San Francisco-based online video startup and prime-YouTube competitor VideoEgg launched the Eggnetwork at MIXX today in New York. Eggnetwork is an ad network for highly-trafficked social networks (currently including Six Apart, AOL Video, Bebo, Dogster, Hi5 and Tagged) which will monetize and serve advertising to their video sections. This is in part a change of focus for the company, and with the YouTube-inflated state of this space, a good one too – much needed if they’re to survive longer than the next couple of years.
So far Revver has been one of the only startups in the space which has focused on the financial monetizing aspect, and I think after the great craze and phenomenon this industry is going through (the Lonelygirl15 series comes to mind) there’s going to be a boom financially – the people are here, but the money is still to be made.
Something interesting I find about this deal is that VideoEgg won’t be the content-deliverer itself (they’ll use Akamai), but indeed a middle-man. If they wanted, I’m pretty sure the networks could carry out all this themselves, which they might in the future, but for now I think their strategy lies in seeing whether there is money to be made in this, and if so, whether it would be liable and practical for them to do it independently.
Another interesting point in this is that VideoEgg promises to have a real person review the video before it is paired for an ad, so advertisers only see themselves on proper, real user-generated content rather than a Shakira video taped off MTV. Speaking of user-generated content, this brings up another aspect. While researching for this post on an ever-slow wifi signal, I couldn’t find out who the real money-maker in this deal is. Is it the social networks? Is it the users who generate the content, the content-creators? Or is it that both split the money, in which case it will be interesting to find out how much this split equates to and how much VideoEgg themselves keep.
[tags]Social Networks, Online Video, Advertising, VideoEgg[/tags]