Upload Video, Download Cash on YouTube?

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Czerniak believes that paying creators is the only way to encourage more people to create quality content that people want to watch—instead of simply posting home videos more likely to be viewed by family and friends than the general public. Generating more of such content, he says, is the key to attracting big-money advertisers. "If you want to monetize your audience well, you need to attract the major brands and you got to get your audience hooked on what you got," says Czerniak.

Revver has built its entire model around paying contributors. Since its June, 2005 launch, the site has attached pay-per-click ads to the end of uploaded videos. It marks the amount of times ads appended to each video are clicked and then splits the resulting sales with the creator, says CEO Steven Starr. "We have hundreds of regular creators, some are making as much as $10,000 in a month, some make $1,000 a week, some make lunch money," explains Starr.

Possible Problems

As alluring as a revenue-sharing program may be, it wouldn't necessarily be easy or cheap to set up at YouTube. Revver employees screen videos to eliminate sexually explicit or copyrighted material. The process, which is more time-consuming than YouTube's automated system that quickly posts the video, is necessary to ensure that legitimate copyright owners are not essentially robbed by fraudulent video producers, says Starr. As the number of videos on the site has increased over time, Revver has hired more screeners and also plans to implement new technologies that can recognize and block videos with copyrighted material by their audio track, as needed to speed up the process. Starr declined to give an exact number of videos on Revver, but says it is in the hundreds of thousands. YouTube says it streams more than 100 million videos a day (see BusinessWeek.com, 7/14/06, "YouTube: 100 Million Videos a Day").

A financial stake in the success of a video could also create greater incentive to rip off copyrighted material. Some form of human review will be necessary in addition to audio fingerprinting, Bernoff says. "Otherwise, I could take the video that I just snagged off of a television network and start to get paid for it, and then [the network] could say, fine, now you owe us money," says Bernoff.

The potential for such legal claims, coupled with the difficulty of screening so many videos, could make paying creators more trouble than its worth, says Thomas McInerney, a co-founder and former CEO of video site Guba. "I think this is somewhat of a me-too move for YouTube, and I don't think they necessarily need to do it," says McInerney. After all, he adds, they don't need to attract additional traffic—they are one of the most visited sites on the Web as it is. And they don't have a problem attracting content. "People upload content to YouTube because there is an ego in broadcasting yourself," McInerney says. "People like the attention."

But when there's money on the line, they will probably like it a whole lot more.

Holahan is a writer for BusinessWeek.com in New York .