The popularity of online videos has increased significantly in recent years. YouTube and other online video sharing websites have launched normal people (as well as a dog or two) into stardom and have entertained us for hours. Even though they have facilitated this entertainment through their complex and efficient searches it is the common people, those who post videos that keep us coming back for more.
A recent NYT article describes Blinkx’s, a video sharing internet company, new business strategy. In order to compete with You Tube, Blinkx will let video posters (that’s right: you and me) make money from advertisements. The company hopes that this will broaden their video and advertisement base. The more video’s they have in their archives, the more popular they become, the greater the number of advertisers that will place their ads with them. Right? In theory.
Blinkx is not alone. Actually Blinkx is in a very crowded place.
The number of video search companies is large and they are all trying to make a profit. With all of them competing for videos giving up some of their revenue just adds to the risks of being a startup company.
The success of their strategy depends initially on the belief that posters can make money from advertisement. But believing only goes so far.
In order to make profit video publishers will have to agree to run ads attached to their videos. Every time a viewer clicks on the ads the poster will receive a percentage of the revenue.
At first I thought this could work, after all even the smallest amount of money is better than none. But then I remembered; it’s already been done.
Revver.com gives 50% of their ad revenues to those who post the video. Actually it’s less. Because Revver gives 20% to those who share the video with others and then what is left is divided 50-50 between the poster and the company. This 20-40-40 system worked for them, and it might have even been the leading force behind the company’s growth. But now it’s done and taken.
Is there room for one more? Probably, but Blinkx’s strategy needs more than this element to fill it. The company has tried to attract users with its search capabilities but this new strategy makes me think that the fancy search hasn’t been enough.
According to the founder of Blinkx, Mr. Chandratillake, with this new system “the people who are powering the video revolution are the ones who get the rewards.” But I doubt the rewards will be high enough or innovative enough to power the company’s new business strategy.