Competition forcing YouTube to pay

The internet's booming social-networking trend has reached a new milestone: websites are beginning to pay for content.

That means all those web-savvy creative types, the people who post skateboarding videos or write a review about the neighbourhood dry cleaner, could be compensated for their contributions.

The move to pay people for content had been developing slowly but reached a critical new phase when YouTube.com, the internet's bellwether video site, confirmed that it has plans to pay for user-generated content.

The decision sets up the potential for a monumental shift in how people use and view networking sites.

Until now, as user-generated content on the web has grown, the only people making any money have been the site operators.

YouTube, for instance, rose to prominence thanks largely to the goofy homemade videos ordinary people created and posted.

But when Google purchased it last year for $US1.65 billion ($A2.1 billion), the people responsible for those videos didn't receive a single cent from the mammoth Google payout.

Paying individual users for content also follows deals that Google, Yahoo Inc. and Apple Inc., among others, have been signing with networks and Hollywood studios for the right to sell and promote original content on the web.

YouTube didn't provide details of why it wanted to start compensating individual creators.

But a number of industry executives suggested that with both the internet audience and ad revenue growing, competition for the best user-generated content also is intensifying.

So those looking for an edge have started offering money.

By the end of this year, "almost every big site that focuses on viral video will have a revenue-sharing component to it," said Keith Richman, chief executive of Break.com, a site that pays $US400 ($A508.36) to $US2,000 ($A2, 541.78) to contributors about 100 times a month for the exclusive rights to some videos.

Spymac.com is paying between $US3,000 ($A3,812.67) to $US5,000 ($A6,354.45) a day to pools of people who create videos or other original materials, while Revver.com is sharing revenue from advertisements placed at the end of videos.

If viewers click on the ad, the video's creator gets paid.

YouTube co-founder Chad Hurley disclosed the site's intentions over the weekend at an economic summit in Davos, Switzerland.

"We are getting an audience large enough where we have an opportunity to support creativity, to foster creativity through sharing revenue with our users," Hurley said.

"So in the coming months we are going to be opening that up."

Hurley didn't indicate how YouTube would pay for content, but there is more than one way to share the wealth.

While some sites might be willing to pay for exclusive content, the culture and technology of the web is such that viewers want to share cool videos with friends.

That means that a video first appearing on YouTube will quickly get passed around, ending up on countless blogs or profile pages at MySpace.com.

Sites like Revver.com and Spymac.com hope to tap into the "viral" nature of video sharing and still pay the content creators.

At Spymac.com, creators will get paid no matter where the video is viewed, as long as it was first uploaded to Spymac.

"The more you promote your upload, and it becomes very popular, the more money you make," said Kevin April, Spymac's chief technology officer.

Creators are "encouraged to market their own videos," he said.

At Revver.com, ads are embedded into the end of a video. If a viewer clicks on the ad, the content creator is paid. Any revenue an ad generates is split 50-50 between Revver and the video's creator.

Money isn't the only attraction for content generators, however. Some people have done quite well by YouTube without it.

Actor Liam Sullivan's Shoes video on YouTube has been viewed more than 12 million times. The exposure given to his Kelly character, who sings the rebellious teenage ode to Shoes, has made him a sensation.

The exposure has led to a deal with Apple, where Shoes is among the Top 10 comedy singles at the iTunes music store.

He said he also will be part of an ensemble cast for a series launching on cable's VH1.

In Davos, Hurley discussed the strategy shift.

He said YouTube initially "didn't want to build a system that was motivated by monetary reward".

"We wanted to build a true community around video," he said.

"When you start out with giving money to people from day one, the people you do attract will just switch to the next provider."

His comments are posted on YouTube.

At Viewpoints.com, Matt Moog hopes his site will become a home for reviewers who already are respected on the web.

Those people will be compensated for their reviews, but the majority will not be paid.

"The non-paid reviewers will come to the site and create reviews because they enjoy the recognition, they want to be a part of the conversation," he said.

Chicagoan Brian Thomas, one of Viewpoint's few paid reviewers, appreciates being part of the conversation, but that only goes so far.

"If talent can get recognised and rewarded, I think it's great," Thomas said.

"But I'm not doing this for free."

MCT