
Video Startup Can’t Outspend YouTube, So It Created New Currency to Pay Creators - beriboy
https://www.bloomberg.com/news/articles/2017-11-27/video-startup-can-t-outspend-youtube-so-it-created-a-new-currency-to-pay-creators
======
stingraycharles
This is really just the same as saying they raised money to pay creators, but
that wouldn't sound so innovative. One way or the other, it's people investing
in this startup (or currency if that's what you want to call it) that pay the
content creators.

What I wonder what will happen as more content creators join the pool, thus
diluting the value of a "prop". Is the idea that this will also draw more
consumers, thus balancing out the value of the prop ? How is the total market
cap determined ? How will it grow ?

~~~
dclowd9901
Yeah, I was going to say: this sounds like a bond issuance lol. How boring is
_that_!

That said, how cool would it be for companies that make products to issue you
a portion of the company with every purchase, so that you could actually
support them _and_ be supported by them?

~~~
sly010
I am not sure about the exact structure but REI is set up as a coop.

~~~
dbcurtis
Coops pay out a patronage dividend to members. Coop accounting is a wierd and
special beast, and I won't claim any expertise. Typically a member pays
something to belong, that is how ag coops raise some of their capital, for
instance.

In the REI case, the dividend amounts to a discount on purchases for members.
Others pay the full freight. Same goes for ag coops, but the stakes are much
larger and the accounting more complicated.

There is no reason other businesses can't be structured as coops, but trying
to find someone who understands the structure probably requires visiting a
land grant university in fly-over land and looking up the business school.

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ChuckMcM
This is something I expected to come from a company like Medium. Basically a
'build your own content' portfolio using a block chain type currency to make
the market.

User's pay $x per period (or merely periodically) in exchange for some amount
of currency, which they 'spend' by consuming (viewing/reading/listening too)
content offered by people creating things for them to view/read/listen to.
Each month the artist can convert their accumulated currency in a $y payment.
The platform lives off the difference between the $x -> C -> $y ratios.

If you can reach critical mass it makes for a very interesting twist on the
existing model, sort of kickstarter meets bitcoin meets ebay. One way to
finesse it would be for users to 'bid' on creative projects as well so a
creator could say "I can do a video about kittens, free for anyone who
contributes $.5C or more to the campaign, it will cost $C for non-backers to
view it once it is complete."

You set up a virtuous loop where people willing to spend are advising the
creators to the things they should work on, reducing risk on the creators
part, increasing satisfaction on the users part, and overall
creation/consumption overall.

~~~
mason55
Why does this need to have anything to do with blockchain technology? What do
you gain over a central intermediary?

~~~
zitterbewegung
Free marketing , ability to sound hip, and also a way to cheat and steal from
your users . Also an completely automated bug bounty system

~~~
orange8
> a way to cheat and steal from your users

So using a distributed blockchain database makes it easier for you to steal
from your users than if you had a centrally controlled database. Really?

~~~
zitterbewegung
New tech always has security problems especially when it first comes out and
the blockchain is no different.

Then you can claim you had a security problem and act like you have been
hacked. Wait for your "company" to die. Then run with the money.

------
vkou
> YouNow’s ICO is hardly huge by current standards; the largest sales have
> brought in upwards of $200 million. But it’s notable for other reasons.
> YouNow is already a profitable company with 40 employees, name-brand
> investors and 40 million registered users, a rarity in a world dominated by
> brand-new projects. People who work with cryptocurrencies say they’re
> fielding an increasing number of calls from established companies and
> predict that’s where the next wave of notable cryptocurrency projects will
> come from. The Props project is an early illustration of what that process
> could look like.

How are they profitable? What's their revenue stream? Selling coins to
speculators? How on Earth does that definition of 'profitability' currently
justify the value of the coins? "This is not like those _other_ ICOs, because
we made 200 million dollars selling coins!" is a huge stretch of reasoning for
"So you should buy coins!"

I'm not saying the business sucks, or is a fraud, but that is an incredibly
sketchy line of reasoning. I expect better from Bloomberg.

~~~
mksreddy
They are top 5th grossing app on android in social category. I think they have
decent revenue from app.

~~~
vkou
Okay, that's a bit more reasonable. Even then, though, the token is not a
share in the company. I suppose it is a signal that the company is not some
fly-by-night operation.

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Cyberdog
See also LBRY ([https://lbry.io](https://lbry.io)), which is basically
blockchain-powered video hosting (though technically it can host other types
of files too) with cryptocurrency functionality. It is to YouTube as Steemit
([https://steemit.com](https://steemit.com)) is to WordPress.

~~~
username223
This whole comment ([https://cmt.io](https://cmt.io)) sounds like air leaking
out of the current tech bubble ([https://tech.bbl](https://tech.bbl)) on its
last days.

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cocktailpeanuts
See also:

Chat startup can't outspend Facebook, so it created a new currency to scam
gullible "investors":
[https://coinmarketcap.com/currencies/kin/](https://coinmarketcap.com/currencies/kin/)

Look what these guys did (funded by the same VCs), and you'll see why this is
more unethical than even some of the shadiest ICOs.

I can understand why they're doing this, but the founders and the VCs should
just step back and think about it for a bit. Do they really think they can
make a comeback because they raise dumb money?

I'm sure the answer will be a No, if they really think about it. The problem
is they're probably past that point and can't think rationally. (And the VCs
have nothing to lose by letting them go ahead with this because it's better
than losing all their money)

~~~
Cthulhu_
> Do they really think they can make a comeback because they raise dumb money?

Maybe, maybe not, either way they'll probably walk away with a lot of money.

------
josu
[https://d.tube/](https://d.tube/) already did this and so far it seems to be
working. Although they based it on Steem, an exisiting crytptocurrency.

You can read more about dTube here: [https://steemit.com/science/@ms007/dtube-
all-about-it](https://steemit.com/science/@ms007/dtube-all-about-it)

~~~
aaron-lebo
Everything that originates out of steem seems to be a lame attempt at making
money and then pyramid scheming that through the rest of the steem community.

~~~
uhhhhhhh
I'm not sure if props is any different yet TBH. Give us money for tokens we
promise you will give you access to content you want at a later date?
Depending on how much of that money goes towards content creation or
attracting content creators really determines if this is some sort of pump and
dump or something more complex.

------
jondubois
What people just don't seem to understand is that a cryptocurrency has to be
tightly intertwined with the service it offers in a completely trustless
manner. Merely having a company which has the same name as a cryptocurrency or
made by the same people just doesn't cut the mustard. The service and the
currency need to be logically and inseparably intertwined.

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nwah1
I can't pay you in real dollars, so here's some nwah1-bucks

------
otakucode
This is a pretty good idea. Google has been aggressively anti-competitive in
the video space and the US government has made it abundantly clear that they
don't care. Losing hundreds of millions a year for a decade just so no
competitor could ever even hope to begin building infrastructure for a
competitor has been very effective at shutting out all competitors. When
traditional means are cut off through bad faith dealing like that, people have
to get creative. And after reading 'The New Digital Age' where Schmidt makes
his case for Google taking control of all of human culture with no more
justification than 'we are rich, therefore better', I more than welcome anyone
who stands even a faint chance of taking them down a thousand notches or so.

~~~
Eridrus
Losing money to get to scale isn't anti-competitive, it's basically how any
business with economies of scale gets started.

~~~
ktta
It absolutely is

[https://en.wikipedia.org/wiki/Dumping_(pricing_policy)](https://en.wikipedia.org/wiki/Dumping_\(pricing_policy\))

~~~
uhhhhhhh
Or maybe not?

[https://en.wikipedia.org/wiki/Loss_leader](https://en.wikipedia.org/wiki/Loss_leader)

Loose money to attract users/creators who put more money into the system.

I don't see how this would qualify as dumping in any way.

~~~
ktta
I don't think loss leader is the correct term either.

YouTube doesn't make money, nor intends to make money in the near future[1].
The key here is to get entrenched in the market, then assert their monopoly.

On surface this might seem okay, but it definitely is anti-competitive. We've
just gotten used to it. Dumping isn't the proper term, but was the closest I
could find. It comes under predatory pricing, but the problem is, this
business practice is so different from what the current literature consists
of, I don't think there even is a proper term.

[1]: [http://fortune.com/2016/10/18/youtube-profits-ceo-susan-
wojc...](http://fortune.com/2016/10/18/youtube-profits-ceo-susan-wojcicki/)

~~~
saalweachter
From your link:

"That doesn’t necessarily mean YouTube isn’t profitable, but it just means
it’s not a focus at the moment. YouTube, which primarily makes money from
advertising within its videos, doesn’t release revenue numbers (it is not
separated in financial statements by parent company Alphabet). But some
reports put revenue in the billions."

~~~
ktta
That sounds like corporate talk. It's been 11 years since YouTube has been
acquired by Google. Insane amounts of money has been poured into YouTube.

Sure, it gets revenue, but I bet it's not close enough to justify the
expenditure, and there's no clear path either.

------
clw8
As other people in the thread have pointed out, "Creators" is not the right
term. I visited the site once awhile back and not only is it just a
livestreaming service, but it seems like 90% of the users are high school
kids, so it's not a pleasant thought to think about who among their viewers
has money to spend on "Props"...

------
gremlinsinc
Why not create a blockchain where ACTIONS online = PROFITS. The bigger actions
would payout more, but coin is actually minted through online content
creation, where you the creator of that content get compensated based on an
algorithm.

Could even have that algorithm take in external things and re-calibrate the
coins you were paid (i.e. give a bonus) for social media reach, or number of
views...

E.g. : You post a video. -- You get 10 props. User B submits a comment. They
have 500 comment karma so they get .01 props. User C submits a comment. They
have 0 karma.. they don't get any props. User D has negative karma -- they
actually have to pay props to comment till they're out of the hole.

Over a month you get 10k views, so the algorithm looks at all views across all
videos for the month, and pays out a bonus where each view = 1 share out of
the bonus pool of newly minted coins. Say there were 10 other users all w/ 10k
and 100 props for grab you could basically give each 10 props as a bonus.

Obviously comments/etc isn't a huge time taking thing like creating a video,
so video creator should get more.

I'm imagining something like Reddit + Steemit combined with some added rewards
systems to keep users involved and providing QUALITY content, the karma system
would be setup to basically try and ensure better quality.

~~~
cm2187
Why do you need blockchains for that? It's effectively a token system.

------
nsomaru
Surprised nobody here has mentioned Brendan Eich's Basic Attention Token
(BAT). It ostensibly solves a problem that I see mentioned often on HN
(micropayments for online publishers), and the plan is also to pay users who
opt in to seeing ads. Brilliant!

It's integrated into the Brave browser already.

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cabaalis
I would put my content (development tutorials) on YouNow if it paid less than
YouTube but didn't engage in the crazy shenanigans YT does. Meaning a real due
process for DMCA including punishment for false claims, and truly specific and
regularly enforced content restrictions for monetization.

~~~
uhhhhhhh
>including punishment for false claims

I don't see that happening any time soon. The automated nature of the takedown
system (which is really required due to volume) is going to have a set false
positive rate. the very same companies/groups that will invest in these media
type things are the same groups that will never accept that type of penalty.

the question is does this actually managed to side channel the investment
around the major players and allow it to actually go against the market
without penalty, or is this just another way to pump up an ICO on the promise
of an ecosystem that will ultimately fail, but leave a lot of money out of
investors hands and conveniently into those marketing it right now... I'm
leaning towards the latter, but I might be wrong.

------
jasonkostempski
Has any company in history taken "inspiration" from it's competitors name and
then supplanted them? "YouNow" just sounds like a typical YouTube-Without-The-
Google type of app.

~~~
aaron-lebo
It's so horribly uncreative. Why not WeTube?

~~~
handedness
It's enough to remind one of Captain Slow:

[http://www.wheels24.co.za/News/Capn-Slow-slams-Twitbook-
Face...](http://www.wheels24.co.za/News/Capn-Slow-slams-Twitbook-
FaceTube-20130111)

------
egypturnash
They called it "Props".

The back of my head kept on trying to read that as "Beenz" instead.

(beenz: "the web's currency", also "one of the greatest dotcom disasters".)

------
king07828
1) start an ad based website;

2) pay content creators with a new cryptocurrency;

3) require advertisers to use the cryptocurrency in order to buy ads.

If YouNow implements step 3, then they might have something.

~~~
tryingagainbro
Who knows, maybe they'll end up doing a different #3, put the cash in their
pocket, while creators get paid with funny money. Lotsa scams as people try to
catch the next bitcoin

~~~
king07828
After reading the YouNow whitepaper, I am unsure how to argue that they are
not doing exactly that

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xhrpost
[https://en.wikipedia.org/wiki/Truck_system](https://en.wikipedia.org/wiki/Truck_system)

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chillingeffect
Just as an aisde: One needs an account from G.I.F.T. (goog, Inst, fb, twit) to
use YouNow. No email option.

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snacktaster
younow is very creepy. a lot of it is middle school and high school aged kids
dancing around in their bedrooms or entertaining teen talk for thousands of
viewers. I just get a really bad creepy vibe from the site in general

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zitterbewegung
This is yet another block chain tipping product that is needlessly complex .
Why not just give a set conversion table (one bit equals one dollar) like
twitch? Also figure out your cut and fees and put that in the table.

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CryoLogic
YouNow is actually a live-streaming service so I wouldn't call it a direct
competitor to YouTube. It's more like a competitor to Livestream.com or
Justin.tv (previously)

~~~
icebraining
YouTube is a live-streaming service.

~~~
dragonwriter
YouTube _includes_ , among other things, livestreaming.

------
CryptoPunk
It's noteworthy that this is an ERC20 compliant token. A pretty significant
market of tokens is developing around the ERC20 standard, which should
generate significant returns to scale (a high level of compatibility between
applications supporting individual tokens means less duplication of work and
more complementary development).

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erebus_rex
I have a feeling jobs on craigslist will say "paid in props" now rather than
"paid in exposure".

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loudandskittish
Reading this, all I can think of is that South Park episode and "Theoretical
Internet Dollars."

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sjg007
A potential value here is that you now support micro-transactions or can pay
for an ad free experience.. but then I don't know why you don't just use
bitcoin for this. Or maybe you can exchange to bitcoin.

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nextstep
Thought this would be about Viuly ([https://viuly.com](https://viuly.com)) but
I guess there’s a few cryptotokens trying to compete in this space.

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lerie82
It's probably just me but this website is in no way in competition with
YouTube, it kinda sucks.

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ttul
Blockchain: The new thing to revitalize your stagnant growth startup.

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coding123
I have been burned too much in trying to get into ALTs because Bitcoin is
still rocketing. As long as bitcoin is rocketing, you lose money by trading
BTC in for anything else.

~~~
anonyx69
Most alts in the top 10 market caps just follow the swings of bitcoin anyway

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emodendroket
How is this different from paying in scrip?

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swlkr
How does younow compare to twitch?

