companies are expropriating the content created by those who submit to them. As an example, we referred to the license of the Dropping Knowledge initiative. The Publishing 2.0 blog has been monitoring this emerging conflict much more intensively than us, so here’s a wrap-up of some of their recent material. They write: “The tension between Web 2.0 “openness” and the need to control corporate profits is likely to

  8. the areas he posts on. He is an advocate of getting paid for work and we do share a simular viewpoint regarding sites like YouTube, Flicker, and any other number of post your stuff to our sites so we can sell your ass down the river sites. In his case it is about immediate gratification in terms of cash now

  9. Last summer, in It’s The Users Calling…They Want Their Money, Scott Karp wrote: User-generated content is going through a novelty phase, where most “users” are content with attention as a form of recompense for their efforts. But for savvy “users” — or in this case video production artists, let’s

  10. Yep. People that are complaining that Amanda C. and Ze Frank won’t allow their work on You Tube are missing the point that remains eternal — talented people like (and deserve) to be compensated for their hard work. Producing good video is not easy, as You Tube demonstrates 99,999,000 time a day.

  11. Nice update. :)

  12. Scott, just to be clear: You have it reversed. I picked up on the Guardian and did attribute and link to them; they, in turn, attributed to Alexa.

  13. making 30K for 8 months of work in creating this apparent “hit” doesn’t sound too economically feasible even if they were able to capture the additional estimate of 30K eaten away by piracy

  14. Jeff, it was too messy to fix the mistake with strikethroughs, so I’ll have to let your comment and mine stand as the record of my mistake in attributing the original observation to you rather than The Guardian. That said, it’s a very telling mistake, don’t you think — assuming that the blogger was the original source and that the newspaper just picked it up?

    In any case, thanks for the correction.

  15. Tony, you’ve got to start somewhere.

  16. Also, 8 months was probably not 8 hour days 5 days a week. At least I hope not. And now, they can produce a sequel likely in a week or two.

  17. YouTube is v1.0 for online video. Let’s face it, most people don’t have a clue about how to prep video for the web, or post it. So YouTube fills a certain niche. The next wave of service providers are going to step up and provide a solution for people who want to be compensated for their efforts. Fledgeling media site 9thx.com. claims to offer video sharing that compensates the content creator each time the content is shared. Not sure I believe it. But if it really works, it could be a step in the right direction. Technology tends to follow the money, so lets see if their really is any money out there in UG content.

  18. Something that I’m really curious about in the realm of user generated content is how much video is being posted to sites like youtube with the desire to get thousands or (hopefully) millions to watch it vs. how much is being posted by people like me, video of my kids that I can share with my family?

    While I like the idea of Revver sharing revenue with content creators, I’m not trying to generate revenue with my content, I’m just trying to let Grandma and Grandpa see their grandchildren. Is there any information out there to tell me if I’m a typical or highly atypical user of video sharing sites?

    If I’m a typical user, then the question about how these kinds of sites are going to make money is, to me, even more open ended that if they were only appealing to the “mass viewer market”.

  19. [...] From Scott Karp: User-generated content is going through a novelty phase, where most “users” are content with attention as a form of recompense for their efforts. But for savvy “users” — or in this case video production artists, let’s get real here — getting paid in attention while hosting platforms like YouTube get all the take-to-the-bank revenue is sheer lunacy. [...]

  20. [...] If I had talent, I imagine I would want to get paid. It seems to be coming to a head pretty fast [...]

  21. Two nitpicks:

    1. Grobe and Voltz didn’t lose $30k, unless you accept the bizarro-world MPAA calculus where every unpaid viewing represents exactly one lost full-price sale. Without the network effects of YouTube, would their video even have earned the $30k they did receive?

    2. Amanda Congdon has nothing to worry about from YouTube’s license, /if/ she’s not the one doing the uploading. As Lawrence Lessig recently wrote, someone who lacks the permission to distribute a video commercially (everyone except Amanda) also lacks the power to grant that permission to YouTube according to their license.

  22. [...] Many content creators are going to great lengths to keep their content off of YouTube because that service does not offer a revenue share to owners of video content. Other services, like Revver, pay a percentage of ad revenue back to users whose videos drive a lot of traffic. The producers of the popular Diet Coke/Mentos viral video have urged fans to keep it off of YouTube and Google Video, which shares no revenue with content creators. They estimate that they have made more than $30,000 off the video on Revver. [...]

  23. [...] Publishing 2.0 has a couple of posts about users making money from online content, specifically with reference to YouTube. [...]

  24. [...] I’ve argued before that a desire to share in the economic spoils may drive users to rebel over ownership and control of the content they create, but it may be that privacy concerns will be the first tipping point. [...]

  25. [...] summer, in It’s The Users Calling…They Want Their Money, I wrote: User-generated content is going through a novelty phase, where most “users” are [...]

  26. [...] It’s the Users Calling…They Want Their Money from Publishing 2.0 The Guardian observes (via Jeff Jarvis) that YouTube has overtaken MySpace [...]

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