Money for Content and your Clicks for Free

Web authors have long dreamed of making money from nothing, or in this case, the content they generate.  It’s rare to make a living from your articles; face it, most stuff isn’t very good.  Popular websites, like YouTube, MySpace, Wikipedia and eHow.com, have so far relied on freely-donated content generated by their users.  But as these sites gain in popularity and value, will users continue to donate their content for free?  How much did contributors gain from YouTube’s $1.65 BILLION purchase from Google?

In the past couple years, niche website owners and bloggers have taken advantage of Google’s AdSense program, which places ads on their website based on the text articles displayed, and then pays the website owner a split of the advertising revenues.  But in reality, most websites do not garner enough traffic to generate substantial revenues.  And video websites have had no such arrangement, except for www.Revver.com, which has not gained the traction of YouTube.

The tide may be changing.  YouTube’s co-founder announced Saturday (at the World Economic Forum in Davos, no less) that YouTube would soon share revenue with the contributors of the 70 million videos viewed daily.  This makes sense, given Google owns YouTube, that they would figure out a way to track both impressions, clicks and ads spread across thousands of videos contributed by thousands of amateur contributors. 

It’ll be interesting to see how the details shake out.  If I “copy” a segment of a TV show, and post it on YouTube, can I earn fees during the period before they take it down for copyright violation?  If I make a video and set it to music of an established artist, do I have to share my revenue with the artist?  If my kid uploads a funny video of himself and his buddies, does he have to pay income taxes on that revenue?

I predict that YouTube will open a real can of worms, once real money gets passed back to contributors — since tv, movie and record companies will definitely try to get a piece of that cashflow!

More interesting to me is Demand Media, a start-up Internet media company founded by Richard Rosenblatt (former CEO of MySpace/Intermix) and funded with $220m by VC’s.  Richard spoke at a panel discussion “The Changing Face of the Media Business” at a USC-sponsored LA County Tech Week event last week.

Richard revealed that Demand Media plans to announce revenue-sharing arrangements for content producers of their niche websites.  Given that Demand Media operates quietly, and very little is revealed publicly, this was quite a revelation.  Richard is a super-smart guy, and he was a sharp panelist.  Demand’s content strategy seems to be to start a large number of niche-oriented websites (say, for bird watchers), try out a number of revenue models (subscription, advertising, e-commerce), and then see which ones stick and gain user traction.

He announced that contributors would be paid on a yet-to-be determined formula based on page views, keywords and “other factors”.  Usually, advertising networks like Google AdSense will not reveal how much revenue a given article/page on a website generates, but if you’re large enough, says Richard, you can get that data.  Well, $220m in start-up funding should get Google’s attention.

I think the effect of these moves will be to enable better contributors to bubble up to the top, and soon there will be a number of major websites which will facilitate that movement.  Conceivably, good “amateur” content producers will give the “pros” a run for their money.

The rest of us will always be free to generate our own content, we just (still…) won’t get paid for it!

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One Response to Money for Content and your Clicks for Free

  1. Jonathan says:

    This link might be of interest: http://www.downloadsquad.com/2007/01/18/the-tipping-point-for-online-games, notably comment number 10 from the author of the game profiled in the posting.

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