Lulu.tv made recent news with their new video sharing service which has a unique business model. Bob Young the head of Lulu.tv and founder of the self publishing service Lulu.com also founded Red Hat, which commercially sells open source software. He has been doing interesting experiments in creating business that harness the creative efforts of people.
The new revenue sharing strategy behind Lulu.tv is fairly simple. Anyone can post or view content for free, as with Google Video or YouTube. However, it offers a “pro” version, which charges users to post video. 80% of the fees paid by goes to an account and the money is distributed each month based on the number of unique downloads to subscribing members.
This strategy has a similar tone to the ideas of Terry Fisher who has been promoting and the related idea of an alternative media cooperative model. In Fisher’s model, viewers (rather than the content creators) pay a media fee to view content and the collected revenues are redistributed to the creators in the cooperative. Lulu.tv makes logical adjustments to the Fisher model because other video sharing services are already offering their content for free. Because there are a lot more viewers of these sites than posters, the potential revenue has limited growth. However, I can imagine if the economic incentive becomes great enough, then the best content could gravitate to Lulu.tv and they could potentially charge viewers for that content. Alternatively, revenue from paid advertising could be added the pool of funds for “pro” users.
Introducing money into environments also produces friction and video sharing will be no different. Moving content from a free service to a pay service will increase copyright concerns, which have yet to be discussed. People tend to post “other people’s content” on YouTube and GoogleVideo, which often contains copyrighted material. For example, Hey Ya, Charlie Brown scores a Charlie Brown Christmas Special with Outkast’s hit single. It is not clear if this video was posted by a pro user, or who made the video and if any rights were cleared. Although, for instance, YouTube takes down content when asked to by copyright holders, many holders do not complain because that media (for instance 80s music videos) have limited or no replay value. With video remixes, creators have traditionally given away their work and allow it to be shared because there was no or little earning potential for the remixes. However with Lulu.tv’s model, this media is suddenly able to generate money. Remixers who have traditionally allows the viral distribution of their work, now they have an economic incentive to host their content in one specific location and hence control the distrbution of the work (sound familiar?)
I’m quite glad that Lulu.tv is experimenting in this vein. If it succeeds, the end effect will push the once fringe media and distribution even deeper into the mainstream. For people concerned with overreaching copyright protection, this could be also be disastrous depending on how we as a culture decide to accept it. The copyright holders could use Lulu.tv has a further argument for yet stronger protections to intellectual property. On the other hand, it could mainstream the idea that remixing is a transformative use. The tensions between media producers, copyright holders, distributors and viewers continue to be evolve and are important to document and note as they move forward.