OVW is hearing a few things in the rumor mill worth sharing. Revver, the video sharing site that pays out for uploading videos, is running out of steam and may not make it through the end of the month.
Again, to reiterate, this is the rumor mill, and we know how these things go. But OVW has heard the same story from two separate sources, both affiliated with the company.
The second half of the Revver rumor is that Live Universe is interested in stepping in and saving them from their impending demise. This rumor first appeared late last week on Contentinople. Live Universe runs the lesser known LiveVideo.com, and was founded by MySpace founder Brad Greenspan.
With Revver and everyone south of YouTube showing no or negative growth, this isn’t surprising. How many of Revver’s problems (and Joost’s) were caused by the outsized expectations of their VC funders? Money doesn’t buy wisdom or even luck these days.
Not surprising in the least, especially considering their business model. You shouldn’t be paying for content that you can’t recoup, no matter how popular a clip becomes.
However, I disagree that Revver and Joost share the same problem. Revver isn’t making any money. Joost hasn’t delivered on their high expectations and promises yet.
In general, there are lots of cool, fun, hip video sites and technologies out there. But just because its cool doesn’t make it a good business model.
[...] Rumor Mill: Revver All Revved Out. Live Universe is interested in stepping in and saving them from their impending demise. This rumor first appeared late last week on Contentinople. Live Universe runs the lesser known LiveVideo.com, and was founded by MySpace founder Brad Greenspan. [...]
Corey: Revver isn’t “paying for content” — they’re directly sharing ad revenue, and the more popular a clip is, the more it should generate revenue to share. Maybe the sharing percentages are too high for their portion to cover their costs, and maybe they should pursue more ways to monetize their assets, but “paying for content” makes it sound like video creators get paid regardless of ad performance, and that’s not how it works.
Tomato, tomato. Yes, those are the correct details on how Revver’s business model works. No disagreement there. That is their unique value prop – the people who give them the content get paid if / when it takes off.
But I highly doubt that end users care where the money comes from. They get a check from Revver.
So what’s your point? That the business model that people think they have, which is not really their business model, will make them fail? There’s no logic in that at all.
Guess we’ll have to agree to disagree. If that’s not their business model, please explain what it to me. And yes, they failed. You probably saw that they put themselves on the block for half a mil, plus a mil in debt. Thats not success at all.
Until the value of the targeting technologies that are out there is proven, and there is technology for vetting and ranking the quality and ad-friendliness of user generated content, then there is plenty of content that should and will remain unmonetized. And THAT is a bad business model. If you are paying more for content than you are generating from ad revenue (or other revenue), then you’ve got a short lifespan. COGS.
The object of being in business is to make money. If you aren’t making money, you have a bad business model.
Please see Shelly Palmer’s blog for an excellent analysis.
http://www.shellypalmermedia.com/2008/02/08/revvers-financial-woes-business-vs-a-business-model/
“If you are paying more for content than you are generating from ad revenue…”
Good grief… We can agree to disagree, sure, but shouldn’t it be based on demonstrable facts? REVVER IS NOT PAYING FOR CONTENT. That’s the fact that your comments keep ignoring, so either you’re choosing to ignore it or you just don’t get it. Your comment about people *thinking* that Revver pays for content is irrelevant — who cares what misinformed ideas people have? Some people insist man has never been on the Moon.
Look at it this way: If people think McDonald’s is in the business of selling cars, their crazy idea doesn’t mean that McDonald’s will go out of business because a car can’t fit through the drive-thru window. It just means those people are wrong. That won’t affect McDonald’s at all. Likewise, people *thinking* that Revver “pays for content” won’t affect Revver because that’s not what Revver is actually doing.
If you still don’t get it, just go upload a video to Revver. See how fast they pay you for it — but, uh, don’t hold your breath, because they won’t. Not a penny. Your video can just sit there and sit there, without any earnings at all. That might help you get past the “paying for content” notion. (Don’t get confused if you do get money for it, though — that money may pass through Revver but it’s not being paid by Revver, it’s being paid by the advertiser.)
As for Shelly Palmer’s blog entry, it’s only an “excellent analysis” if you don’t understand Revver. There are some major flaws with it. As just one example: Where is the mention of the Revver API? Oh yeah, he doesn’t mention it. Why not? Good or bad, the API was an early — even core — aspect of Revver’s approach, which is why that appeared (and has been revised) long before the YouTube-ish features that are now on Revver.com.
Here’s another example of the failed logic (or utter misunderstanding) of that blog entry: “Revver did not have any defensible technology.” I don’t speak for Revver and can’t claim to know their private motivations, but I can say this: With the API, they allowed — even encouraged! — people to build sites that would “compete” with Revver.com, because the backend hosting (and ad delivery) would still be handled by Revver. So what did Revver bring to the table, if not technology? Advertisers, and not just “on the Web” advertisers, but attached-to-the-video advertisers, so even if a video was downloaded as a Quicktime file and traded on a P2P network, it would still be earning money for Revver and the creator. That functionality could be replicated by a competitor, so again it’s not about the technology, it’s about the relationship with advertisers. Could the majority of people who have earned ad revenue via Revver have done as well without having Revver as their ad broker? Doubtful at best.
Anyway, there are lots of reasons a business can go under, and having a bad business model is just one of them. Look at all the restaurants that fail — is that because serving people food is a bad business model? Obviously not; management problems, however, are common in restaurant failures. People now seem eager to claim “bad business model” when an online business fails, probably due to the abundance of moronic pre-dot-bomb business models — but just because it’s a knee-jerk rallying cry now doesn’t mean it’s accurate.
OK – They don’t pay for content – they pay users for ad revenue they receive for the ads on that content. It is semantics.
Sure it’s good for producers but your question points right at the problem:
“Could the majority of people who have earned ad revenue via Revver have done as well without having Revver as their ad broker? Doubtful at best.”
Why not? Because the current model doesn’t work. They’re paying producers too much, which is the same as saying they’re not earning enough revenue to make their business successful. If Revver and its investors thought that this model would eventually make them independently successful they wouldn’t be trying to sell.
This doesn’t necessarily mean the end of Revver. Perhaps a larger company will buy them with the scale will lower their content delivery costs and the relationships with advertisers to improve their margins.
But for a startup – paying out at the rate that they are in an attempt to gain more content and better producers has the result of costing them more as their content improves without having the resources to cover those costs. And that is a bad business model.
Ben, what does the phrase “business model” mean to you? It looks like you’re saying that any business that has higher expenses than income has a bad *model* of business, which is absurd (again, going back to the restaurant…). “But… paying out at the rate they are… is a bad business model.” Changing a percentage is not changing a business model. That goes back to my restaurant example, where the business *model* may be fine but the individual management choices for how to implement that model may not be fine and could lead to failure of the business. In this case, there’s not enough data to know whether the business *model* is viable, because there aren’t enough implementation examples to consider.
Sure, just because a business loses money doesn’t mean that it’s a result of the model. But in this case, regardless of what percentage of ad revenues they pay, the model doesn’t work.
[...] doesn’t love being right? Two weeks ago, we wrote that online video sharing platform Revver was looking at a fairly bleak and short [...]
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