Posts Tagged ‘Online Video Monetization’

In this linked video, F3 Technologies, Inc.’s officers give a range of updates on F3 the company, on its individual software platforms — including expanded revenue models — and even on a new product that we aim to roll out in the next few months, Website Tournament. We look forward to posting more videos like these occasionally. Please feel free to share them via e-mail, social media such as Twitter and Facebook, and especially via your own channel on FargoTube.

It was a big week in the world of online video, particularly among the biggest players. Amazon began posting information on new features it’s planning to add to its video-on-demand service, including a subscription plan. Netflix said it’s planning new features in conjunction with Facebook. And Hulu, a studio-backed site offering a limited range of television shows free of charge, said nearly 1 million people had registered for its relatively new subscription service.

All of this strikes me as clear evidence that more people are spending more and more time watching videos online, and want to integrate this viewing into the rest of their daily routines, which also include more time spent online.

It also reinforces our confidence that our FargoTube online video/music platform will continue to grow and thrive because FargoTube is an online video provider like these large media companies. FargoTube has an especially promising future because of its more extensive interactivity, which is aimed at independent musicians, video producers and their fans.

For me, the week’s most interesting piece of news was from NetFlix. The company, which dominates the U.S. DVD-by-mail market and has become one of the nation’s largest services for streaming Hollywood movies, hasn’t given much detail about the integration with Facebook, but I’m guessing it includes the ability to post movie ratings and comments to users’ Facebook pages, which NetFlix dialed back and then eliminated last year. It was a great feature and I hope it comes back, although it didn’t give users special access to artists the way FargoTube does.

A common thread in the news about these large online media services since last year is that they seem to be moving more and more aggressively onto each others’ turf. That makes me wonder whether any one of them will maintain the uniqueness it needs to retain customers, or whether price competition might hurt one or more of them.

In contrast, FargoTube’s unique format, the social networks centered on its entertainment content – and the resulting digital marketplace experience – are features that aren’t available anywhere else. As using the Internet and enjoying entertainment media become more and more synonymous, FargoTube is right at the intersection of creativity, commerce and fun.

Sony’s jump into cloud-based music has created quite a lot of buzz in the past week. Its new Music Unlimited service has launched in the UK and a half-dozen other European countries; Sony plans to launch it in the U.S. in 2011.

It includes music from Sony/BMG and at least three other major record labels, which I believe makes it the largest service to challenge Apple’s iTunes. But the concept appears to be more similar to Pandora. It selects songs for an individual user based on feedback that user has given in the past, presumably in multiple channels created by that user.

What strikes me about iTunes and Music Unlimited is that our FargoTube service is like a blend of the two, albeit for now on a smaller scale, and with a couple of unique features of its own. (All three offer both music and videos).

The most basic difference between Sony’s and Apple’s services is that Music Unlimited streams its content, while iTunes’ content is available for download. Various tech bloggers have cast Sony’s challenge as a bet that the streaming format will eventually beat out the download format, in which listeners own the tracks they select.

FargoTube, in contrast to both of those services, lets independent artists offer their entertainment in either or both formats. In most cases, FargoTube users therefore can determine the format that best suits their viewing/listening preferences. All of this ensures that all artists’ presence on FargoTube will remain strong even if one format wanes in the film or music industry as a whole.

The early (and perhaps premature) verdict on Music Unlimited seems to be that it won’t displace iTunes. Readers at Engadget were particularly harsh on Sony.

The good news for FargoTube is that major players in the industry are not only beginning to accept that streaming and subscription services are viable, but they are now implementing solutions in the market. FargoTube is positioned to help independent artists jump on the bandwagon!


Just following up on yesterday’s press release about hip-hop choreographer and dance instructor Kelly Peters, who recently signed on to use FargoTube to sell his videos and stay in touch with fans.

Kelly’s been in the business for a while, and his first instructional video, “Make it Happen,” has sold more than 15,000 copies. It has been among’s 10 best-selling “dance and DJ” videos for most of the last couple of weeks (fifth when I wrote the press release, #4 last night, and now #8). Kelly’s working on several new videos that will probably be comparable in length to his first one, about an hour.

For us at F3, and probably for Kelly himself, the coolest thing is that FargoTube enables him to start making money on different kinds of videos. He’s been interviewing innovators and stars in various fields of dance — including Rhapsody, Luam and Mr. Wiggles — and offering the interviews free of charge as downloadable podcasts. He recently interviewed an early pioneer of one hip-hop subgenre — I’m dying to tell you who it is, but can’t until it’s uploaded. That’s one of the first videos he plans to upload to his tube, some time in the next few days.

Yesterday’s New York Times Magazine had a fascinating, fascinating article about performance rights organizations, which enforce music copyrights.

The article followed Devon Baker, a field agent for BMI, one of the three largest PROs in the United States, as she trekked across the Arizona desert in an effort to wring a few hundred dollars a year from bar after cafe after strip club. I guess you could call her a soldier in the ground war over intellectual property.

Up until yesterday, I had never wondered how many proprietors are out there buying CDs for $9.95 from Amazon and then playing them while selling $2.95 bottles of Bud Light, but I’ll bet it’s a lot, and BMI’s agents are apparently trying to find and charge all of them. It looks like an awfully tough slog.

BMI (Broadcast Music, Inc.) is organized like a nonprofit, and a representative told the magazine that it gives musicians and record labels 89 percent of the fees it collects on their behalf, after subtracting 11 percent for its own costs, including the salaries of Baker and other field agents. BMI employs several hundred agents like her and claims about $1 billion in royalty revenue each year, according to the article. I’m guessing that the other two majors, ASCAP and SESAC, are comparable in size. (The two names are acronyms for the American Society of Composers, Authors and Publishers and the Society of European Stage Authors and Composers, but all three organizations are equally focused on U.S. copyright law).

We at F3 Technologies have been looking at PROs because their mission is complementary and so similar to that of our FargoTube video and entertainment service: helping artists and content owners to regain control over their creations.

There are differences, of course: Whereas Devon Baker begins collecting revenue from heretofore illegal use, FargoTube is a completely new type of platform that can bring new fans to content owners while allowing artists to connect with existing fans more richly.

By “richly,” I mean more profitably, but also through richer content: FargoTube accommodates music, high-definition still images and videos, including exclusive interviews, short video messages, music videos, and movie-length features. And FargoTube is built like a social network, so fans of a particular artist can interact with each other, share videos subject to the artist’s approval, and get information about upcoming tours.

My favorite difference between PROs and FargoTube: F3 employees don’t have to negotiate with screaming bar owners in dusty parking lots.

“There ain’t no such thing as a free lunch” was the first thing I learned in economics class my senior year of high school. I think Mr. Ravenscroft even had “TANSTAAFL” written on the dry-erase board when we were walking in on the first day of the semester.

TANSTAAFL is perhaps the core principle of economics: Anything with value also has a cost to produce, and nobody — a business, especially — gives away anything of value unless they receive something of equal or greater value as a result.

It’s also a core principle for F3 Technologies’s FargoTube online platform: Musicians, filmmakers and other artists are sick of toiling in the dark for years, only to see their creations pirated and posted on websites that don’t share revenue with them. Many artists play along by posting limited content on “free” websites but have grown frustrated that these sites don’t translate into profit. In contrast, FargoTube lets fans subscribe to an artist’s videos and other entertainment and splits the fees with the artist.

One of the most alarming illustrations of TANSTAAFL is unfolding this week in the pages of the Wall Street Journal, which has been running a fascinating series about marketers’ collection and use of personal data. The series started with an article last weekend about increasingly sophisticated cookies, beacons and other tracking programs installed on our computers when we visit “free” websites and that continue to track us even after we browse along to other websites. Most of us are aware to some degree that this has been happening, but not to the extent reported in the Journal. Several popular “free” websites — including (click at your own risk) install hundreds of trackers on visitors’ computers, and the 50 sites most visited from the US installed an average of 64 such trackers in the Journal study. Some of the trackers help create a profile for each internet-protocol address, which marketers assume to represent an individual user.

From an article that ran July 31:

“Hidden inside Ashley Hayes-Beaty’s computer, a tiny file helps gather personal details about her, all to be put up for sale for a tenth of a penny. The file consists of a single code— 4c812db292272995e5416a323e79bd37—that secretly identifies her as a 26-year-old female in Nashville, Tenn. The code knows that her favorite movies include ‘The Princess Bride,’ ’50 First Dates’ and ’10 Things I Hate About You.’ It knows she enjoys the ‘Sex and the City’ series. It knows she browses entertainment news and likes to take quizzes…

Lotame Solutions Inc. … packages that data into profiles about individuals, without determining a person’s name, and sells the profiles to companies seeking customers. Ms. Hayes-Beaty’s tastes can be sold wholesale (a batch of movie lovers is $1 per thousand) or customized (26-year-old Southern fans of ’50 First Dates’). ‘We can segment it all the way down to one person,’ says Eric Porres, Lotame’s chief marketing officer.”

A Journal article this week called the phenomenon “anonymity in name only.”

I’m not prepared to say that this use of personal data is a bad thing on balance and I can’t quite put my finger on why it feels creepy. Nonetheless, I know that a lot of people do find it creepy, and I understand why a lot people want stricter legal protections for their personal data.

Regardless, I think internet users are going to recoil from it and limit their use of websites that don’t guarantee at least a minimum standard of privacy.

In contrast to most video-centric sites, FargoTube users know upfront what they’re going to pay on a monthly or per-video basis. FargoTube and its revenue partners, the content owners, don’t sell personal data to outside marketers, and content owners can choose to offer limited advertising or no advertising at all.

One of the web’s most popular sites for video,, moved away from its all-free model a couple of weeks ago. A new service it’s calling “Hulu Plus” offers an expanded range of television shows to users who subscribe for $9.99 a month. Following the launch of Hulu Plus in June, CBS, the only major broadcasting network that isn’t already affiliated with Hulu, is talking about playing ball.

We think “Plus” validates FargoTube’s business model and will probably show that people are happy to pay for content when they can’t get it anywhere else or when it’s delivered in a unique setting such as FargoTube, which combines video with social networking and other features that fans find useful.

News Corp., which owns the Wall Street Journal and a 30 percent stake in Hulu, has been at the forefront of media industries’ moves to charge for content. The Journal, for example, allows free access only to articles deemed to have significant public service value, like the current series on privacy.

“The argument that information wants to be free is only said by those who want it for free,” News Corp. CEO and Chairman Rupert Murdoch said several days ago. And even they may stop saying it, once they find out what their money can buy.

This post has been updated to include information about Hulu’s ownership, CBS-Hulu discussions and the Wall Street Journal’s revenue model.

Our developers are making the last few tweaks to FargoTube Version 2.2 in time for an updated version to go live next week. The update will include several significant usability enhancements and a couple of major new features. We’ll also be launching a broader online advertising and marketing campaign, for example through Google, MySpace and Facebook, once the update is available at  This will be our first time marketing the FargoTube platform on a mass scale.  Accordingly, we expect an influx of digital content added in coming weeks and months.

An especially important update is the new technology that F3 developed to prevent illegal copying of videos that content owners upload to FargoTube. Most streaming videos on the internet can be easily downloaded as digital files, through third-party capture programs such as RealPlayer with a plug-in. FargoTube prevents such copying, in keeping with our mission of putting creators back in control of their works. “The content owners and artists can rest, knowing their content is secure,” CEO Frank Connor said.

The owners of “tubes” — the social networks built around video and other entertainment — will still be able to offer their videos and other media in the form of downloadable files. We plan to make them able to prevent illegal sharing of those files by the end of the year. We expect this protection to be crucial for attracting new partners because fear of copyright infringement has kept many content owners from fully embracing the Internet.

As we’ve promised in a couple of recent press releases and blog posts, artists will now be able to upload music files and high resolution still photos to their tubes, and offer that content free or for a charge. Music will be streamed in mp4 format and offered for download in the mp3 and mp4 formats that are compatible with the vast majority of digital music players. We believe FargoTube’s music capability will complement the core video service and allow it to compete more effectively against the likes of iTunes and MySpace Music

Here’s a screen shot of the new page from our staging server: 

The music files are especially important for FargoTube as our sales team continues to make inroads in “Music City USA” — Nashville. FargoTube recently signed its first major partner, Strange Celebrity Entertainment, LLC, a country music label (Click here for more information on our sales trip to Nashville this week).

The other major feature to debut next week is FargoTube’s fourth revenue model, the “Contributor Tube,” which is aimed partly at film and art schools. This model allows instructors to sign up their students for the tube, where they can upload films, graphic designs, photos and other artwork. Students will typically pay for this access along with their tuition. In turn, they’ll be able to promote and sell their creations from the tube, much as other content owners sell their videos and video access through FargoTube.

Other new features include:

  • buttons that allow users to post their favorite videos to their Facebook pages and Twitter accounts. We expect this to make FargoTube more fun for users and to introduce FargoTube to potential new user;
  • as many as 20 new themes that owners can use to customize their tubes;
  • a categorization system for tubes. Though a substantial number of FargoTube users will come to the service as fans of a particular video instructor, musician, or other entertainer, the categories will help both new and existing FargoTube users to find their favorite content on our site.
  • Tube owners can now categorize their content — their music, for example, by artist and album.
  • Tube owners can manage multiple tubes more easily, thanks to new buttons that let them click from one tube directly to another
  • F3′s sales team is back from a productive trip to Music City USA and preparing for yet another Nashville trip, its fourth in two months.

    Wednesday, Thursday and Friday were busy for Paul Campbell, our chief operating officer; and Stephanie Miller, our SVP of business development. They met with a talent-management agency, a public-relations firm, a large music-licensing firm, and a couple of country musicians who have become television stars.

    We expect some of these meetings to have indirect but very important results for our FargoTube entertainment service. The licensing agency, essentially a group of sleuths that track down unlicensed use of songs, could eventually give FargoTube enormous credibility as a force for the rights of musicians and other content owners, who are trying to break their addiction to free online distribution.

    “A lot of things we’re doing are not just short-term,” Paul said. “They’re things we’re doing to ensure that the site has longevity. Everything we do as a company is about getting to the point where we have sustainability.”

    With some of the other meetings, the goal is a partnership where the content owner makes FargoTube a key part of distribution strategy. After signing Strange Celebrity Entertainment, LLC, and its country musicians last month, we’re aiming for a second major content partner. We expect that to happen soon because we’ve drawn a lot of interest from a lot of different content owners, who range from Nashville musicians to producers of instructional videos.

    The sales process is a bit like planting a tree and waiting for it to bear fruit, even for the discussions with content partners and potential content partners. For one thing, FargoTube is pioneering a new business model that content owners are only beginning to understand. Artists have been using their online presence mainly to promote their concert tours and sales of physical albums, and the costs of such promotion are often larger than the revenue they generate. And while free music videos have helped generate advertising revenue and have probably aided in the sales of digitial music files through third-party websites such as iTunes, those two sources have replaced only a fraction of the loss from declining CD sales. In short, online distribution hasn’t been a smashing success, so content owners are having to become more judicious in how they fit the internet into their business models. F3 Technologies is working with them to ensure that FargoTube is the online source of the future.

    Hulu LLC announced the imminent launch of a subscriber version earlier this month and has started accepting requests for a preview version of the service, Hulu Plus. “Plus” is a $10/month service that adds older television content to the new episodes already available at The large television conglomerates that co-own Hulu have hinted at such a move since October, without giving a specific timetable for its launch.

    We at F3 Technologies see Hulu’s move as confirmation of the general viability of fee-based online video, including our own FargoTube platform. Americans are spending more and more of their time on the internet, and content owners should treat the internet as a source of revenue to take the place of dwindling television viewership and album sales. Hulu, YouTube, musicians, newspapers and countless other media companies have been giving away their creations free of charge for years, and Hulu Plus is an acknowledgement that the free model isn’t sustainable, at least not by itself.

    Several aspects of Hulu Plus underscore FargoTube’s advantages for television studios and especially for other content owners.

    For one, FargoTube allows content owners to post their videos without advertising, an important choice for owners who believe an ad-free environment facilitates stronger connection with fans. Content owners who do allow advertising typically reap half or more of the ad revenue that FargoTube collects. That’s comparable to what Hulu now collects, based on an estimate by the New York Times in March. Hulu hasn’t said how much of the subscription fees it will share with content owners (Hulu LLC itself is 90 percent-owned by three television companies: NBC-Universal, ABC-Disney and News Corporation, owner of the FX Channel and Fox News Channel). FargoTube shares more than half of subscription revenue with content owners.

    Although navigating Hulu may be a bit easier than a DVR/television combo, and though picture quality may be somewhat inferior (Hulu Plus is supposed to feature higher definition), it’s basically the same as TV: a one-way medium that the viewer sits back and watches.

    FargoTube is interactive, with video as the center of a social network that we call a “tube”: Viewers can e-mail each other and post comments while watching. They can create networks of online friends with similar entertainmnent interests. They can subscribe to one tube or more than one, or pay a one-time fee for a single video, depending on how the tube owner wants to integrate FargoTube with the rest of his or her online presence. Unlike Hulu and YouTube, FargoTube is primarily a behind-the-scenes solution for owners to monetize their content while maintaining direct contact with viewers and fans. The direct contact allows tube owners to better understand their fans’ buying habits, and to promote other business lines, such as concerts, in-theater premiers, and online sales of merchandise like t-shirts and car accessories.

    Financial analysts and tech bloggers have been mostly positive about Hulu Plus.

    “They are offering a hybrid approach which I think leverages the Web — some content is free and supported by ads and some content will be paid,” consultant Michael Vorhaus, who has studied online pay models for networks and newspapers, told the New York Times.

    Bruce Leichtman of the Leichtman Research Group told the newspaper that he sees “not a lot of interest in paying for Hulu.”

    At ITWorld, Peter Smith theorized that Hulu might come up with a Hulu Plus Plus with a higher subscription fee and no advertising at all. The company told him it’s not ruling out such an option.

    If people don’t end up being willing to pay for either new option, it may be because they can already get the same or similar television programs free of charge — both on television and online. FargoTube’s situation is a bit different, however: Most of our clients and potential clients are smaller than the giant TV studios. They’ve built up fan bases outside the mass media, and we believe those fans are willing and eager to pay for access to new and original content.

    I was checking out comedy skits on FargoTube’s competition — YouTube — yesterday, when I noticed something surprising: A Republican National Congressional Committee ad popped up on a video spoofing Sarah Palin. The RNCC was asking for donations with the tag line “Don’t let Obama and The Left win.”

    People who crack up after watching “Sarah Palin” wondering aloud who the first president of the U.S. was — do they really want to see RNCC ads on their screens? And what about people willing to fork over $25 to $30,000? How many of them are happy to see a sliver of their donation going to a website that hosts anti-Palin videos?

    The dilemma crops up a lot less often for viewers on FargoTube. Owners can monetize their video content entirely via subscriptions, or choose to allow ads when they believe viewers will tolerate or enjoy them.

    As with YouTube,’s primary revenue stream is advertising, albeit video advertising similar to what’s on traditional television. While some financial analysts cheered the launch of a subscription version of Hulu earlier this week, others predicted that the continued ads would repel would-be subscribers.

    And of course you may have heard about iOmega’s “Burn, Baby, Burn” ad, which someone appears to have screen-captured alongside an article about a toddler dying in a house fire. I don’t know if it ever happened to appear that way, or if someone got a little crazy with PhotoShop. Either way, it was a public-relations disaster for both iOmega and for the news organization.