BUSINESS BLOGS
BUSINESS BLOGS
category: business
02 Nov 2008
related tags: Rumors | Video | Revver |

Revver is having problems, this after former eUniverse/Intermix founder Brad Greenspan bought the company for less than $5M… the company had raised $12.7M from VCs.

Disclosure 1: Revver is part of WatchMojo.com’s syndication network.  From Day 1, it accounts for 0.32% of our total web streams.  In case you are wondering, YouTube accounts for 45% of our total streams since Day 1.  Our WatchMojo.com site accounts for 3% - which shows just how different web video publishing is to text content publishing online.  But is that ever a separate post for another day.

Disclosure 2: Right before Greenspan bought the firm, I looked at acquiring Revver along with a well-known investor.  I passed, when advisors told me that continuing to create original content (via WatchMojo.com) was smarter than branching off into distribution (and a relatively smaller one) via Revver.

Whether Revver survives or not, you know that there is an impending shakedown in the video aggregator space around the corner.

Side note, considering what FOX Broadcasting President Peter Liguori just said:

Liguori started with talking about the value of content, in this digital age: No matter how sexy distribution is made out to be, it is just pipes…it was what you put into the pipe that matter. Skin and sports has always driven the content business. It is the message that makes the medium, and creativity drives the bottom line.

Distributors desperately need the content we all produce to keep them in business. It is that simple, it is that hard.

… the decision not to make an offer was wise.

Anyway, Revver will go down in history as a case study in missed opportunities.  Revver launched before YouTube, and came after iFilm.  Before YouTube became a common term, people would rush to iFilm to find clips.  Embedding was out of the question… mind you.

Revver came along and made two inter-related decisions:

1- offer content creators / owners the opportunity to generate revenue from their work.
2- charge advertisers via the Cost Per Click (CPC) model where they only paid if someone clicked on their ads.

You can argue that one of these was a strategic decision, the other a tactical one.  Frankly, either one of those could be both strategic and tactical.

At first glance, #1 is the strategy, #2 is the tactic; though it can be argued that creating a performance based ad model was the strategy.

All to say: Revver failed strategically because the CPC model for video content is a deeply flawed one, for two main reasons:

a) As I’ve highlighted many times, with text content, a reader leans forward, keeps hand remains on the mouse, scrolling down a screen, about to click on the next page, a related link or an ad; with video, you press play, sit back and watch the video.  The ad interaction is very different.

b) Moreover, the mere notion that advertising needs to represent a positive ROI from Day 1 is crazy man’s stance.  Advertising will always be ROI negative.  Even Google’s much vaunted Ad Sense program fails to deliver positive ROIs for most advertisers, it’s just that is is more measurable and measured.

Ultimately, had Revver gone with a CPM model initially (it since adopted one) then content owners would have obtained a more decent return on their videos… allowing the site to aggregate more - and better - content, which in turn would have made the site generate a bigger audience.

I have no insight into the future of Revver.  I don’t even quite know what Brad Greenspan’s plans are for his company let alone Revver… but ultimately, it’s not enough to have the right strategy or tactics, you have to understand that strategies need to be reinforced with the right tactics, and each tactic in fact has to be planned and executed strategically.