Startups that are trying to create marketplaces that monetize video content. (But what does it take to bring people to the market?)

I have been researching startups that offer opportunities for original video content creators to monetize their work, oftentimes by creating marketplaces and platforms. Here are some of the more interesting companies that I have discovered. (Please feel free to add others in the comments section.)

Note: I am staying away from companies that only work in the music monetization and companies that are essentially video advertising solutions.

1. PlaceVine (Acquired by social video syndicator Alphabird in 2011)

About: “PlaceVine is a service that bring passionate content producers together with marketers and their agencies to create socially engaging branded video experiences. Today, the basic Placevine service enables producers to showcase their concepts and content for brands, and enables marketers to provide talented producers with brand integration opportunities.”

2. Koldcast.tv

About: “KoldCast TV, a division of KoldCast Entertainment Media, LLC, is an international television network which distributes programming to entertainment consumers around the world via the KoldCast TV Network site, found at www.koldcast.tv, via set-top boxes, connected/smart TV’s and mobile devices, and via unique relationships with broadcast and cable TV networks and other television distribution venues around the world. Our programming is largely created by independent television producers and filmmakers from the United States and countries across the globe. The phenomenal growth of independent programming allows KoldCast to be highly-selective in its programming choices. Unlike online video distribution sites like YouTube and those that have followed them, KoldCast specializes exclusively in professionally-produced programming. Our programming slate does not combine user-created videos of cats and dogs playing the piano or riding a lawn mower.”

3. Blur Group

About: “Blur Group has built and operates the world’s largest Creative Services Exchange™. With 14,075 creatives and exchange staff, a unique business model and advanced technology, it radically alters the marketing services space. CMOs, marketing directors, VPs, creative heads and innovation leaders buy the best, most cost-effective creative services from expert providers around the world. The biggest global brands, the coolest startups and all points in between choose this transparent approach for the most cost-effective, real time and relevant design services, marketing campaigns, content programs, original artwork and innovation partnerships.”

4. Talenthouse

About: “Talenthouse provides life-changing opportunities for the creative community. It’s a place to participate in projects with leading artists and brands, gain recognition and virally grow your audience. Talenthouse embraces artists at every level of their career, as well as all supporters of the arts. Attracted by the potential for discovering, collaborating with and mentoring emerging talent, many global brands and acclaimed industry icons are involved with Talenthouse by hosting Creative Invites. Brands choose Talenthouse to engage in a dialogue with their audience in a targeted, relevant and credible context. Talenthouse currently focuses on film, fashion, music, art / design, and photography.”

5. Videolla.com

About: “You simply upload your video to Videolla and set price for it or insert ads into the video. Its simple and free. You will not need any coding skills. Just register, upload your videos and pick if you want to sell them or place ads.”

6. Bozza (South African)

About: “Most individuals in Africa engage with digital communication, information and entertainment through their mobile phones. Content drives the uptake of technology; yet despite the global increase and focus on the value of content, there continues to be a lack of locally generated, contextually relevant content for the African market. Focused on local made-for-mobile content, the Bozza application offers artists, filmmakers and entrepreneurs a mobile platform through which to distribute their content. By doing so these SMMEs earn revenue and users get free access to relevant, premium content (music, written word and videos) that entertains, educates, informs or all of the above.”

7. Poptent

About: “Poptent is a vibrant community of filmmakers (and actors, comedians, grips, animators and more!) who are connecting to each other and to companies that want to pay them for their talents. Through our passions for advertising and commercials, we are exploring a new way of creating branded messages for the Internet age. Poptent members can show off their work, build a portfolio, collaborate with other creators, leverage our deep set of features, and best of all make money doing what they love. Poptent brands are seeking new ways to reach their consumers and create new audiences. They are finding exciting possibilities that save them both money and time while staying just ahead of the curve of competition. They are, in a word, trendsetters.”

How does YouTube run its numbers?

Update: Problem solved…Rod made a bunch of other videos that he has since taken down from YouTube. Those videos, which are no longer available, remain in the count of total views.

As I was working on my market research, I took a look at my friend/uber-talented director Rod Blackhurst’s YouTube channel. I noticed that his total number of overall “views” on his page did not correspond to the total number of views from each of his eight videos combined. Why is this so? What am I missing here? What is YouTube not telling us about how they tabulate views? This should be simple mathematics.

Rod's total YouTube views at the top of his page.

Now add up the views from all eight of Rod's videos. Do they add up to 617,000? Nope!

Update: Texas Tribune CEO Evan Smith’s response to my recent post

My original post about The Texas Tribune is here.

UPDATE 2: Click HERE for an interesting white paper on non-profit/commercial news partnerships from the UC Berkeley Graduate School of Journalism.

UPDATE 1: Evan Smith, CEO of The Texas Tribune just returned my call. And he was angry. At the start of the call, he cited me as having factual errors in my reporting. (In reality, there was only one. Jay Root came to the Tribune directly from the AP, not the Fort Worth Star-Telegram, where he worked for many years, as I wrote.) As promised, I will give Smith his shot at a fair response right here:

Re: My accusation about a failure to disclose Texas A&M’s contributions to his organization in the recent New York Times piece, he said, “”I think we should have disclosed that A&M is an institutional donor to the Tribune.” He called the incident “a rare lapse.”

Smith then described a December 2010 story in the Times in which a Texas Tribune reporter, Emily Ramshaw, critiqued a Tribune donor, Christus Healthcare.

He said, “I wouldn’t be in the non-profit sector if I was in it for the money. I had a higher salary at Texas Monthly. The reason I raise the money has nothing to do with me, but everything to do with the the mission of this organization.”

Smith said that $315,000 is his actual salary, even though it may seem higher on financial reports, because of deferred payments.

He critiqued my notion that I should be watching over a watchdog by saying, “You’re allowed to have a point of view, but it ought to be based on something. Be a watchdog on the watchdogs. If that’s your place, God Bless.” By my own admission,  I have not done a full review of all of The Tribune’s articles to gauge whether or not they treat their donors preferentially. I simply found one recent incident and wrote about it.

However, I feel that someone must examine non-profit news organizations with the same scrutiny that for-profit news organizations are critiqued. Smith replied, “You haven’t done the work required to rip as a new one.” Admittedly, I worked on this post for a few hours, and I was unpaid for my work. Smith also said,  “There are plenty of places that go into strong stances on issues. We give you the tools to think about things yourself.”

He insisted, referring to donations, that, “None of this ever influences the work that we do. I pointed this out to Howard Kurtz in 2009: The money we got from advertisers at the for-profit publications where I previously worked is greater then what we get at The Tribune.”

Other Smith quotes from our conversation:

1. “If you provide us with the resources to do the work we do, we will get our work in as many places as possible. We will allow the individual corporate and foundations to support us, so that we can make that content available for free.”

2. “We want to help educate as many Texans as possible about the things that happen in the world.”

3. “The goal here is to provide as many news organizations as possible with great content.”

4. “The reason that you know about my salary is because we publish it. We overdisclose. We are not obligated to publish any of this stuff.” I disagree. As a non-profit, they must disclose the salaries of their five highest paid employees.

5. “We ask transparency of others so we do it ourselves.”

6. “My salary gives me a disincentive to ruffle feathers. We have written negatively about our donors. There are countless examples where they will yell at us.

7. “”It is enormously hard work. We take it very seriously. Most of us worked for for-profit media companies, but we believe the mission of The Tribune is more important.”

The Texas Tribune’s non-profit business model is harming for-profit journalism in Texas and Texas A&M’s corporate sponsorship of The Tribune should have been disclosed in a recent New York Times piece

Update: Click HERE for Texas Tribune CEO Evan Smith’s response (and additional notes) regarding the post below.

My updated conclusion: Led by the success of the non-profit news model represented by The Texas Tribune, the decline of the for-profit news ecosystem is being accelerated by competition from the non-profit world. The role of a non-profit should be to help increase the quality of journalism, but not at the expense of for-profit organizations.

In journalism circles, The Texas Tribune is generally held in high regard for the quality of its content and its ability to lure top reporters from other Texas-based organizations. (After all, it provides reports to the Old Grey Lady but more on that below.) While I have been impressed by many of the Tribune’s special reports, data journalism, and coverage in general, it never dawned on me until I had a chance conversation with a reporter from The Austin Chronicle at South by Southwest who accused “The Trib,” as he called it, of creating an unfair playing field for journalists who work at for-profit news organizations in Texas.

Since its formation in late 2009, The Trib has received large donations from foundations and individuals. It has also made many big-name hires: Emily Ramshaw from the Dallas Morning News, Jay Root from the Associated Press, and most recently Aman Batheja, of the Fort Worth Star-Telegram. Batheja recently accepted a buyout offer from the Star-Telegram during its latest round of layoffs, and quickly lined up his new political reporting gig at The Trib.

On the surface, this appears extremely positive, as laid-off Texas journalists may now have a news outlet to call home. But this should viewed as a boon for Texas’s other for-profit newspaper publishers and detrimental for their employees, as The Tribune’s open-source model will now enable other Texas news organizations to access Batheja’s high quality content for free. Therefore, the Star-Telegram no longer has to pay Batheja a salary while still getting his ace political coverage.

(Meanwhile, it is unclear whether the Star-Telegram will replace Batheja. Star-Telegram Managing Editor Lois Norder would only say that her organization was “not abandoning political coverage” in the wake of its recent round of buyouts.)

Evan Smith, CEO of The Texas Tribune

Evan Smith, CEO of The Texas Tribune

The ideas that a non-profit news organization is not beholden to interests that affect for-profit news organizations (corporations, advertisers, etc.) is also flawed. Because The Trib is subsidized by wealthy donors, it may not create the type of journalism that could harm its financial future. Smith has a strong financial incentive not to ruffle any feathers: According to The Texas Tribune’s 990 form, filed with the IRS in 2010, Smith made a $320,625 base salary and $13,038 in additional compensation. (I guess it helps that he’s also on the Tribune’s Board of Directors.)

From the Texas Tribune's 2010 2010 IRS filing.

A TT insider, whose anonymity I will protect here, told me that because it is important for The Trib to maintain positive relations with donors, the organization rarely takes strong stances on issues. Trib co-founder and CEO Evan Smith himself described membership, major donors, foundations, corporate sponsorship, and earned income as the sources of revenue for his non-profit news organization. However, as the screenshot from The Texas Tribune’s homepage below shows, corporate sponsorship and advertising look to be one and the same:

It’s doubtful that The Tribune would now write a damning report against Texas A&M or Austin Recovery. (In fact, only four days ago, Texas Tribune Executive Editor Ross Ramsey wrote a glowing profile in The New York Times titled “A Master Carver, at Work at A&M” about John Sharp, the new Texas A&M University System chancellor. While Ramsey admits previously working with Sharp in at the Texas Comptrollers Office in the 1990s, he does not mention that Texas A&M is a corporate sponsor of The Texas Tribune today.)

Can a startup non-profit news organization that relies on donors, members, and corporate sponsors for growth also excel at reporting that requires it to be non-partisan, as the Tribune claims to be? I argue that the answer is clearly “no!”

A full list of Texas Tribune donors and members is available HERE, as well as The Tribune’s 990 forms for the IRS.

Part 1: The law that could save sustainable journalism will be destroyed unless the US Senate acts now!

I recently argued that upstarts like Matter that have made successful pitches on Kickstarter are not the solution to solving journalism’s long-term problems. Why? Because crowdfunding, in its current form, does not permit people to make investments. Rather, crowdfunders make donations, or in some cases loans. The outcomes are variable and generally unsustainable

When David Cohn started the crowdsourced journalism non-profit Spot.us four years ago, it worked on a similar premise to Kiva, whereby donors received part or all of their money back if and when a crowd-funded story sold to a legacy media outlet. Cohn prevented  any one person from influencing which stories were funded by limiting each donor to funding 20% of the total amount raised for each pitch. (Of course this system is potentially flawed in that one donor can spread his/her money out to friends etc, but at least Cohn tried to implement a system of checks and balances.) But Spot.us was designed to assist existing organizations, not create entirely new media outlets.

We’re on the brink of a revolution that could lead to saving sustainable journalism and create many jobs

But we may be on the brink of a journalism revolution. Currently, only accredited investors are able to invest in newly formed companies, which prevents Kickstarter, Spot.us, and any other crowdfunding site from raising capital for startup companies and entrepreneurial journalism ventures.

Forbes reports:

Under current federal and state securities laws, startups are prohibited from selling stock or other securities via crowdfunding sites or social networking sites.  Such laws include:

  • A prohibition against “general solicitation” – which means that a company may not offer or sell securities unless there is a substantive, pre-existing relationship between the company (or a person acting on its behalf) and the prospective investor (see “Can I Raise Money For My Startup Via Twitter?” );
  • Disclosure and state law compliance requirements if the investors are not “accredited investors” — which usually makes the offering of securities too costly and onerous for a startup (see “Ask the Attorney – Securities Laws”);
  • A requirement that any intermediaries (including websites) must be registered with the SEC and applicable state securities commissions as a “broker-dealer” in order to legally accept any transaction-based compensation in connection with the sale of securities (see “Ask the Attorney – Beware of Finders”); and
  • A requirement that any company that has 500 or more shareholders and total assets exceeding $10 million must register with the SEC and file periodic reports.

These laws were designed with good intentions: Nobody wants to see Mom and Pop lose their hard-earned money to a snake oil salesman! But in today’s crowdfunded world, they no longer make sense. And when tech-savvy Americans realized this, they sought action.

In the United States Congress, Rep. Patrick McHenry (R-NC) (who made some excellent contributions to 2010 Census oversight, which I know from my time spent running MyTwoCensus.com), introduced crowdfunding legislation that was one of the most popular bipartisan initiatives in recent history, garnering support from Democrats all the way up to President Obama himself. McHenry’s bill, the Entrepreneur Access to Capital Act,  H.R. 2930 (full version here), passed 407 to 17.

This makes total sense. Republicans generally don’t believe that the government should be able to tell people how to spend their money (anyone can gamble or booze away all of their savings, can’t they?), and Democrats don’t see why accredited investors who are members of the “top 1%” should be the only folks permitted to invest in startups, thus preventing the upward mobility of the masses.

Specifically, the highlights of H.R. 2930 are as follows:

- Create a crowdfunding exemption from SEC regulations for firms raising up to $2 million, with individual investments limited to $10,000 or 10 percent of an investor’s annual income.

- Excludes crowdfunding investors from counting as shareholders for purposes of calculating the 499-shareholder cap under 12(g) of the Securities Exchange Act

- Preempt state law and exempts the ban on general solicitation for the new crowdfunding exemption.

But now, as always seems to be the case as of late with the American government,  just when we’re on the brink of something great, the millionaire’s club also known as the United States Senate has failed to move forward with this legislation, thus preventing it from making its way to President Obama’s desk to become a law.

Despite Senate Republican Scott Brown of Massachusetts championing similar legislation to the resolution that the House of Representatives passed, lobbying groups like the NASAA (North American Securities Administrators Association, “the oldest international organization devoted to investor protection”) have wielded their influence over the 100 people who control the fates of the other 300+ million.

What needs to happen now is simple: An online campaign of the magnitude of the SOPA/PIPA variety must be enacted to create swift and effective action to boost America’s economy by causing the US Senate to pass comprehensive crowdfunding legislation.  Sites like crowdfundinglaw.com and startupexemption.com have already been set up to explain this law and advocate its passage. And using a Wefunder.com petition, more than $6 million has already been pledged to support investment in new ventures if this legislation is passed.

But will Google, Craigslist, Wikipedia, and all of the other organizations that led the charge against SOPA and PIPA step in to assist with this one?

As someone who is not interested in the “rewards” that Kickstarter campaigns promise their donors, but rather direct return on investment in monetary form, I and other like-minded people would be happy to invest in startups despite our lack of accredited investor status. I don’t gamble in casinos, but I’d be happy to gamble on good ideas and innovation.

Coming soon: Direct effects of crowdfunding legislation on new journalism business models…