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Gold Rush On in Viral Video

Jun 26, 2006  •  Post A Comment

Revver, an online video service that shares ad revenue with would-be Internet auteurs, plans to emerge from its nine-month beta test early next month, and with that official launch will come a new user interface and new features for advertisers and creators who use the service.

The company is taking the wraps off its business at just the right time. Revver is part of the rush by companies to give viral videographers and online TV craftsmen ways to make money with their creations. A successful business model could fuel a second explosion of user-generated video and more professionally shaped work, creating a cottage industry of content creators whose clips will challenge the content of traditional TV networks.

Hoping to capitalize on the zeitgeist of online television, viral video and user-generated content, new firms such as Revver and ViTrue, along with existing players such as Brightcove and Maven Networks, are purveying tools for content providers, advertisers and consumers to participate in this new video era in a more structured fashion. They offer the framework to build a business around these new online phenomena.

For instance, Revver offers software that inserts an ad at the end of a video, enabling the content creator to split ad dollars 50/50 with Revver. ViTrue provides the technological tools for advertisers that allow users to create ads. Brightcove plans to extend its role as a technological platform for online TV to also act as a broker between online TV networks and big-name advertisers. What these firms share philosophically is the desire to link the little guy with bigger advertisers.

While Revver doesn’t officially launch its service until July, it has been in beta tests for nearly a year and has already made a name for itself as the technology behind “The Extreme Diet Coke and Mentos Experiment,” a three-minute viral video that became an online sensation earlier this month. Because the content creators “Revverized” the video, as of early last week they had earned more $20,000 in ad dollars, representing half of the total take the video had generated from ads, including one for “Dave Chappelle’s Block Party” DVD release. The video has been viewed more than 3 million times.

Revver’s software lets video creators track their videos across the Internet, whether on MySpace, blogs, social networking sites, via e-mail or on Revver, said Steven Starr, Revver’s founder and CEO. “Revver’s [software] allows for dynamic ad insertion, so where the video is being viewed we are serving up an ad after the video is seen,” he said.

Ads Without the Selling

The benefit for the content creators, who in many cases are average Joes and Jills shooting video in their garage, is that Revver sells the ads. Those folks aren’t likely to get past the door if they go knocking at a Procter & Gamble. So Revver does the knocking, striking deals with advertisers to mix and match them with content creators. So far Revver has made deals with movie studios, computer companies, record labels and other advertisers. Revver also works directly with advertisers and through third-party “ad networks” that strike umbrella deals with advertisers to buy online ads. For instance, Revver has partnered with Warner Home Video to create an online video contest for the recent DVD release of “Kiss Kiss, Bang Bang.”

Brightcove, whose technology supports Internet TV, plans this summer to roll out the first phase of its own ad network, which will connect its small and large online video programmers with brand-name advertisers.

“We are hoping to play an active role in facilitating the brokering of brand marketers with these programmers because [some] don’t have the scale to be talking to major brands,” said Jeremy Allaire, CEO of Brightcove. Already, Brightcove has had early success as an ad agent, having connected Sony BMG’s online music site, powered by Brightcove, with advertisers Hewlett-Packard and DreamWorks.

Maven Networks, an online video publishing system, added capabilities this spring to link its content partners, such as Sony Pictures and 20th Century Fox, with existing online ad networks, such as Lightning Cast and DoubleClick.

The new entrants will face competition from existing online ad networks with a few years under their belts. For instance, Broadband Enterprises has been operating for more than two years and matches more than 500 Web sites, such as Lycos and iFilm, with more than 100 brand-name advertisers.

But media agencies say they’re interested in the business that new middlemen such as Revver and Brightcove and more established players such as Broadband Enterprises bring to the table. The newer folks are even more precision-tuned on monetizing the long tail of content.

“I don’t care if it’s coming from a network or from the Origami Network,” said T.S. Kelly, VP and director of research and insight for Media Contacts, the interactive arm of media agency MPG. “I don’t want to show live human sacrifices brought to you by Kraft. But I don’t care where the content is if I can target my audience and if there is accountability behind it.”

Working directly with advertisers is ViTrue, founded in May to offer tools that let advertisers create forums for user-generated ads. Starting this week, ViTrue will kick off a partnership with Moe’s Southwest Grill, a 300-restaurant burrito chain, to launch an online community that allows Moe’s consumers to create and upload their own video ads. The community will vote on the ads, and the winner receives free burritos for life. In addition, Moe’s will consider the best spots for its TV campaign, said Reggie Bradford, founder and CEO of ViTrue.

Cost-Effective Model

That places ViTrue in the same camp thematically with a Revver or Brightcove, because ViTrue is aiming to provide a cost-effective infrastructure to link brands with millions of consumers. The ViTrue model also gives the brand more control, letting the genie out only to an appropriate level when it comes to viral marketing. “This is a place where consumers can come and start to participate in developing advertising campaigns for brands they are passionate about,” Mr. Bradford said. “It’s not just a Web site where you share videos of guys lighting farts. There is a higher level of engagement here.”

Indeed, viral video may demarcate along higher-quality, more finely crafted video and the more amateur creations.

Stephen Voltz, one of the creators of the Diet Coke-and-Mentos fountains, said he and his partner opted for Revver because of the content protection and the chance to get paid. They also discouraged viral video submitters from posting the video on Google or YouTube. They spent eight months crafting their carbonated concoction.

“Our example has sort of proved you don’t need to go to YouTube and Google,” he said. “Every time it’s viewed on YouTube, we don’t get money.”