Time To Get Paid
By Charlie | May 24th, 2007 in News |
The likes of MySpace have been making huge sums of money from advertisements on user profile pages and offering nothing back to the people that have make the social networking giant what it is. This could be soon about to change in light of a new announcement by Reverbnation.
Reverbnation is a music discovery, band promotion, gig announcement site. It announced last week that from July this year it would give half the revenue raised from adverts displayed on an artist’s profile page back to the artist. So, the more popular you get the more revenue you make – without selling any music. A curious concept for sure. Obviously the actual money you could earn is minimal but it represents a significant step forward in the mindset of these user-generated websites that have made piles of cash out of their users.
Once one company announces a fair-play scheme like this, how can the others not follow suit?
The answer, of course, is that they will have to follow suit once we become a significant business model. The idea is simple - artists provide the content needed to drive the population of sites like ours. If we live off that population, than what answer do we have when an artist says “How much of the value of the site do we get for participating?” The only answer is that we share it with the artist. Period. How much money did you get when MySpace sold for $580MM? None. That is no longer the right model. They leveraged the value created by the artists for their own benefit. I’m not saying that MySpace was wrong to do that. That’s what the market would bear. But we are doing all sorts of things to disrupt the current balance of power going forward. We say that the artist’s content is the reason for success of sites like ours. As such, the artist should participate in the upside. Nothing more and nothing less. At ReverbNation, we provide tools that make your MySpace page more valuable to you - including tools that let you gather fan email addresses from anywhere on the web. But when your activity as an artist also benefits ReverbNation, we share that benefit with you.
Thanks for noticing. I hope that artists will flock to a new model and begin taking care of their financial futures by tapping into the value they create for every social network. Hopefully, we can make a difference.
-Jed (a ReverbNation founder)