By Greg Sandoval, 31 October 2006 08:55
NEWS
Google has begun sharing advertising revenue with the makers of a popular video clip in a groundbreaking deal that could drive up the costs of competing in the fledgling video-sharing sector.
The search company has agreed to turn over most advertising revenue generated by the latest video from Fritz Grobe and Stephen Voltz, creators of "The Diet Coke & Mentos Experiment", according to Peter Chane, a senior product manager for Google Video.
In exchange, Grobe and Voltz, who saw their original offering - which shows a version of Vegas' Bellagio Fountains made of 101 two litre bottles of Diet Coke and 523 Mentos - catch fire with video-sharing fans last summer, have agreed to let Google host their latest video, "The Diet Coke & Mentos Experiment II".
Until now, most amateur-made material that appears on video-sharing sites was made for fun. But inviting talented videographers to share in the ad revenue generated by their clips is the way of the video-sharing future, analysts say. Metacafe, one of the top 10 video-sharing sites, also announced on Monday that it will pay $5 to video creators for every 1,000 times their video is watched.
Critics argue most video-sharing companies are profitless, and their costs, such as the high price of bandwidth, make sharing ad revenue difficult. Yet, video-sharing site Revver.com, which pays 50 per cent of ad revenue to videographers, is betting audiences will follow the best video makers. Apparently, the deep-pocketed Google is making the same bet.
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Chane said: "This is the first case where we matched up video content with advertising. We've taken user-submitted material that is not considered professional content and monetised it."
Grobe and Voltz pocketed $35,000 - their share of the ad revenue paid to them by Revver - for their first Coke-and-Mentos video back in July. Now, the pair could earn big bucks from Google if the latest video is a hit. The two are also hosting a video-making contest sponsored by Coca-Cola, which paid them an undisclosed amount.
Greg Sandoval writes for CNET News.com
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