CalacanisCast Beta #16 transcript
Special guest: Steven Starr (Revver - CEO/Founder)
Jason and Steven discuss the ins and outs, as well as the past, present, and future of online video.
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CalacanisCast Beta 16
Jason Calacanis:
Okay, welcome everybody to CalicanisCast Beta Number 16, I guess it’s number 16. As you know, we’ve ramped up the production, we’re doing this a little more often. And the format last time, Tyler, went pretty well, huh?
Tyler: I think so.
JC: People, we got pretty great feedback.
T: Fatblogging.
JC: The Fatblogging episode was great. There’s so many people fatblogging now it’s ridiculous.
T: It’s getting more every day.
JC: Every day more people are fatblogging. I got on the scale today, I was 190.2, it’s the lowest I’ve been in like a year, it’s a great feeling. And gosh, that episode went really well. I think people really liked the production value, better microphones, video, lighting.
T: It’s only gonna get better.
JC: It’s only gonna get better here at Project X, as we call it.
T: Right.
JC: As we call it.
T: The House of X.
JC: People are speculating on Project X an awful lot these days.
T: I’ve been hearing things.
JC: Really? Me too. I heard we’re gonna have a street, that we’re getting a street in New York. Did you see that?
JC: I did.
JC: On Valleywag.
T: I did.
JC: We’re gonna have a street. We’re gonna close the street down for concerts. I’ve always wanted to be in the music business. I’ve only wanted to be in the Hollywood business, right? Very interesting. And I think we’re gonna try to get the show going twice a week, I guess, something like that?
T: Two, maybe even three.
JC: Maybe even three. And people seem to like shorter shows. We did like an hour last time, which is ridiculous.
T: Right.
JC: So we’ll try to keep these to thirty minutes. Everybody knows that the show is hosted and sponsored by . . .
T: Podtech.net.
JC: That’s right, Podtech.net where Scoble has his show a bunch of other stuff over there. Good guys, and John Furrier and his team are doing a great job. And Go Daddy, which is great, so when you go sign up for a domain name, you get ten percent off by using the code Jason1. And where I’m waving my pen right now you’re probably gonna put the Jason1 code.
T: Somewhere in that area.
JC: Somewhere in this general area. People are loving that part of the show, when you put things over when I’m talking and all kinds of interesting stuff. So a little departure this week, instead of like talking about the topics of the week and blah, blah, blah, we thought we’d do an interview with somebody, and we got lucky this week, we actually got like a pretty serious guest
T: Who’s on today?
JC: Steven Starr , the CEO of Revver.
Steven Starr: Thanks for having me Jason.
JC: There is Steven right now. And it’s Steven, not Steve.
SS: Whatever you prefer.
JC: Alright, Steve, Steven. And it’s Revver, not Ree-ver?
SS: Yeah, that’s for sure, it’s Revver.
JC: With two “v’s”. And everybody knows Revver, because you guys hosted, used to host I guess Ze Frank, and hosted Ask a Ninja and Lonely Girl, and basically like all the big names are on Revver.
SS: Yeah, they are. We have a modernization engine that allows people to get paid for their creativity and actually allows people to get paid to share. So we’ve attracted what we believe to be the best creators online, and the proof is in the content. We’ve got terrific creators and really a whole lot more than the short list you mentioned. There are literally hundreds of creators doing episodic content online now, and we’re real excited about the future of that.
JC: And now the company, you founded the company back in 2004.
SS: Sure.
JC: And I know Ian Clark, who I knew, I guess we all knew each other from a previous life back in the Digital Coast days and the Silicon Alley Reporter days… Ian used to speak about, what was his thing, “Free Node” or…
SS: Free Net. Ian is the fellow who organized the Free Net project, which was a decentralized networking anonymous Peer–to-Peer network. And back in the day we all met, you, I and Ian, in the Digital Coast as you said, we were developing a content delivery network for creators that was a zero bandwidth solution. Unfortunately when the Peer-to-Peer lawsuits broke, the investors in the venture that we had put together decided that Enterprise Software might be a better place to take the technology. So we ended up in a different business, one that I couldn’t even pronounce let alone get accurate.
JC: Right. Well it’s interesting, because that concept was truly unique in that each of the peers in the network were anonymous… so there was no way to track them…
And Ian Clark’s kind of a brilliant guy for creating that. But a lot of people got dinged, like Travis was doing Scour.
SS: Sure.
JC: Which was probably the most elegant of the Peer-to-Peer clients in terms of design - way ahead of it’s time.
SS: Yeah, great stuff.
JC: Way ahead of it’s time. And everybody just sort of got wiped out in the sort of Napster fallout; it was like the collateral damage, that whole space got knocked out. But you guys all seemed to learn a lot, because everybody is back.
SS: We’re all back, and you know, for different reasons and doing different things. But you know, a lot of learning there, and maybe we’re all solving some new problems now that the bandwidth costs have dropped, and you know, decentralized embed is something that is commonly held now. There’s a lot of progress since those days across the Space.
JC: I mean that was the big problem wasn’t it, back in the day, was that it was just way too expensive to play video across the net, and that’s why Peer-to-Peer had just such amazing renaissance then. And now like you said, nobody really anticipated the precipitous drop in bandwidth costs, which enabled yourself and YouTube to host video for next to nothing.
SS: Yeah. Although it’s going to be interesting to see as the experience moves out of the sort of the small boar viewing screen into full screen where the solutions lie. I think that we’ve all got some challenges in front of us in terms of how to deliver a full blown, you know, TV experience onto your laptop or what have you. And it remains to be seen how expensive that gets and where the resources are to develop it.
JC: That’s true actually, doing, you know, Flash at a lower bit rate and not as fancy. I mean your stuff actually looks very good, You Tube stuff looks terrible most of the time.
SS: We have a pretty High Res.
JC: Yeah.
SS: And we pride ourselves in the good viewer experience. But you know, there are others out there who are doing great stuff too.
JC: Yeah. So was the big lesson I guess the last time around to come up with the revenue model, was that the big take-away?
SS: Yeah, I’d say to come up with a revenue model and to be attentive to the, you know, creators, right? Because I think at least from where we sit here at Revver, we kind of put the creator first. We built a business model that was creator centric and then developed technology against it. So our logic is the people who are drawing the eyeballs, are the ones who deserve to be rewarded, and we’re trying to develop a platform, a modernization platform, that enables that.
JC: Correct me if I’m wrong, the way that manifests itself, the way you’ve made money for people was, you actually signed up content producers and did a post-roll ad, a frame at the end of the video, like you would see on Ze Frank back in the day, or Ask a Ninja currently, where it says like, “Hey”, you know, “Here’s an ad.”, and then they can click that to launch a video.
SS: That is correct.
JC: That’s the format.
SS: And that was the first ad product. We’ll be rolling out a impression-based projects, but we we’re paying on clicks and continue to do so. And you know, if you get a lot of traffic and/or a lot of virality on your piece of content, you can expect to make a little money.
JC: And so how much money do people make on those post-roll . . . I mean pre-roll, video? I remember when I was at AOL, looking at statistics across the market, it was, people were getting $25 CPM’s for pre-rol. Now of course you know that not a hundred percent of people see those pre-rolls, so it’s a pretty expensive piece of inventory. What type of CPM do people get on the post-roll, or is it . . .
SS: Well we actually do it on a per-click basis, so, we’re paying out at about $.50 per click.
JC: Got it.
SS: And in certain cases with premium content the numbers go up. We’d like to get between a $15 and a $25 CPM, and you know, that’s kind of the goal. And it just depends on the content and the interest in that content from the advertisers.
JC: Well if people are spending $.50 per click, and you try to make $15 bucks, you need to get thirty clicks out of a thousand, which means you need to get three percent click-through or something at the end?
SS: That would be a .3 percent click-through. The industry standard is a little below one percent. We average about three percent because it’s in-frame and at the end of the video, so you’re kind of watching a video and then the ad pops up, it’s not as if you’re looking at adjacencies or what have you.
JC: Right, it’s not next to it or whatever. But also you rely on people getting to the end.
SS: We do, and that’s the only way that we, you know, we track people’s actual starts, finishes and view of the ad and then click. And at this point the creator’s getting paid on clicks, but as I said earlier, we’re rolling out impression-based products, we’re even looking at the prospect of sort of sponsored-by type pre-playeds that allow those impressions to be kept as well.
JC: Yeah. And so what do you think about that, you know, the sort of, pre-roll, post-roll . . . I mean obviously from your behavior, you guys are big proponents of post-roll ads. But as people start spending more on production and the value gets higher, I mean people who are watching Ze Frank who are addicted to it, or Ask A Ninja or Lonely Girl, I mean those people would be willing to watch a pre-roll ad in my mind ‘cause they’re addicted to the show.
SS: You know, in my mind I think it will be true for certain content that has proven itself and has value to the, has built an audience and that audience is going to tolerate creative pre-roll. But I would say, from our point of view anyway, you know, we believe that the user experience is what drives, you know, the creator’s building audience in the first place. And if you’re asking somebody to watch a thirty-second pre-role as part of a twenty-second video, and that pre-role is not dynamic and it’s kind of an endless, you know, ad for another box or piece of hardware, it ends up, we believe, diminishing the experience, and the users tend to walk away. And I don’t wanna, you know, name names, but there’s a bunch of sites that still believe in the pre-roll model that I think are a little bit off in their logic.
JC: Hey, you know, I was at AOL and we were a pre-roll central, I mean it was very frustrating for me sometimes to have to sit through that. But you know, when you’re at a big company, you know, you have these big bills to pay and you have . . .
SS: Sure.
JC: Captive audience, so you sort of can dictate a little bit more. But when I did Netscape we built a Flash-video hosting Player and all that kind of jazz. And I think, yeah we looked at it just as marketing. You know, we just said, “Hey, let people come back to the site within, and etc., etc.”
JC: But now you guys hosted the Diet Coke and Mentos’ famous clip, right?
SS: Yeah.
JC: I remember watching that, ‘cause was on the, this is I think one of the first times I became aware of your site, ‘cause I was watching it, and the guys had said in the video or somewhere in their site, like “Please do not upload our video to YouTube or these other services, ‘cause we make no money off of it.” How much of a problem is it, like people having their videos hijacked and then uploaded to non-revenue generating hosting services? Is that a big problem for content creators today?
SS: Well, it’s a big subject, and I think that the subject covers a lot of ground. I don’t think it’s simply a matter of revenue being left on the table. I would put it out sort of this way, that if you’re a creator and you’re posting your content into an environment where you ARE going to get paid, and you feel like you controlled the selection of where that content goes, you’re coming up directly against the logic that says “All content should be free and shared freely among peers.”
JC: Right.
SS: And there is a subset of sites that have leveraged enormous amount of traffic by arbitraging the DMCA in this cases, right?
JC: Yeah.
SS: You just sort of, the content gets published by the user-base, and you know, you have ten days to take it down, and in the takedown scenario, thirty more people publish it, and you generate tons of traffic off those additional thirties. That issue is not going away any time soon. And from where I’m sitting, which is again coming from the point of view of the creator, it seems to me that there is a set of problems there that really do need to be solved.
JC: Yeah, I mean Mark Cuban’s been pointing this out on his blog a lot with the DMCA stuff, like you know, is You Tube and some of these other services really just a common carrier service, or are they really like a content community site? And I think that they’re gonna have to, you know, as much as I, you know, believe in the DMCA and people, you know, users being able to use technologies for illegal purposes and the person who created the technology not being responsible for it, it just seems like in practice, there are gonna be some cases where, like You Tube, in my estimation, and I was brutal on You Tube on my personal blog for a long time, and it’s ironic now that I’m working on Sequoia, one of their investors or their main investor I guess, that I’ve wailed on them so bad and Cuban’s wailed on them so bad. But it is a problem, because, you know, by the time, you’re right, like ten days goes by, the value of the Mentos’ thing may be over in this viral nature of the beast, so . . .
SS: Well let me take it to the next step, because I think there’s a, the broader argument looks something like this. There’s this clarion call for, you know, this level playing field for people to create and build audience and find ways to communicate their creativity, and if I may be so bold, to do more than get recognized for it but to be rewarded.
JC: Right. Crazy concept, people getting paid for work.
SS: Yeah. And then there’s this sort of back-lash against traditional media corporates who have, you know, kind of controlled the gates for many, many years and decades and what have you. So there’s sort of tension saying yes, everybody should have the right to create, the right to publish that creativity, the technology now enables that.
The issue that I believe is really haunting all of us right now is just that we’re in a moment in the sort of history of online video where there’s an art-form that is starting to take shape, and that art-form has to do with story-telling and the way genre and format are being applied here. You look at Lonely Girl 15, and you know, the way the user-base is starting to do response videos and develop, you know, their own way of affecting the plot line, and this collaborative creative environment is very valid and we’re gonna see more and more of that happening. And I guess my concern is that if you do really believe that there’s an art-form here and that this is not just about, you know, a million or two million frat boys throwing up or cats flying from chandeliers, then that art-form has to have a sustainable economy associated with it.
JC: Absolutely.
SS: And the people who really are getting nailed and who are being most, in my opinion anyway, affected by the misuse of the DMCA are those who are really trying to develop their careers as creators, and are trying to, you know, sort of build the tools and the resources necessary to creating. And in that moment, that historical moment where you know, the gate-keepers are no longer in control and there is a level playing field and the tools are out there for people to develop audience and monetize their creativity, if there’s sort of a leaky boat happening where you just can’t create and make money at it because other people are leveraging your creativity to build their value, then that’s just a very significant issue. And I, you know, without specifying, there’s a whole lot of people playing that game right now online.
JC: Oh yes!
SS: And frankly I think the people who are paying the biggest price for that game are the nation of content creators who are very much interested in the sustainable economy and who will drive this into being a true art-form that is, you know, completely differentiated from traditional media content creation.
JC: It’s funny you mention that because today I was trying to link a friend of mine to these very funny parodies, the GI-Joe Public Service Announcements. If you type in . . .
SS: Great stuff.
JC: You’ve seen them, okay. So they’re hysterical. Hey Tyler, maybe we could like pause the video and play one right here or something. I don’t know, could we do that?
T: Yeah.
JC: No, maybe we shouldn’t though, ‘cause we don’t own it. And we could play a thirteen-second or seven-second still frame, something like that.
SS: With a giant frame saying “This is fair use, thank you very much.”
JC: Yeah, exactly. “This is fair use ‘cause we’re not”… Anyway, and I wanted to send that to my brother, saying “Hey, check this out”. And so I did a search for it and I found on Ebaumsworld.
SS: Ebaumsworld.
JC: Ebaumsworld, which like crazy site. All the videos were there, but I was like, I know that Ebaumsworld doesn’t have permission for these. I’m pretty, I shouldn’t say that, I’m fairly certain that Ebaumsworld downloaded these and put them up, or their community did, but that the real guy is somewhere out there who did these, and I gotta link to the real guy and give him credit. Then I just thought, “Wait a second, the real guy only owns like the derivative work of this because it’s actually GI-Joe’s content.” And you know, even like just trying to do the right thing and send this to the right person, I had a hard time, like should I link to the You Tube Director’s page of the guy who made it, or Ebaumsworld or what?
T: Or GI-Joe?
JC: Or should I, yes, GI . . . Should Mattel be getting a spiff on this? It’s so complicated. But you know, it seems like actually the proverbial ___ has hit the fan these days. There’s a lot of lawsuits going on, and you guys are actually in a partnership now with Viacom, correct?
SS: Yeah, we are. I mean as one of the many people we’re working with. Look, on a practical level, the way we look at the problem is we say content should be able to move freely everywhere. I think we all agree on that, and that comes out of the DNA that drove the Ian Clark and I together. And you know, we’ve been thinking about open, freely moving content for a really long time, right?
JC: Right.
SS: So the goal of Revver and the way our technology is constructed is, you know, it’s all... So our attitude is let the content fly, let it go everywhere, let millions of people see it, and let it be monetized everywhere it’s gone. We think that, frankly we think that sort of the problem was solved, and you know, we’re starting to get at the option where it’s really days for us, but we’re starting to get at the option. And you know, it’s our hope that the companies that are, you know, looking to allow their content to move freely will use Revver technology, and as you know, all the young and first-rank creators online are starting to use our stuff.
JC: So do you see yourselves as not necessarily the destination, but the enabling technology for the ad?
SS: Yes. Absolutely. I mean yes, there is sort of a place that people can go to create collections and advertisers to go and develop collections of content they wanna advertise against. But you know, our focus in Revver as an enabling technology more so than it is on the kind of destination play. And while we have a destination play, we don’t want it to be competing with our partners, so we don’t have the broad-scoped kind of community-building tools that are partners would prefer to develop themselves.
JC: Right. So you won’t overly brand, the player, if somebody you like Viacom wanted to have the branding around it and the comments and stuff with that on their site, you’re totally cool with being the delivery and advertising engine for those people, not the destination.
SS: Oh sure. As a white label, you know, with no branding whatsoever, and that’s for, you know, those kinds of guys that who are doing that with, we have a show with Jack Black called “Acceptable TV” that’s launching shortly that . . .
JC: Oh really?
SS: Yeah. That’s part of the VH1/MTV deal that we’re doing . And that allows people to submit creativity onto that show through the website and you know, they’re getting paid as to contents moving virally across the network. So that’s a pretty good example of Revver technology. We also, as I think you know, have deals with Verizon in their, both their, you know, their V-Cast platform and we just announced the fiber-optic, the Vios deal, and we’ll be doing a Surround deal. Our goal is to allow creators use the Revver system to monetize their content across a lot of different platforms.
JC: So the ads can follow the content onto different platforms is basically what you’re saying. So . . .
SS: Well, it’s different for different partners, right? So for example, Verizon, the Vios deal, the fiber optic, is about taking the actual ads that are in the online environment and getting them onto your TV, and that’s an impression-based solution, right? But the D-Cast Tech, that’s a no-ad zone, so we’re getting license fees and splitting that revenue 50/50 with our (inaudible).
JC: And you also have an ad sales business, so you have ad sales people working for you selling ad space?
SS: That is correct. And we work with third party ad sales as well, so if the company we’re partnering with has their own ad team, they can totally go out and sell the inventory and pull an agency commission for doing it.
JC: So it’s interesting, there’s yourselves and I guess BrightCove is also sort of modeling themselves as back-end technology, not a destination and an ad network.
SS: Um-hmm.
JC: So you’re sort of more in that group.
SS: Yeah, I think it’s a different game though, ‘cause they’re in a controlled environment and we’re at a file level.
JC: Explain that to me.
SS: Well I think you have to be living, you know, our content is not just in the Flash, or our technology is not just living in our Flash Player, its’ living on Quick-time files, right? And Quick-Time files can move everywhere, and don’t require to, you know, carry the Player with it.
JC: Oh, so is that the Rev-tag at the end or something like that?
SS: That is correct.
JC: So the Rev-tag is a tag that you guys created that goes at the end of Quick-Time files that will pull the commercial dynamically from your server?
SS: Correct.
JC: So even if I email my friend the Quick-Time file, they’ll get a fresh ad or a new ad if, you know, or perhaps even a targeted ad.
SS: That is correct.
JC: Ah, interesting, interesting. So it’s interesting, it interests me how the space is shaping up, because in the old days you were either an ad network, you were enabling technology, you were a destination, or you were a content producer. It seems like you guys, I’m drawing like the little, what do they call that when you draw like the circle diagram?
SS: The Venn diagram.
JC: I’m drawing the Venn diagram here, and like you guys are part destination, definitely enabling tech, definitely ad network. But now do you actually sign content? Like are you signing the Ask at Ninja’s and those kind of people like a studio might?
SS: No, we don’t, and we’re kind of decidedly not in that direction. We wanna have an open platform, so we allow people to come and go as they please. We don’t believe the exclusivity game, we don’t believe the walled garden game is a great game to play. We think it works in certain sort of very premium content relationships. I’m sure you look back on your AOL days and you know, you know that game.
JC: Yup.
SS: But from our point of view, it’s really as open a system as we can build is the one we want to be offering.
JC: Yeah, so then that means you have another pocket which is the Podshows, the Podtechs and I guess . . . Who are the other content studios? There’s one that John Miller from AOL’s involved with, with the guys from VH1 are doing? Just announced in the New York Times . . .
SS: Jonathan Miller, actually I used to work with Jonathan Miller before EMD. We were also seeing folks like Michael Eisner come out with the Microstudio.
JC: Oh that was today, yeah. Isn’t it funny this whole Microstudio thing? Like remember TheSpot.com in ‘94/’95?
SS: Yes, in fact I was with those guys . . .
JC: American Cybercasting.
SS: Yup.
JC: It was the parent company and they did . . .
SS: Funny stuff, right? It’s all coming back. But I think where we end up with all of this is in sort of the ‘50’s television model, the creator sponsored by a particular sponsor
JC: Yeah.
SS: And you know, I think that’s a great outcome here.
JC: For the content creator to be able to create content without having to answer to the man? I mean you look at somebody like a Ze Frank and an Ask at Ninja, those guys are basically, they’re writing they’re own deal, so “This is what we’re gonna do and this is what you’re gonna pay me.”
SS: And is isn’t that great, right?
JC: I think it’s kind of awesome, yeah.
SS: It’s just outstanding. And I think that, you know, against all of the 30s copyright issues, right? And against all of it we have to kind of look at the way these new and I guess transformative creative works are gonna influence copyright. There are issues here. We work with Creative Comments, right?
JC: Yeah, you guys have the non-commercial license on your stuff, right?
SS: We have non-commercial, non-derivative currently 2.5 license, and that allows the copyright holder, a.k.a. the creator, to opt into a system that has advertising associated with it. They control that file.
JC: Yeah. And so I know you don’t wanna comment on other people’s lawsuits, but you know, the impact of . . .
SS: What are you referring to?
JC: I think there was a $1 billion lawsuit by Viacom. You don’t have to respond to any of this, but I have to bring it up. You didn’t hear this yet, there was a $1 billion lawsuit today that Sumner Redstone and Viacom did against You Tube. I don’t know all the details on it, but obviously he’s firing a canon. And then they also, Viacom invested in Juiced, is that correct, or Juice? What was the name of that company?
SS: Juiced. Unless you’re in the East, and then it’s “Yoo’sd”.
JC: Juiced. So Viacom’s an investor in Juiced I think, or . . .
SS: I don’t know the story there.
T: Or just partners.
JC: Just partners. So they’re partners with them, suing You Tube, and there’s all kinds of other deals going down at the same time. What do you think of Juiced?
SS: I think that it’s very cool. I think that they’re gonna have, I mean I’m real interested, and this gets back to something we discussed earlier. You know, we talk about distributing little bits of data and having to reconfigure on your desktop in the Peer-to-Peer model against, you know, Rich Media.
JC: Yeah.
SS: That was seven years ago a dream for all of us, right?
JC: Right.
SS: So you know, we talk about the capacity of the Internet itself and then we talk about delivering a closed Peer-t- Peer network, you know. There are going to be impacts there. And I think if Juiced is wildly successful I think it’s also going to have a wild impact on usage.
JC: Yeah. And have you used the product, or . . . I haven’t actually used it.
SS: It’s actually pretty cool. I have an amount of respect for these guys.
JC: Coming from the Peer-to-Peer stuff, I would think so. And it seems to be pretty stable, but they’re licensing content, so they’re kind of being a studio and a technology platform at once.
SS: Yeah, apparently they have something like three thousand hours so far. Expect there to be, I’m sure there’ll be a cavalcade of cool stuff on that network. And you know, that’s a client model, right? You have to download the client and live inside their environment.
JC: Yeah, interesting, interesting stuff. I wonder what the, so what is the ramification for your business of major content holderx suing people to take their stuff down, is that a net positive for you guys or a negative?
SS: You know, it’s complicated, because on the one hand I’m real interested in content moving freely across the network, on the other hand, I’m real interested in making sure that they creators aren’t getting paid by, aren’t getting defeated by the inadequacies of the DMCA, which has let’s just say both its good and bad things associated with it. So you know, as these questions are coming up around the application of the law as it’s currently written to creator content as it’s being aggregated online, you know, those decisions, the question needs to be raised is really my point, the issues need to be worked out. They are not black and white, these are really kind of, lots of grays across the spectrum here. But I would like to see creators have a better sense of how they control their content online. And unfortunately in today’s environment, the only people with the pockets big enough to raise those questions are people that handle countersuits and the like.
JC: Yeah, against Google, which is a big, big, big . . . It seems Google is more than willing to fight long legal battles.
SS: Sure.
JC: So I guess a net positive for you guys in that if people are enforcing their copyright, then solutions that are copyright friendly and creator friendly are what you provide, it’s gonna be a net positive for you guys.
SS: I would say it differently, which is that if copyright law is broken, it would be good to see it fixed.
JC: Right. So what is the story with you guys on a corporate level, because I, you know, not that I trust Valleywag or a lot of these other publications, but it seems like people are beating up on you guys a little bit. And I know that . . .
SS: Oh, you know, here’s what happened. We did a corporate re-org, we went from having a sort of start-up to a business, we brought in a bunch of people, a couple of people left. And you know, we are in a fishbowl, in the 2.0 fishbowl if you will. And a lot of people saw Revver as leading a charge, and we came out with some, let’s just say management changes, and people raised a lot of questions. Our heads are down, our technology is rocking out, we are moving forward on a lot of fronts. I . . .
JC: And you raised a bunch of cash, so you guys must be in a decent position.
SS: We raised a bunch of money. We’re doing fine. And the part of the process which has us getting questioned and all of that, it’s just part of the process.
JC: It’s interesting as a fellow entrepreneur, like you make a hard decision that’s good for your business, like you re-org, you know, some management left, you know, you take some medicine, maybe you lay off some people because you wanna focus on another area or whatever. And then like some of this press just ding you for that, thinking it’s a sign of weakness, when in fact, it sounds to me like this might be a sign of strength that you guys are getting more focused.
SS: We are getting more focused, and I see the press as, you know, being in a curious process around every detail of this space. And since we’ve been, you know, pioneers in certain areas of the space, it doesn’t surprise me that people question and concern themselves with what we do in terms of our management decisions, and you know what, it’s all part of the game.
JC: Yeah, you don’t seem too phased by it, so that to me says you’re probably doing pretty good.
SS: Yeah, we’re doing great. We have a lot of cool stuff coming up, a lot to be proud of. And on a day-to-day basis, you know, we’re up and to the right in every category.
JC: So the morning you wake up and hear that You Tube got bought for $1.26 billion, what goes through your head?
SS: I was amazed! I mean I have to say it was like they have just re-set the clock on this entire space, everything’s become more urgent, everything’s become, whatever comfort we had and whatever sense of “Well, we’ll figure this out as we go.”, turned into just a very nuts and bolts hard look at the culture of a space that’s gonna become very professional overnight.
JC: It’s pretty amazing.
SS: There was a whole lot of people caught off-guard by that. And it remains to be seen the extent to which the fallout from that is good for the space or bad. Nothing has been finalized here, and as they say, I don’t think we’re at the bottom of the 7th inning, I think we’re at the top of the 2nd.
JC: Yeah, I have to say there’s a long way to go. Obviously revenue hasn’t really established itself in the space as much as, you know, users and their attention as well as investment has. So and that’s typically how it goes, right? Users give something attention, investors give it attention, and then hopefully sponsors and revenue comes in.
SS: Yeah, I don’t think anybody’s making a killing in this space in terms of revenue yet. I think in over the next eighteen to twenty-four months you’ll see a real upsurge in revenue and it’ll validate a lot of ideas that we and other have about how this space moves forward. Again, getting creators paid and you know, just to get back to the point I was making earlier, allowing this art-form to evolve, allowing the creators who are on the edges of pushing this forward, the Vanguard if you will, those guys definitely need sustainable economy to move us all forward. And if that’s worked out and that problems is solved, then we have some really exciting news to look forward too, online video, it’s gonna take us places we’ve never been before in terms of creativity and we’re all real excited about that.
JC: Okay. Just a final question that you can ignore and deny . . . Microsoft, what’s the story, are they gonna buy you guys?
SS: There isn’t a company that we have a meeting with that doesn’t say to us, “So, are you for sale?” It just, part of being in a heated space is to have those conversations. It is, we will you know, partner with, merge, sell, go public, at the right moment. That is not today.
JC: Yeah. I can tell from your voice, you’re in bell-mode, you got your head down, you probably have some decent amount of cash still left in the bank.
SS: We sure do.
JC: And you know, you probably have interest from a gazillion VC’s, ‘cause so many people missed the boat on, you know, I guess You Tube, and also on Jeremy Allaire’s company, that there’s just probably, at Brightcove. It’s just . . .
SS: Well let’s just say that there’s a lot of resource out there should we care to explore it. Right now we don’t need it, we’ve got what we need in the bank.
JC: So we shouldn’t expect to see an announcement for a third round like next week?
SS: No, not this week.
JC: Alright, well listen, I’m really happy that you came on the show. I thank you for being so honest. I mean it’s great, isn’t it great, Tyler, when an entrepreneur is just honest and upfront like Steven was on the show? I mean . . .
T: I think people learn a lot and react well to it.
JC: Yeah, I learned a lot on the phone. And it’s also good for you Steven like to, I think own your own message. Like there’s a sort of misinformation on Valleywag like you guys are in the dead pool and stuff, I didn’t buy that, because I know like when a company raises that much money, they’re not blowing through it immediately. They’ve got dry powder and they’re probably on a good pace.
SS: Well look, Valleywag is doing it’s job and we’re doing ours.
JC: In other words, Valleywag is hating and they should be congratulating, as we say. Alright Steven, thanks for being on the show.
SS: It’s a pleasure, thanks.
JC: Hey, I’m in Santa Monica, let’s grab lunch sometime.
SS: I look forward to that.
JC: Alright man, be cool.
SS: Okay, take care.
JC: Cheers now! Bye.