Startup Looks for Profits in Online Video

Discussion in 'General Discussion' started by Quigley_Sharps, Oct 30, 2005.

  1. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    LOS ANGELES - The Internet is buzzing with amateur videos, the kind that feature kids lip-synching or imitating Jedi knights. They get e-mailed and posted on Web sites and often become the topic of water cooler chat. But few, if any, make money.

    A new company called Revver is trying to change that by attaching advertising to the videos and giving the creators a cut of the profits.

    The technology, which also tracks the content as it is shared across the Web, is not limited to amateurs. Major media companies, which are just beginning to experiment with offering TV shows and movies online, are also looking for ways to distribute across peer-to-peer networks while avoiding piracy.

    Revver is the brainchild of Ian Clarke, the man behind the Freenet file-sharing network; Steven Starr, a former Hollywood agent and co-creator of MTV's "The State;" and Oliver Luckett, who recently spearheaded the Norman Lear "Declare Yourself" voter registration campaign.

    It is also backed by the same venture capital company that bankrolled Internet phone provider Skype Technologies SA, which eBay Inc. recently acquired for $2.6 billion.

    The three see an opportunity in the growing number of videos being produced by people with access to sophisticated photo and editing tools and viewed over high-speed Internet connections.

    "It's like Hollywood 1908," Starr said. "It's the very, very, very beginning of video online and the behaviors we're seeing are all early stage."

    Apple Computer Inc. has been cataloging the work of video bloggers through its iTunes software. And Yahoo Inc. (Nasdaq:YHOO - news) is betting on the concept of "micropublishing" — letting the portal's users create content attractive to fellow users that will encourage people to hang around in Yahoo's virtual world. Another, Massachusetts-based BrightCove Networks Inc., is working on a way to deliver thousands of channels of video content online.

    That's great for the companies, say Revver's founders, but not so great for the content creators.

    "You are left to your own devices in a sea of Web sites that are more than happy to make money off your video and not pay you," Starr said.

    People wanting to use Revver upload their videos for free to the company's Web servers. Revver than attaches a static ad to the end of the video.

    It also attaches a "RevTag," which keeps track of how often the video is viewed no matter where it ends up. People can leave their video on the Revver site, post it on their own Web site, e-mail it to friends and even download it to a portable device.

    Revver says it will split the ad revenue evenly with content creators.

    As an example of the potential profit, Revver estimates that about 80 million people viewed the cartoon produced by JibJab Media of candidates George Bush and John Kerry singing a version of "This Land is Your Land" during last year's presidential election.

    If Revver had been able to sell advertising on that video at a rate of $8 per 1,000 viewings, it would have generated $640,000, half of which would have gone to the creators.

    But the real application of the technology could come as major media companies search for ways to take advantage of the free-flowing nature of the Internet while also protecting their copyrights.

    "This isn't just for consumer-created content," said Eric Garland, chief executive of Beverly Hills-based BigChampagne, which tracks activity on file-sharing networks.

    "Consumer companies will also start exploring these technologies. I don't think Hollywood will stop at the boundaries of the iTunes store."

    For now, Revver will try to sell its concept to advertisers who are looking for more targeted ways to reach consumers, especially on the Internet. The company will also build its inventory of amateur and semi-professional video while waiting for larger companies to become more comfortable with their technology.

    "We're hoping that the gap between amateur creativity and creativity funded by large, centralized media companies will probably continue to shrink," Clarke said.
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