Nearly 99% of user generated content is owned by the social networks like Facebook or YouTube and it accounts for a large portion of their profit. And we are talking about Billions of Dollars of Profits!
YouTube will continue to grow at 21% for the next four years, and that by 2020, the site will have generated $27.4 billion in revenues.
But lots of authors are not creating content for YouTube anymore because it’s not a sustainable business. YouTube might be a good place to make you famous but it is a bad place to make money especially for the long tail videos, videos with less views or channels with less than 1,000 subscribers, since content creators are now competing with each other to get enough views to generate real money.
There are a few reasons why most video creators are hard to succeed on YouTube:
The question is: Does YouTube Value Their Loyal Creators?
To value something is to appreciate its qualities, while the creators investing time, energy, effort, and sacrifice in its creation. The truth is that we are all deeply valuable, each of us offers value in this digital ecosystem in unique ways.
Flixxo is a decentralized network for content distribution, based on Bittorrent protocol. Instead of spending an enormous amount of money for storing and distributing its content, Flixxo get rid of centralized & expensive servers and choose to reward users who are willing to lend their storage space, rewarding them with Flixx token. Imagine having 5 million users sharing 1Gb each, that’s 5 Petabytes of data storage!
Video creators will then pay for the distribution of their media using Flixx token and remove unnecessary intermediate parties by sharing their revenues with the “seeders” — a term coined in the torrents environment that refers to those who have downloaded content, keep it in their computer and share it.
Flixxo developed peer-to-peer cryptocurrency payments to be used within the platform, called Flixx. Through this token, users can earn incentives for seeding legal content and get a channel for connecting directly with media producers. It is a two-way system, in which producers pay users for improving the network, and users can give authors a recognition for their work.
On Flixxo every author uploads his/her work to the network and chooses the revenue model: how much Flixx it would cost to watch his content and which percentage of its earnings will be shared with the distributors. The more they share, the more incentives for the network to distribute and make a video go viral. If a user ran out of credits, he/she can also give some seconds of his attention to sponsored content in exchange of Flixx. This structure creates an organic market, as advertisers need to buy Flixx from content creators in order to showcase their sponsored content.
Here are list of comparable features between Flixxo, YouTube and Vimeo:
Let’s make a rough calculation of how much a video creator will get on YouTube:
→ Roger is a well known video creator which has 100,000 subscribers and earned a gross revenue of $100,000 per year.
→ YouTube takes 45% of $100,000 = $45,000
→ Roger pays the tax around 30% of $55,000 = $16,500.
→ Roger spends $500 per month on operational cost (studio, electricity, editing, etc)
→ Roger end up with less than 50% of his gross revenue = $32,500
Let’s calculate how much Roger will make on Flixxo:
→ Roger upload many interesting videos, set a price to watch each video and earned a gross revenue of $100,000 per year.
→ Roger sets 5% of it’s revenue ($5,000 worth of Flixxo tokens) as rewards for seeders and sharers.
→ Flixxo takes 10% of $100,000 = $10,000
→ Let’s say Roger pays the tax around 30% of $90,000 = $27,000
→ Roger spends $500 per month on operational cost (studio, electricity, editing, etc)
→ Roger’s revenue is $53,000 (in Flixxo tokens)
→ Since Roger now owns $53,000 worth of Flixxo tokens, he can sell some tokens to advertisers who need the tokens to start advertise on Flixxo. It is another income stream because Roger can sell the tokens with higher price if there is more demand. Advertisers will then use these tokens to reward users who are super keen to fully watch their ad content (effective marketing).
Now Rita is a viewer of Roger’s video, let’s see how much she will get for downloading and sharing videos on YouTube:
→ NONE
Now let’s calculate how much she will get for downloading and sharing the videos on Flixxo (consider there are 50 persons doing the same thing):
→ $5,000 (from Roger’s shared-revenue) / 50 = $100 per person
Rita gets $100 for watching, downloading and sharing her favourite videos. And she will get even more if she decides to watch advertiser’s video.
At the end of the day everybody is happy. Roger earns more money, Rita get paid to watch & share her favourite videos and Advertiser can reach more consumers who will significantly pay more attention to the ad content.
Through Social Economy approach, Flixxo is building a new digital ecosystem which results in value addition for all parties involved: the creators, the users, the advertisers.
