In the past 12-18 months, niche video networks or micro video networks as some call them, such as For Your Imagination and Next New Networks have ramped up their offerings for small content producers trying to gain their business.
At the same time, video platforms like Babelgum and Brightcove are also competing for these same content owners and the differences between a network and a platform continue to confuse people.
These types of aggregators and networks offer content creators a promising new vehicle for syndicating and monetizing content that would be hard to do on their own, but many of those content owners keep asking what exactly the niche video networks offer and how the business relationship works?
The first question I am always asked is- are these networks looking to license content, or are they primarily interested in acquiring and owning content? From those I spoke with, the consensus was that most networks look for a non-exclusive licensing type agreement that is based upon an advertising rev share, which is what most of the video sharing networks offer today.
Some destination type sites may ask for an exclusive license for a fee upfront with no rev share, but those are less common. Another model might be the opportunity for a content owner to produce exclusive new content for a destination type site which works as a work for hire type of relationship.
Of course, content owners also want to know how is ad revenue generated and shared with content owners?
Generally, rev share is some kind of a split of net revenues, maybe as much as 50/50 for on network and some three way split if it is on a publisher network. Net revenue is calculated by taking gross revenue minus any network costs for your content and the ad campaign, such as operations, management and hosting. Those costs usually amount to about 25% of the gross, with the remaining balance split with the content creator.
While it sounds easy enough, the problem is that there is no “average” split of net revenues. The only true way for a content owner to know how much their split would be is to get an actual quote from the network.
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Photo by Various.
MT on September 23rd, 2008 at 10:21 am
Pretty interesting article Dude!
Ed Britt on September 23rd, 2008 at 10:59 am
That’s the same problem affiliate marketers face when they begin a relationship with a new vendor and they do not have tracking software installed. I’ve had good vendors that paid every dime and I’ve seen bad vendors that won;t pay unless you complain.
Castle Steps on September 24th, 2008 at 7:05 am
I was browsing this site while I was working and I came across this article which is very interesting. As a foreigner living in Prague, Czech Republic, I rely on many of these sites for TV (I hate watching TV dubbed in Czech). I believe that this will be the future of television, especially if more of these sites start using the revenue sharing, content licensing approach that’s mentioned in the article.