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Monetization idea for Vimeo, YouTube and others

“Paid Videos“  is where online video should be going. You can only get so far on advertising. Revenue share models based on ads don’t quite work. Main problem is they don’t encourage or sponsor original content. Another problem is that people don’t want ads everywhere.

Call me a cherry-picker, but I’m surprised big players like Vimeo and YouTube haven’t ventured into the land of allowing uploaders to charge money for videos. They have already built the platforms and fine-tuned the interfaces to user’s liking. Now it’s time to make it interesting for people to contribute original content. The infrastructure is all there. It’s time to make video profitable for the little guys just like Apple’s iTunes store.

Idea is simple:

• I make good video and upload it
• Visitors pay to view it
• I get a cut of the earnings from the service provider

What could be simpler?

Right now Vimeo is trying to make money by getting me to pay to upload videos. This may work for a business that wants to embed a bunch of videos on their site and have Vimeo host it. But it doesn’t work if I want to make money off those videos. This encourages me to upload a small chunk of my new creation to Vimeo or YouTube and try them to buy a DVD or an iTunes movie or app.

It could be simpler.

I upload a short teaser trailer and show it for free on Vimeo. If you like it, you click and pay to view/download/rent/subscribe to the video. Easy. The trick to making money online is to let the end users pay for stuff. You cannot make money on free stuff. Nor can you expect advertisers to cover the bill. For the millions and billions of consumers our there there are only thousands or hundred of thousands of producers. If you focus on getting producers to pay to showcase their creations, you’re doing it wrong.

If monetization was offered, we would see new movies appearing on YouTube and Vimeo the same time they do on Netflix or Cable TV.

Video Formats

YouTube and Vimeo are not just sites. They are the media formats of the future. Forget MP4 or OGG or H.264 - they are just technical specifications. Nobody says “I watched that video in H.264 format”, they say “Have you seen this YouTube video?”. YouTube will deliver the video in whatever format the user can see with maximum quality, be it OGG, H.264 or whatever new standard may appear in the future. YouTube will also fight for distribution. They will make sure it can be played on the iPad, Android and the new Sony TV. You just have to make the movie. YouTube and Vimeo will also work hard to protect the movies against piracy instead of simply providing vehicles for it.

YouTube logo will soon be the thing you’ll be looking for when buying the new gadget. It will replace the “DVD” or “BlueRay” logos sooner thatn you think. Devices with that logo will be certified to play YouTube content by adhering to the API. There will be no licensing fees to be paid for using the logo because YouTube will be making the money by other means. This is no BetaCam or MiniDisk - excellent technologies of the day crippled by patenting and licensing.

Piracy

How many people know how to download a video from YouTube and later play it on the home entertainment system? Not many. From those who can, not many would be willing to go through trouble of doing so.

Consider this: If YouTube is one of the few de-facto video playback interfaces AND they guard against copyright infringements what are my chances of being able to upload a pirated video back to YouTube? Very close to zero.

If all your purchased data is stored online and managed in an official player, there’s no way for pirated stuff to get in there.

In another scenario, all pirates get together and create their own PiraTube. They invest billions to host and serve the content. They build custom apps that can be pushed to iPads and Androids. All the content is available for free. Then Apple rejects their app and the videos cannot be played on the shiny new device with the YouTube logo on it. Question: Why would pirates invest billions?

Monetization

This is the easy bit. Let the uploaders decide on the payment schemes. YouTube and Vimeo might have “premium” subscriptions that get access to select content without having to pay extra.

Media Storage

Buying a movie would add it to the customers set of items FOREVER. Say for $10 you get 10 playbacks for a lifetime, with extra $10 getting you another 10 playbacks. So if you buy a movie today, you can be sure that you can watch it next year again if you have the urge to do so. Players on devices like iPad and TV would report playbacks back to base.

ISP Access Fees

YouTube would partner with ISPs or give them rev share if they don’t count my traffic. Thus, by paying for the video I would be paying for my internet connection fees as well. Apple is already doing it for iTunes store.

Premium Content

I love TED talks. I wish I had access to all of them. I would pay a monthly subscription to view them all. I prefer to watch TED talks on YouTube because its less choppy and I have one less site to log into.

Free Content

Just like it happens with Free-to-air TV, a movie may be shown for free on a network like YouTube after it has been available for a fee for a while. Spiced with the right amounts of advertising and promotional content, it may be possible to occasionally make content available for free. It can also be bundled with a new release.

The future

For some, I may be stating the obvious. I suspect the big platforms like YouTube and Vimeo have plans for this. If they don’t, I would recommend they get a grip and get out of the Twitter business model of “Let’s build it very big and then somehow we will make money”.

Final Notes

These ideas are not new. Paid content is successfully used by many online businesses, including the book stores. There’s no reason to confine the video to a physical format to control piracy. Digital convenience is what people are willing to pay for.

If you run a video hosting platform and cannot summon the strength to pull something like this off, get in touch with me for some magic potion.

I want PayPal automation

I want PayPal to provide the world with an API to administer the account and perform operations on it. The only API features available are for processing payments from users.

The available APIs are not enough. I need to be able to work with the account using the API. When running a business on PayPal, you want to move the money quickly. You don’t want your thousands sitting in the PayPal account. I need to automate the account. I want the money to move automatically. If I had an API, I would be able to query the account balance daily and then trigger a withdrawal to a bank account if the amount is above some value.

Maybe API is not necessary, maybe PayPal could add this functionality into the system themselves. Something tells me that they are a bit reluctant to add this kind of stuff because an extra day the money is in their account is an extra day they earn interest on it.

When a bank processes a credit card, the money is deposited automatically. When PayPal processes a transaction, the money is stuck in the virtual limbo. We need automation, otherwise PayPal is not much different from regular banks.

New business model for Skype: Paid virtual calling

After discussing a few things Vika and I came up with a useful scenario where Skype could provide a whole new market of opportunity.

At present, Skype’s main source of income lies on the border between a virtual and physical worlds. Anything that crosses the boundary is usually charged for. This means if you want to call from your Skype client to a plain old phone, you’ll pay. If you want people to call regular numbers and reach you on skype you pay again. This is all understood and is pretty exhausted by now - not many new features are being added.

The new idea we came up with is to allow people to make money by specifying how much a call to a particular account costs. Skype could then keep a percentage just like iTunes store keeps a share of profits from App, Music and Movie sales.

It would work like this: I’ve got an account named “example.support”. Somewhere I specify that calls to this number cost “$10/minute”. On my website I put a note saying that I provide paid support for $10/minute via skype. If you need my support, you add “example.support” to your friends and make a call. Skype tells you that a call to this account is not free. If you have enough money in your account, your call is connected. I pick up, talk to you for 3 minutes. Your account is charged $30. My account is credited with $30.

In order for this to be attractive there needs to be a way to move money into the real world. Luckily for Skype, it’s sibling PayPal can do just that. I would “send” my $30 to my PayPal account and be charged the usual transfer fees. Everybody wins.

To make it more fun, video may be charged at a different rate. I can already imagine a zillion of useful customizable things to make it more into a real-world tool.

What do you think?