Web 2.0 rev share models: new democratic economy or pipe dream?

Latest trend in Web 2.0 start-ups: acquiring royalty-free user-generated content via promises of future remuneration.

UPDATE: "Google has agreed to turn over most advertising revenue generated by the latest video from Fritz Grobe and Stephen Voltz, creators of "The Diet Coke & Mentos Experiment," according to Peter Chane, a senior product manager for Google Video.

In exchange, Grobe and Voltz, who saw their original offering--which shows a version of Vegas' Bellagio Fountains made of 101 2-liter bottles of Diet Coke and 523 Mentos--catch fire with video-sharing fans last summer, have agreed to let Google host their latest video, "The Diet Coke & Mentos Experiment II."

ALSO SEE: "Showing on Google Video, Not YouTube (yet)"

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In “Revver: advertiser-driven videos?” I discuss the latest trend in Web 2.0 start-ups: acquiring royalty-free user-generated content via promises of future remuneration.

Revver solicits video uploads from amateurs with the following pitch:

Creators: Share your videos and earn money.

We're here to help you earn money from your videos. Posting your videos is easy, free, and will get your work in front of a big audience…every video you upload is tagged so that you can earn money when people watch.

Before you post your video anywhere online, get a RevTag. Unlike most video sites that take videos and give nothing back to creators, we created Revver from the beginning to support videomakers. When you upload a video, we'll attach a RevTag -- a single frame ad at the end of the video. Every time someone clicks on the ad, you'll earn money.

Revver attracts amateur content uploads due to its seemingly pro-creator stance.

The overwhelming majority of video enthusiasts uploading content to Revver with expectations of fortune, however, will undoubtedly be disappointed.

The advertiser-centric reality of Revver’s business model, coupled with its Pay Per Ad Click pricing model, yields little “action” for the typical amateur video fare.

A June 12 Associated Press report puts forth the paltry economic benefits Revver participation provided a NYU film school alum:

'Gotcha!' is a one-minute vampire movie that has gotten more than 1,600 hits since its 23-year-old director posted it on Revver at the beginning of the month. The mini-flick is one of five that Ben Leavitt, who attended NYU's film school, has uploaded using Revver's system that attaches ads to videos and then splits the advertising revenue 50/50 with creators.

Leavitt, who's made about $30 so far, said he was drawn to Revver because of the potential to earn some cash from his self-described 'ridiculous work.'

‘For doing nothing, that's pretty good actually. I would've done it if there wasn't money involved, but the money is certainly appealing, he said.’

Revver, not surprisingly, touts the economic benefits reaped by Fritz Grobe and Stephen Voltz, the not-quite-amateur creators of the video clip viral sensation: “The Extreme Diet Coke & Mentos Experiments.”

The video clip has reportedly garnered over 4 million views.

In “Revver: advertiser-driven videos?” I discuss the well thought out development campaign which resulted in the seemingly spontaneous viral hit:

Grobe and Voltz are experienced performers, they appear in the “Early Evening Show” at the Oddfellow Theater in Buckfield, Maine. The owner of the theater, Mike Miclon, filmed the video clip.

The video clip is the culmination of several months of planning and collaboration… Grobe and Vlotz have made appearances on ‘Late Night With David Letterman’ and ‘The Today Show.’

The massive exposure and viral success of their video clip has reportedly yielded approximately $25,000 in ad revenue share from Revver for Grobe and Vlotz.

The Grobe and Vlotz success story is the product of a savvy, calculated plan to create a profitable “hit,” rather than an unexpected brush with fame, and appears to be case-specific.

Revver is very advertiser-friendly, and suggests that video creators be the same. According to Revver’s FAQ:

How much money can a video earn? It's hard to predict how popular your video will be ahead of time, but popularity is what earns you money. The more times your video is watched and a viewer clicks on the ad, the more money you will make…

How advertiser-friendly your content is will definitely impact on how much you make. If you create an extremely popular video that's relevant to a particular type of product, advertisers will likely bid more to associate with it, and you'll make more money.

The Grobe and Vlotz video is, in fact, “an extremely popular video that's relevant to a particular type of product.” The video is actually named after two products and the two products are the "stars”; Mentos has subscribed to full sponsorship of the video clip.

The Grobe and Voltz success achieved at Revver will be difficult to replicate.

Additionally, the financial remuneration, iteself, does not seem extraordinary; A $25,000 payout for 4 million video views represents an average compensation of about half a cent per video view.

At yesterday’s Building Blocks appearance, however, Oliver Luckett, a Revver co-founder and senior-vice president of network development, reported monetization rates of a more attractive nature:

Revver currently monetizes videos at 75 cents to $1 per view (ads are at the end of the video, so the entire video has to be watched), delivering an effective CPM of $22.50 to $40, with a click through of between 3 and 4 percent.

Revver says it provides “the best of both worlds”: “Revver benefits creators, advertisers and viewers by enabling content to be free and accessible while still rewarding creators-- it's the best of both worlds.”

It is still unclear, however, to what extent either world will be monetized.

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