Non US Viewers Aren’t as Valuable: Metacafe Won’t Pay for exUS Views

Many big online-video deals are US focused, and want to exclude paying for exUS markets. I understand this, as my marketing job is US only. I represent the US on a “global marketing team” but I don’t have control on exUS spend, nor does it impact my bonus significantly.

Metacafe, a site born is Israel with extensive exUS views, has long realized they could more easily attract US advertisers. But the creators (who participate in Metacafe Rewards) were paid about $5 for 1,000 views). Yesterday Metacafe announced a New Deal for its creators — some of whom were monetizing their videos soley on Metacafe and were making as much as $100K a year.

According to a forum post, Metacafe will pay $2 for every 1,000 views a video accepted into the program receives in the United States – via its web site or embedded player. For videos already accepted into the program, views that occur outside the United States will no longer count toward payment. As usual, the video must be viewed 20,000 times to be in the Producer Rewards program, and payments aren’t made until the video earns $100.

Here’s the interesting part of the story. I expected to see a creator revolution on Metacafe’s forum, but there was surpising empathy. Perhaps the disgruntled creators have already abandoned the site, and maybe creators are being gentle in hopes they will receive favorable treatment. But the feedback was largely supportive: see for yourself.

I am even more impressed that the forum manager “Asaf” appears to have freedom to address concerns — even about the financial state of the company: “Metacafe is not going out of business. As a private company we don’t disclose financial details, but I can tell you that we are growing our revenues each quarter and have plenty of cash in the bank. These changes to the Producer Rewards program will help better align the program costs with our revenues, and, as I said earlier, will keep us in the game for a while longer.” If this was a public company we’d never see a statement like that, of course. But it’s a refreshing part about a smaller company… direct communication between creators and someone who makes policy decisions. 

We’re seeing the ecomony impact the online-video space, but some of this shouldn’t be surprising. Revver and Metacafe made financial commitments to creators that required them paying even if ad dollars weren’t flowing. It was a risk they took to attract creators, and it made them defacto amateur charity foundations. YouTube, by contrast, has a low-risk deal. If they sell ads, creators get a percentage. No ads, no revenue. My recommendation is that Metacafe do the same thing. Good creators will have inventory, and videos that can’t fetch ads won’t cost the company. It’s a tough transition but it’s fair.

Fortunately YouTube’s payment to Nalts was solid for October, but still not enough to rescue mounting debt. In a wonderful moment of irony, I’ve been interupted from writing this post 18 times because my wife is looking at our bank accounts and managing cash flow. Ahhh… the sweet smell of a recession. As Kit Kitridge said in “American Girl Doll” movie, “the depression was hard but it taught us a lot.” 

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