Sunday, January 18, 2009

MIDEM 2009: Share in the profits

Every new development online tends to spawn a start-up which pledges to do the same sort of thing as everyone else, but to reward its users with "a share of the revenue". There were even companies which were going to share revenue with people simply for reading their email at one point.

Strangely, I can't think of a single instance of one of these start-ups turning into major players. Perhaps because they rely on advertising, and to make money from online ads, you need scale. If a user is getting a portion of the ad revenue from their limited range of online activities, then you're talking about very small sums indeed. And would you really choose to abandon, say, Hotmail or YouTube or MySpace in order to make a few cents a week?

Still, it's a business model that keeps being resurrected, and the latest outfit trying to buy users with a slice of ad money is at Midem. They're called Snowfish, and hope to attract a social networking audience with quarters and dimes:

“We don’t want to repeat what today’s social communities are already doing,” says CEO Ludvig Werner. “The launch of Snowfish will put the consumer in control. All of a sudden, everything has value!”

The company says it has a number of advertising deals in place, and will pay out users’ revenue share via PayPal on a monthly basis.

You have to wish them luck, but I suspect this is one of those ideas that won't shake the internet to its fundamentals.