Word on the street is that two of Revver’s co-founders have left the company.
Steven Starr will remain CEO, but co-founders Ian Clarke and Oliver Luckett and other members of the staff will depart (though apparently some will have consulting roles).
In a sign of the times, they are being replaced by offline/traditional media folk:
It appears that the company is gearing up for a change in direction, because it has also brought in new executives from the media, marketing, and advertising worlds. In an official statement to AdAge, Revver maintained the “personnel changes are intended to advance the company’s infrastructure and bolster its marketing and advertising efforts in 2007.”
I do not know the two blokes who are leaving, and I sure do not want to say anything about those who are arriving. I wish that Ian Clarke and Oliver Luckett are off to greener pastures and hope that this was not a result of VCs pushing them out. After all:
Revver has raised about $13 million from Comcast Interactive Capital, Turner Broadcasting, Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards, and William Randolph Hearst III.
You thought Hearst Numero Uno was a tough sell? All I know is this:
- for all of the hype that permeates online video, it’s a bloody hard business to operate in.
- after YouTube was bought out by Google, everyone else who got funded by VCs in the file sharing space died a little, and many will die in 2007.
Or, rather merge, if egos allow. These firms have a lot of money secured but burn plenty each month, problem: little revenue.
Remember a long ago time when this happened? Hmm… ask Prince.
The problem is that online video is a young business, online advertising will make it a $3B industry in 2010 but as of now it’s still small. And, you can’t trust projections anyway. Any company that has $13M in financing (incidentally, the same amount YouTube got from Sequoia) will have financial backers that expect large payouts, soon.
Problem for those VCs who followed Sequoia’s YouTube investment, Sequoia had secured YouTube’s exit before Chad Hurley, Jawed Karim and Steve Chen even got the first check. Sequoia would ensure that it would hedge its holdings in Google and that it would get its YouTube money back by making one buy the other. Yes, we’re conspiracy theory lovers.
Other VCs followed like sheep. And when Google bought YouTube, Google became #1 in search and video. See a problem?
The other YouTube clones now trade at discounts, not at premiums. And, VCs won’t write more checks for 99.9% of the YouTube clones. If they did, Metacafe would not be selling to… whoever, it would raise more money. And that might have even been PR to get people excited.
As such, we respectfully disagree with Mashable’s Pete Cashmore when he states:
their value has almost certainly increased following YouTube’s acquisition.
Why, because of the “greater fool theory?”
While Mr. Cashmore is right to state that Revver could have added more content, the truth is that YouTube won the game by cheating and ripping off content. It’s that simple. I love YouTube and admire the founders and all, but I also liked Napster but knew it was not exactly right and legit.
Where we somewhat disagree is the conventional wisdom surrounding the aura of Web 2.0 community features, Cashmore continues:
in particular, they could have added comments to help build a community around the clips.
Well, we’re not sure if in 1, 3 or 10 years people will look back at the entire “comment” madness and think it was cool. Go to YouTube and listen to, for example, Thin Lizzy’s version of Whiskey in the Jar vs. Metallica’s version of Whiskey in the Jar. Every single comment is on how Metallica sux or Thin Lizzy is weak. 80% of comments are, frankly, useless and devoid of value. Don’t take it from me, this was why Robert Scoble said he does not use Digg because “You go to Digg and get a hundred comments showing how juvenile some of the commentors are.” All right, that one is a paraphrase. Here is what he said:
The comments there are a good example of why I don’t get much value from Digg. Too much noise and very little knowledge.
But, in our blurry Web 2.0 drunken stage, we think Comments are cool, way cool. Yeah so was that stupid sock.
The concept of commenting is great. Its practice is awful. The sense of community is essential, but so is content, and Revver failed to get content. It also failed thus far with Commerce. The third C in the Content, Commerce and Community trifecta of online success. We do however think that the new management that got parachuted today will help.
Back to this move: Revver and other such companies have been funded with ease when YouTube was growing fast and a sought-after takeover target. But I do not think many VCs will want to fund them further. Will online video burst the bubble? Maybe.
Rather, file sharing sites will pop. And content owners like WatchMojo.com will probably pull content from most of the file sharing sites. Just last month Current TV pulled its content from Yahoo! video. Our videos have been seen 1M times on YouTube, Google Video etc., but guess what, branding does not pay the bills. All I know is that our bills are nowhere near where the file sharing sites’ are, yet we have a clear path to revenues and profits. When you publish content, it’s as easy as 1, 2, 3.
When you offer a platform for others to share content, you get press and one out of a million makes a billion, but by and large you also set yourself up for a massive burn rate.
If this was not the case, why the sudden exit of Revver’s two co-founders.
I am biased: I produce video, I produce the content. User generated or amateur video will only take you so far. After a while, the people who are attributing all of that content feel like they are being exploited.
As NewTeeVee mentions, Revver plays up the “we pay producers” angle but few actually make any money. That’s not a good thing for PR, or for business… According to Ad Age:
A quick check with a popular content provider who regularly posts videos with Revver said it was difficult to make too much money from Revver and that a producer would generally need to distribute videos somewhere else to really make it pay. A quick check on Revver over the last month reveals ads for Palm’s Treo, Warner Bros., Turner’s GameTap site and a site called Videomaker.com.
If the guys who were pushed out from, I mean “left Revver voluntarily” are reading this, please drop me a line. It’s not you, it’s them. If you doubt me, the news came from Edelman while CEO Starr was on vacation. According to Ad Age:
Mr. Starr is on vacation and was unavailable to talk about the changes but the company released a statement through its public relations firm, Edelman, explaining that the “personnel changes are intended to advance the company’s infrastructure and bolster its marketing and advertising efforts in 2007…
Wow! ‘Nuff said. Back to work. We actually have to create content and sell ads. Gee, think of that!
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December 21st, 2006 at 10:20 am
[…] Om suggests hipmojo.com for no holds barred commentary. […]
December 24th, 2006 at 5:39 pm
This was a very interesting analysis. Quite well done (Kevin from TasteTV, http://www.TasteTV.com).
December 26th, 2006 at 11:28 am
[…] Revver/Online Video: “It was the best of times, it was the worst of times” La bulle sur les startup vidéos explosera-t’elle en 2007? Une tentative d’analyses avec qq arguments intéressants. (tags: advertising hosting video sharing usergeneratedcontent ugc) […]