Monetizing user-generated content is going to be big this year. Video hosting site Revver has been doing it since its inception with its 50/50 model, but what if you could get more than that? Lulu TV, which launched late last year, is promising to give its video-sharing users 80 percent of the revenue generated from all site traffic. There's just one catch--you have to pay $15 per month to throw your hat in the sharing pool.
The economics for the shareholder subscription are far from simple. Joining the site as a shareholder, it's in your best interest to put up content that will generate traffic. Each month the usage numbers are tallied, and you are paid in percentage for your contribution to the total traffic of the site. But you're still not getting 100 percent of what you could be if you shared the file on your own. Lulu TV is still taking 20 percent, so why does Lulu TV need that $15?
The free level of Lulu TV membership comes with size limitations for your videos (100MB compared to 200MB for shareholders) and a 30-second cap on video blogs. Also, there's no revenue sharing whatsoever; so even if your video gets 400,000 views in a week, there's no way to retroactively get your share.
Another site that has brings revenue sharing with a fee is Sellaband, a site that lets music artists and fans work together to take a band from the garage to the stage. The difference is that Sellaband makes it free for the content providers to put their work up and reap the rewards. The users are the ones that put their stake in the band and can benefit from its potential success.
The 80/20 model is great, but there's still a great deal of risk involved in becoming a shareholder at LuluTV. Fifteen dollars per month is a lot of money, and unless you're seeing twice that coming back, you're probably better off paying for hosting and putting up content on your own Web site, then promoting it using YouTube.