Why YouTube Wins and Revver Loses

When I heard the announcement that Revver had received a first round of funding, I took a look at their site. I felt the idea was brilliant. Embed a simple static ad at the end of every video clip and let it be free. Let people grab it, embed it in other sites. As long as that ad stayed in the package, that video would generate revenue for the author. We had been thinking about similar ideas at Cozmo, but much more focused on video ads downloaded to devices. The static ad was so much simpler and easier to implement. My initial thought was that Revver was going to take off. But it didn’t. However, YouTube, which provides no such financial reward, did take off, and in spectacular fashion.

Why is this? Revver’s model seemed like the winner; financial reward for producing quality video and driving as much traffic as possible to it. Cash can motivate like few other things. But it didn’t work. Why?

Now, Revver made a few mistakes. The requirement to download a client to upload video is a biggie, but it would seem that the potential to make money would be a carrot that anyone publishing videos would go through some hoops to eat. But this is not what’s happening. What is happening is that YouTube is exploding and Revver is wallowing. Revver gets plenty of press mentions, but look at their traffic compared to YouTube. More importantly, look at their trajectory. That’s not a business model that’s working.

What is happening is that most people that upload videos (and I would argue blog and podcast) don’t give a shit about making money from their efforts (at least not directly). I think they believe (and they’re typically right), that the money would be so insignificant that it isn’t even a factor in their decision to publish or not. They might try to create a brand around themselves and leverage that into a contract with a major TV/movie publisher, but make money off the video directly…. naaaah. Who cares, it’s pennies anyway. But the ability to upload my video quickly and see it immediately, that’s what I want. That was one of YouTube’s most brilliant innovations; the (almost) instant gratification of the upload. Add in the embed function, a little community and a little copyrighted content and BANG!, you’ve got MySpace growth. But the community was primarily interested in ego and reputation, not money.

This is why Revver is doomed to obscurity. If the primary differentiator over YouTube is compensation for the author, there is no value in their differentiator. YouTube is going to wipe the floor with them. What people want and get from uploading videos to YouTube is something far more valuable; the ego trip of seeing your video sitting next to a clip of the Daily Show. It’s the same thing that drives MySpace. Look around, if the only thing that differentiates your service from your competitor is that with your service your customer gets paid for his/her efforts, change your business model. The hive doesn’t participate because they’re getting paid, the hive participates because it likes to hear the buzz of the crowd.

UPDATE: Just wrote a new article on Revver and YouTube (10/20/06)

Comments

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[Kali Karagias]

Being a filmmaker, I understand the whole concept of exposure on You Tube but whenever I want to network people to my videos, I send them a link to Revver. In less than a year, I've made 100 bucks...not bad for doing nothing.

[Extremeanchor.com]

Revver is a Bunch of SNAKES and RATS they SUCK!

[Tommy Paulkson]

Look here, you will enjoy these movies. This is revver at it's worst!

http://revver.com/user/Mike%20Etoll/?brwsr_page=0

[Klim]

Exposure is definitely a big factor here. You upload your video to Revver... and then what? You'll need a mighty huge network to profit from your stuff.

But probably the biggest problem is lack of commenting... what site can go without out that feature these days? As Pete says, it's just not social. It's a community that sparks good word-of-mouth.

[Pete Cashmore]

Largely true, although Revver sucks in other ways - no commenting, no groups, no social features at all, really. I think it's true that rev share isn't always the best motivator, but there are other reasons why Revver isn't as big as YouTube.

[Easton Ellsworth]

Amen. When I think of using one or the other, my mind instantly shrinks from Revver because of the required client download, and in fact the idea of trying to monetize my videos seems insignificant when compared to the idea of my videos being seen and recognized by PEOPLE.

It doesn't seem to make sense at first, but when you stop to think about it, it's not money that's the number one motivator for users here - it's exposure.