This year alone, the Dollar dropped 20% against the Shekel, causing startups to run out of money quicker than what they expected. In the article “Start-ups stuck in winter doldrums“, Globes interviews Erez Shachar, a managing partner at Evergreen Venture Partners, and touches on the influence that the weakening of the dollar (hence the strengthening of the Shekel) has on Israeli startups.

Here’s a recap of the situation:

* Israeli companies raise money in Dollars, but pay operating expenses in Shekels.
* Effectively, their burn rate is higher the weaker the Dollar gets.
* Salaries, estimated at 70% of the startup’s operating expenses, are the biggest cash spender.
* As a result, the quickly disappearing cash reservoirs that startup companies relied upon, force the startups to initiate financing rounds again sooner than expected.
* Venture capitalists and company managers already realize that an exchange rate of NIS 3.70/$ can quickly become NIS 3.40/$, and are preparing accordingly.

In his comments, Erez Shachar says that the problem is acute with Evergreen’s portfolio companies:

“This is why we’re encouraging companies to look at other markets, such as Europe and Asia as a kind of hedge against the exchange rate situation. It’s the right thing to do in any case. The market orientation of Israeli companies has always been the US, and the time has come to look at other markets. There’s no reason not to sell to and hook up with Asians and Europeans.”

It’s common sense to know that if the US falls into a recession, the value of the dollar will fall further. Michael Eisenberg, a partner at Benchmark Capital, gives a few measures to deal with the situation in his post “Open Letter to my CEOs and Israeli Entrepreneurs“. Worth a read.

While the strike by Hollywood writers is dragging on long enough to threaten the hallowed Oscars, video-viewing on the web is expanding as fast as ever. As a result, writers, directors and actors are considering splitting from the studios for good, creating their own videos that they can distribute across the web.

But what are the options, really, if you want to make a career as a screenwriter in the 21st century? Studios and broadcasters are balking at giving writers a share of online revenues, and if the length of this strike is any indication, writers are going to be hard-pressed to get a good deal even if the studio execs change their minds. Meanwhile, market-leading online video site YouTube shares only a token sum with even the most successful video creators on its site. To a creative type exploring options, this all looks pretty grim.

Yet there’s a whole range of new efforts to produce quality video content, from new studios founded by top directors and backed by hedge funds, to scrappy online video startups run by handfuls of web developers. Most of these sites hope to make money for content creators through advertising of some form, whether the usual banner and text-link ads, or various types of ads embedded before, within or after videos.

Notes: See Comscore table beneath the list for US and world traffic data. With an exception or two, we look at companies through an online video creator’s lens. We’re not counting video ad networks that don’t have their own video site or don’t otherwise produce or compensate content creation. We’re also not counting livecasting sites, which are more for people who blog their lives, as well as for covering live news events (if you want to see what your options are in livestreaming, check out our review, here).

If there’s a site you like, that you don’t see here, tell us about it in the comment. Thanks!

The sites:

Blip.tv:
Blip.tv is relatively small, at one and a quarter million unique visitors worldwide in December, but it has grown more than 125 percent in the past six months, according to Comscore. It offers revenue arrangements and help with distribution that are especially favorable to content creators. Revenue is shared 50/50, and the company also assists creators with PR, ad sales and syndication of their videos on other sites. Another plus is the option of embedding your own advertisements on your Blip.tv page. They warn that these DIY ads should not be sponsored advertisements, but rather CPM or CPC ads through AdSense or the like. Read more about it on their TOS page.

Blowtorch (our coverage):
A new, unlaunched $50 million effort that will show its own feature films and clips at hundreds of movie theaters across the country, starting later this year. It wants to be a movie studio of sorts, and a distribution network (DVDs), and an online community. The company tells us it is still working out deals for how it will reward aspiring writers, directors and actors. Blowtorch is producing its own feature-length movies, and has already bought the rights to “You Are Here,” a feature film that will be released in spring, 2008. It says it plans to buy the rights to more films that it finds to be a good fit with its target demographic of 18-24 year old college students.

Break.com:
These guys offer a pretty straight-forward way of making money, but it won’t necessarily be easy to do so. They will pay you up to $2,000 if your original video hits the homepage of the site - the keywords there being “up to” and “if”. Still, Break.com has been around for a while (since 1998) and claims 18,000,000 unique views a month, with 4.4 million unique visitors in, according to Comscore. Also, movie studio Lionsgate holds a 40 percent stake in the company. Also, Break has tried to lure striking writers across the picket line, offering $5,000 to the highest-rated video from a striker (more on that here). It had 4.3 unique visitors worldwide in December, according to Comscore.

Broadband Enterprises (our coverage):
This company isn’t a video site, instead it does everything else. It helps syndicate a creator’s content to web publishers, it inserts ads into the videos, and also finances its own videos, that it then syndicates and monetizes through ad sponsorships. It caters to a groundswell of writers, actors and directors interested in making careers online. It works out case-by-case revenue-sharing deals with content creators. We’re including it because the company makes case-by-case deals with creators to syndicate their content.

Channel101.com:
“The unavoidable future of entertainment,” is one of the older breeding grounds for video content creators, but expect no coddling. Viewers vote on which shows should return, and which should leave the site. Creators of selected shows produce a new episode for the next round. Don’t even think about profit-sharing. According to the site: “For the creatives that participate, Channel 101 is where the rubber meets the road. The deadlines are unreasonable, the time limit is impossible, the pay is non existent and the judgment is blunt.” Traffic is minimal but the concept remains unique.

Crackle (our coverage):
This company has gone from being a startup that featured user-created videos to a Sony-owned incubator for Hollywood talent. When it made the switch last year, it began signing deals with content creators, paying them to produce quality shows, and negotiated distribution rights. The company says its traffic is growing, with advertisers lining up because they are newly confident in the quality and taste of the content. Since the switch in July, US traffic has doubled, by Comscore’s measure, and it had more than 5.1 million unique visitors in December. That trend may have stayed strong through December because people who stopped watching TV due to the writers’ strike have spent more time on Crackle (our coverage).

DailyMotion (our coverage):
The Paris-based company is big in the francophone world, and made a push into the US starting last year. It promises a revenue-sharing solution for top content producers, but details are still scant at the moment. Separately, it raised $34 million earlier this year. It grew to 32 million unique viewers worldwide in December, according to Comscore.

DECA.tv (our coverage):
Perhaps best known as the studio behind Boing Boing TV, DECA.tv scouts out video ideas, finances and produces shows, then helps distribute them. There’s no public information on how the company pays or shares revenue with creators, although this New York Times article says Boing Boing retains control and ownership.

Funny or Die (our coverage):
This comedy-clip site has an uniquely-titled voting system and the branding of comedian Will Ferrell, but it’s not clear how revenue-sharing works for other content creators. It had 2.5 million unique visitors in December, according to Comscore, worldwide.

Metacafe (our coverage):
It offer a very straight-forward content producer payout plan via its Producer Rewards program — 1,000 views equals $5 and payments start after 20,000 view ($100). The sites top earner has banked over $89,000, but the rest of the top 10 are significantly lower (most in the $10K - $20K range). It had 27.5 million unique visitors in December worldwide, with a 12 percent growth rate in the last six months, according to Comscore

National Banana (our coverage):
The site doesn’t say anything about paying anyone, but there’s a curious message on the front page that reads: “New Site Coming 2008: Until then, please enjoy our viruses and spyware.”

Next New Networks (our coverage):
The New York company is creating videos focused on niche audiences of users, that it hopes to distribute across blogs, social networks, and other sites. It shares revenue on a case-by-case basis.

ON Networks (our coverage):
This startup wants to work with people who have “a proven track record in professional high definition production” and who have an “episodic story you want to tell,” as an application form on its site says. But there’s no more information available.

Revision3 (our coverage):
Original programming: Prominent shows (mostly aimed at tech geeks) include Diggnation (featuring one of Revision3’s founders, Kevin Rose) and The GigaOm Show.

Revver (our coverage):
Revver allows your content to be embedded with both CPM (impression-based) and CPC (click-based) advertisements and will split all advertising revenueS 50/50 with you. They have a break-down of all revenue-related questions here.

Veoh (our coverage):
Veoh allows video makers the option of attaching a pay-to-own or pay-to-rent system to their content. This could be a place to turn if you are not interested in an advertising-based model to make money.

Vimeo:
While Vimeo recently started offering content producers the option of uploading their videos in HD, they do not yet have a revenue-sharing model available.

YouTube (our coverage):
The largest, most obvious video content option, YouTube serves up millions of views everyday across its wide spectrum of videos. The chances of making any meaningful money off of your videos on YouTube are unfortunately pretty grim at the moment. Unless you are accepted into their revenue sharing program as a “Partner” - which currently only the most popular video content producers are - you’re not going to see a dime from Google. Right now YouTube only has 100 or so of these partners, though they welcome anyone to apply here. In the words of celebrity blogger/vlogger Perez Hilton, who said he made a meagre $5,000 as a partner: “[N]ot to overestimate my own worth, but I probably have sent more traffic to YouTube than anyone else on the Internet.” Hilton has since quit using YouTube.

Data:

Conclusion:

These are some of the better-known options and there are even more out there. Some may be better equipped to propel already-popular actors/writers/directors (like Funny or Die), but many are open enough that simply a good or at least creative idea can lead to great exposure and potentially some substantial revenue. Many of these video sites syndicate creator’s content with each other’s sites, because they all want to grow the overall exposure that online video gets to people (more on that here).

Online video is still a very young industry and as it matures — even making its way into the living room on a large scale via technologies such as IPTV — the potential can be even greater. Video creators and the web have long flirted with one another in a rather rigid sense, online video should take that relationship to the next level.

MG Siegler blogs on technology and new media at ParisLemon.com.

[Julie Ruvolo and Eric Eldon contributed to this article.]

[photo: flickr/John Edwards 2008]

David Hornik took a nice look at Venture Capital in China earlier this month. I came across it a few days ago and couldn't resist sharing it with my readers.

At 1500 or so words, David's piece is fairly hefty by Internet standards. But I enjoyed reading it. With a broad brush, he paints a picture of VC involvement in China - the attraction, the challenges, some of the major players. The piece came out of a recent trip he took to the People's Republic.




A short excerpt should whet your appetite:

To the mind of the Chinese investing community, the market dynamics described above well outweigh the risks of investing in the current environment. Huge markets with lots of business white space provides for numerous opportunities for economic gain. While American investors are busy debating the degree to which the US startup market is saturated, Chinese investors are having trouble keeping up with the inflow of opportunities. The opportunities in China seem unbounded, making foreign investors starry-eyed.

Give David's piece a look. I think you'll enjoy it... See full article.

Related Entries:

China Venture Capital Forums Influence Policy - 19 January 2006

Red Hot China Venture Capital Forum Strikes Reform Gong - 07 April 2006

China Venture Capital Research Institute Issues New China VC Yearbook - 13 June 2006

In Beijing: China Venture Capital Semi-Annual Forum - 09 July 2007

Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com.

David Hornik took a nice look at Venture Capital in China earlier this month. I came across it a few days ago and couldn't resist sharing it with my readers.

At 1500 or so words, David's piece is fairly hefty by Internet standards. But I enjoyed reading it. With a broad brush, he paints a picture of VC involvement in China - the attraction, the challenges, some of the major players. The piece came out of a recent trip he took to the People's Republic.




A short excerpt should whet your appetite:

To the mind of the Chinese investing community, the market dynamics described above well outweigh the risks of investing in the current environment. Huge markets with lots of business white space provides for numerous opportunities for economic gain. While American investors are busy debating the degree to which the US startup market is saturated, Chinese investors are having trouble keeping up with the inflow of opportunities. The opportunities in China seem unbounded, making foreign investors starry-eyed.

Give David's piece a look. I think you'll enjoy it... See full article.

Related Entries:

China Venture Capital Forums Influence Policy - 19 January 2006

Red Hot China Venture Capital Forum Strikes Reform Gong - 07 April 2006

China Venture Capital Research Institute Issues New China VC Yearbook - 13 June 2006

In Beijing: China Venture Capital Semi-Annual Forum - 09 July 2007

Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com.

• 12 Things I Learned By 42 That I Wish I Knew At 22
  By the time I was 22, I knew who I wanted to marry, was in the process of quitting college, going into debt, and thought that I would be a millionaire by the time I was 30 because I was so smart. If I could go back in time, here are a few items I would tell my 22 year old self.

Check out Lookery’s guaranteed payment program for Facebook and Bebo apps.

Lookery is currently taking submissions for a new publisher program that offers guaranteed payments of US$.125 CPM across 100% of a Facebook or Bebo application’s traffic. We’re seeking a billion pages a month for this new program, at a rate of 33 million a day, and are guaranteeing the rate through the end of April 2008.

[From Lookery » New Guaranteed Payment Program]

Glam, the controversial woman’s content and ad network run by Samir Arora (pictured left), is raising between $50-100 million in cash, and is expected to finalize the amount soon, we’ve confirmed with sources.

Along with that will be up to $100 million in debt, but the debt will be raised over the next year.

The news is in fact not new. We first reported Glam’s move to do so back in August, when the company emerged reporting a blitz of growth and boasting it was the fastest growing site on the Web. But we’re getting more details confirmed, as follows.

The company had originally sought to raise a mix of cash and debt, for a total $200 (see its prospectus, page 4), and that’s apparently still part of the plan. (Some reports earlier today didn’t account for the fact that Glam is also raising debt, and wrongly suggested Glam had lowered its sites).

Glam has created consternation in the industry. Glam is selling ads for scores of fashion and beauty sites, and sells ads for some of its own content sites too. Older competitors such as NBC/iVillage have looked on as Glam’s network has shot past their own, in terms of page views and unique viewers — though Glam doesn’t own most its sites outright but merely sells the ads on them. Glam has picked off top sales executives and created considerable animosity in the process — in fact, we’re hearing another big hire is about to be announced on Monday: a Yahoo top executive and holder of numerous Yahoo patents, in charge of display advertising technology. Glam has boosted its direct sales team to near 50, up from 5 last year. The Yahoo executive is designed to help Glam expand its technology platform team in Silicon Valley.

Glam’s chief executive Samir Arora (pictured above in January’s Portfolio magazine) is quite the slick salesman, habitually wearing pink, and with a penchant for French fashion shoes. His detractors paint him as an upstart whose network is more smoke and mirrors than the juggernaut he paints it out to be. See the recent Portfolio article here, and our pieces here and here for more on Glam’s model and the controversy around it.

Some reports suggest that Glam has sought to raise money at a near $1 billion valuation, but our sources have never confirmed that figure. We’re hearing Glam consistently got feedback during fundraising that it could raise money at a value of between $350 and $500 million, not more. Even that is high, considering Glam is mere four years old and was valued at $150 million a year ago. (Though IGN, a men’s/gaming site comparable to Glam in size, was purchased by Fox for $650 million in 2005).

Glam’s existing investors, including DAG Ventures, Draper Fisher Jurvetson, Accel Partners, and WaldenVC are all participating in the round, we’re told. DFJ’s Tim Draper is adding to the hype, going around saying Glam is the fastest growing company “on the face of the earth,” faster than his previous companies Skype and Hotmail.

We’re also hearing Glam has an annual revenue (run rate) of $40 million, and is aiming for $80 million or more this year. Valuations are tied to revenue, and media companies are typically valued at three or more times revenue, but rarely as much as ten. Glam lately has been trying to push itself toward a social network, which could give it a higher value than an traditional ad network because of the community that builds around it (though the jury appears to be out right now on how vibrant Glam can build a network, when much of the community lives around the individual blogs it represents).

The value question will also be dictated by whether Glam can claim “ownership” of the 44 million unique visitors it says it has globally. Traffic measurement company Comscore has decided to designate these visitors to Glam’s camp, even though Glam doesn’t own the sites of its network outright. Glam argues Comscore is correct to designate those uniques to Glam, because Glam retains an exclusive ad relationship with most of its network blogs (though it is true that it doesn’t have exclusive relationships with some of them).

See the table below, which shows the value of various companies in the network area, and the value per visitor, called the “visitor multiple.”Assume Glam raises money at $400-500M level, with monthly global unique visitors (to its network) of 44 million, that would give it a “visitor multiple” of 10 to 12, much lower than the median of 25, or 22 if you factor out the outlier, Facebook. But still, I think this is what Glam would like to argue and the question is whether investors will accept that (i.e., that Glam is a true network, and so should be compared against these other sites).

Finally, we’ve heard that Glam received an offer to be acquired a few weeks ago, in the range of $350 to $500 million by a large media company, but that it decided to go it alone instead.

One reason for the excitement around Glam is its sector’s growth. Women’s sites, along with politics, was the fastest growing audience categories in 2007, according to Comscore. And here Glam has doing better than the norm. Glam grew at 213 percent, while iVillage grew at 27 percent –again, that is, if you include both Glam’s and iVillage’s directly owned sites as well as their ad partner network sites.

Ads work on Google because people are looking for information. They do a search, and if the advertisement shows information that helps with the query, that makes everyone happy. However, when it comes to a social network, usage is quite different. People aren’t looking for information about products — they’re looking to communicate with friends. In that environment, ads are seen as an intrusion — which is the exact opposite of ads in a search world.

[From Techdirt: Surprise, Surprise, Social Networking Ads Suck]

I wrote about this a couple of days ago. We built both OpenSocial and Facebook applications and what we found is that people don’t use them like they do our other client apps. In fact, the conclusion I drew is that people don’t use social networks to consume external content much at all. They don’t search for things either, which means the CPC is almost certain to be a lot lower than search.

TechTraderDaily sums up nicely the financial consequences of lower monetization, higher traffic acquisition costs.

My advice to companies looking at running ads in social networks would be don’t. Focus instead on tactics that do work, like engaging customers/users in discussion groups and interactive widgets that users commit to and then share with friends (at best these are brand extensions as opposed to monetizable ad payloads).

PS- I haven’t logged onto Facebook in at least a month… I still believe it has value but the current state of the art just isn’t creating any value for me as an individual.

I am surprised this didn’t get broader attention, it sounds pretty cool. Basically, as I understand it what this does is enable the creation of semantic data within web pages, blogs posts, or any other kind of content by tagging it as you write it. In much the same way that hyperlinks establish a “relevancy relationship,” this will enable better search relevancy by tagging key words, such as people names.

Something else struck me about this initiative. Reuters has made a significant investment in what we would generally call semantic technologies over the years. Calais is kind of like Amazon Web Services, minus monetization, in that it opens up to external developers the same technologies that Reuters itself is using.

The Calais Web service enables publishers, bloggers and sites of all kinds to automatically metatag the people, places, facts and events in their content to increase its search relevance and accessibility on the Web. It also lets content consumers, such as search engines, news portals, bookmarking services and RSS readers, submit content for automatic semantic metatagging that is performed in well under a second.

[From Reuters Releases Open API for New Calais Web Service: Financial News - Yahoo! Finance]

Yahoo is buying a broadband television distribution company called Maven Networks, for $150 million, according to Techcrunch and for between $160 million and $170 million according to NewTeeVee.

If true, Maven will be a promising new way for Yahoo to sell more online video ads that run on large media companies’ videos.

Maven hosts videos for large media companies, then offers ways to syndicate videos, including video ads, online to other web sites well as high-definition downloads — at a tenth of the cost of rival formats, it claims. There are many such companies, meaning the market was crowded and the company sold for a relatively low amount, as WatchMojo points out.

The Boston-based company’s services are already used by Fox News, Gannett, Hearst, Sony BMG, Univision, TV Guide, The Financial Times and a long list of other big clients. Maven is now another reason for these companies to work with Yahoo for online video distribution, and online video advertising, instead of buying their own technology or working with a rival (such as Google or Microsoft).

Large media companies like Maven’s clients are trying to figure out how to distribute and make money on their large stashes of videos, as their television audiences stagnate. The sentiment in the media industry, as we heard from several executives at yesterday’s OnMediaNYC closing panel, was that they don’t care whether revenue comes from their sales teams or outside parties — outside parties like Yahoo, that has its own ad network. “Do you join [the tech companies] or beat them? Beating them is not an option, ” said Alisa Bowen, SVP at Reuters.

Sample Maven ad-insertion screen below:

 

Meanwhile, Maven is growing at a “breakneck pace quarter to quarter,” co-founder Hilmi Ozguc told NewTeeVee last fall. “Media companies have needs but they don’t have technology experience. It is rocket science, it’s difficult, and that’s what we’re very good at.”

Maven’s content management system was “designed for millions of video assets, millions of video transactions happening simultaneously,” Ozguc told Broadcasting Cable last fall in reference to the company’s deal with Fox. “[Maven] can handle anything from a few sites to hundreds, if not thousands, of sites that are simultaneously pulling video from Fox News, distributing it to a very large audience — both Fox’s own, as well as their affiliates.”

Of course, Yahoo is also a content creator that in some sense competes with these large media companies. “Some of [our media] brands will say “our content is great,” said Caroline Little, CEO and Publisher of The Washington Post and Newsweek Interactive, at the conference yesterday. “And I say, have you looked at Yahoo? It’s pretty good [content] too.” For more VentureBeat coverage of trends online advertising, see Julie Ruvolo’s post from yesterday.

Maven raised a total of $30 million in venture funding, from Accel Partners, General Catalyst, and Prism Ventures.

[Julie Ruvolo contributed reporting to this article.]