YouTube Subscribes to the Calacanis Kool-Aid

By Joe on January 27, 2007

YouTube recently announced they will be offering monetary compensation for video content producers. Jason Calacanis did the same thing with Netscape, and well it’s a decent idea, but did it take off? According to Calacanis, compensating users for their community efforts helps the community grow. Further, will this benefit YouTube and their video community?

Jason Calacanis took Netscape.com under his wing and completely restructured the static news homepage to a revived social news/bookmarking web site. It was good, and then he had a rather unique idea of paying 1% of users to generate content for Netscape. It was awesome until you read that he put a bounty out for the top users of Digg, Reddit, and Newsvine. This shocked the social news community that money would be shaping the news and were insulted by the offer. Jason paid users who have migrated from Digg and other social news services to post for him.

Looking back at when I initially posted about Netscape, June 17th 2006. Here is an Alexa traffic chart showing the traffic pattern:

The solid red bar is the launch of Netscape Beta. The arrow is around when the announcement of paying for content was made. As you can see, it may have resulted in a small spike of traffic, but has since declined. Why did this ingenius idea fail? It could be the tone of Calacanis when he introduced his idea to the online community. It could be that users didn’t want to see paid users versus themselves as regular users. It was probably a combination of factors. I strongly believe that Calacanis wanted to try to save Netscape by using all means possible (using cash!) and unfortunantely, it didn’t work.
YouTube on the other hand, has a trend of constant growth. It’s amazing and I don’t know if monetary compensation would really show growth.

I wonder how offering cash for content will pan out for YouTube. First off they announced it not via the blogs or social media; which may have helped with PR. Second, their announcement isn’t asking video publishers on Google Video, iFILM or Metacafe to flock on over to YouTube. I believe this was a good move to not hold money over their competitors heads. The ones that will prove benefitial will learn of it and will provide videos to YouTube.
What do you think about YouTube compensating their video content producers? Share your opinion in the comments!

[tags]YouTube, Netscape, Money, Revenue Sharing, Internet, Web 2.0, Internet Communities, Jason Calacanis, Ideas, Trend, Video Sharing[/tags]

Joe

Jason,

Thanks for commenting. When you took over the traffic, you helped Netscape by clotting the loss of traffic.

You seem to lay responsibility into Netscape Mail migrating to AOL/AIM Mail. Is it true that 35% of all Netscape-related traffic was just to access their e-mail?

Overall, I'm not disputing the fact you did salvage a dying homepage. However, since I don't know the ROI of paying the anchors/navigators, I was inquiring on if having paid content producers would prove to be a profitable investment.

I suspect that paying content producers initially helps boost an unknown product, but there is a certain point when the community functions on its own.

Perhaps, as a venture capitalist that embraces Web 2.0, you might attest to that?

Jason

If you look at that graph what you see is that Netscape was trending down for three years and when I took it over we were able to stop the traffic from going away!!!

Additionally, when I took over 35% of the traffic from Web-based email moved over to AIM/AOL.COM (this was not my decision).

So, in truth the traffic at Netscape went way up when you take out the email.

Also, Netscape is on the SAME EXACT growth curve as digg in their first year. the number of stories, votes, comments, and members are all tracking EXACTLY like digg.

So, Netscape is back and doing better than it has in three years!

YouTube Subscribes to the Calacanis Kool-Aid

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