Web sites begin to pay for content

Social-networking trend sparks change

YouTube plans called key

January 31, 2007|By Eric Benderoff | Eric Benderoff,Chicago Tribune

The Internet's booming social-networking trend has reached a new milestone: Web sites are beginning to pay for content.

That means all those Web-savvy creative types, the people who post skateboarding videos or write a review about the neighborhood dry cleaner, could be compensated for their contributions.

The move to pay people for content had been developing slowly but reached a critical new phase when YouTube.com, the Internet's bellwether video site, confirmed Monday that it has plans to pay for user-generated content but did not give details.

The decision sets up the potential for a monumental shift in how people use and view networking sites. Until now, as user-generated content on the Web has grown, the only people making any money have been the site operators.

YouTube rose to prominence thanks largely to the goofy homemade videos that ordinary people created and posted. But when Google Inc. purchased it last year for $1.65 billion, the people responsible for those videos didn't receive a single cent from the mammoth Google payout.

Paying individual users for content also follows deals that Google, Yahoo Inc. and Apple Inc., among others, have been signing with networks and Hollywood studios for the right to sell and promote original content on the Web.

YouTube didn't provide details of why it wanted to start compensating individual creators. But a number of industry executives suggested that with both the Internet audience and ad revenue growing, competition for the best user-generated content also is intensifying. So those looking for an edge have started offering money.

By the end of this year, "almost every big site that focuses on viral video will have a revenue-sharing component to it," said Keith Richman, chief executive officer of Break.com, a site that pays $400 to $2,000 to contributors about 100 times a month for the exclusive rights to some videos.

Spymac.com is paying $3,000 to $5,000 a day to pools of people who create videos or other original materials, while Revver.com is sharing revenue from advertisements placed at the end of videos. If viewers click on the ad, the video's creator gets paid.

In April, Viewpoints.com, a new site based in Chicago, will feature paid reviewers and unpaid reviewers to write about restaurants, hotels, doctors and other services.

YouTube co-founder Chad Hurley disclosed the site's intentions over the weekend at an economic summit in Davos, Switzerland.

"We are getting an audience large enough where we have an opportunity to support creativity, to foster creativity through sharing revenue with our users," Hurley said. "So in the coming months we are going to be opening that up."

Hurley didn't indicate how YouTube would pay for content, but there is more than one way to share the wealth.

While some sites might be willing to pay for exclusive content, the culture and technology of the Web is such that viewers want to share cool videos with friends. That means that a video first appearing on YouTube will quickly get passed around, ending up on countless blogs or profile pages at MySpace.com.

Sites such as Revver.com and Spymac.com hope to tap into the "viral" nature of video sharing and still pay the content creators. At Spymac.com, creators will get paid no matter where the video is viewed, as long as it was first uploaded to Spymac.

"The more you promote your upload, and it becomes very popular, the more money you make," said Kevin April, Spymac's chief technology officer. Creators are "encouraged to market their own videos," he said.

At Revver.com, ads are embedded into the end of a video. If a viewer clicks on the ad, the content creator is paid. Revenue an ad generates is split 50-50 between Revver and the video creator.

Steven Starr, Revver's founder and CEO, said it was a matter of "recognition vs. reward." At YouTube, until now, video creators get recognition from viewers and pats on the virtual back for a job well-done. With Revver, "We believe it is incumbent on anybody who wants to be a creator of content to get paid," he said.

Money isn't the only attraction for content generators, however. Some people have done quite well by YouTube without it.

Actor Liam Sullivan's Shoes video on YouTube has been viewed more than 12 million times. The exposure given to his Kelly character, who sings the rebellious teenage ode to Shoes, has made him a sensation. The exposure has led to a deal with Apple, where Shoes is among the Top 10 comedy singles at the iTunes music store. He said he also will be part of an ensemble cast for a series launching on cable's VH1.

In contrast to Sullivan, the majority of YouTube creators are not interested in an entertainment career. But they would like to make a little money.

"I'd love to see money exchange hands if it's the right process," said Allen Weiner, an analyst with Gartner who follows the online video industry. "But I think before YouTube makes such statements, they need to get their ducks in a row."

For instance, he said, YouTube does not have a system in place for ads based on context.

"If I'm Ford, and I advertise on YouTube, do I want to be next to a video that says Ford cars are unsafe at any speed?" Weiner said. "That could be a problem."

Executives at Google and YouTube did not respond to questions about how they would implement payment for creators, or how they display advertising. But Google released a statement saying that "we are actively exploring a variety of ways to help the community to monetize content and expect to announce something in the coming months that users will embrace."

Eric Benderoff writes for the Chicago Tribune.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.