Despite local reviews claiming “NZ Firm Leads Online Video Advertising Revolution,” BuzzShed has slashed payments after discovering failed models don’t get any better with age.
The revolutionary model: pay users to watch advertising.
We’ve seen the model many times before. Web 1.0 delivered services like AllAdvantage and a sea of clones. More recently BrightSpot.TV launched then failed, despite some serious backing and a world of great intentions. Agloco never got off the ground.
Wellington, New Zealand based BuzzShed though is trying very hard to spin their trip onboard the fail train. Here’s some highlights from the press release they sent us today (with explanation). They receive top marks for 1st class spin:
BuzzShed is pioneering a new way to deliver online video, with the implementation of supply and demand pricing into its permission marketing based video distribution system. Today, BuzzShed announced the changes for both BuzzShed subscribers and advertisers, making an exciting new tool more accessible to small and medium sized businesses using online video as a promotion channel.
Translated: we couldn’t find enough advertisers so we’re cutting advertising rates
As a consequence of recent BuzzShed subscriber growth outstripping the growth in new advertiser accounts, BuzzShed has experienced an oversupply of new members. Accordingly, existing BuzzShed advertisers are taking advantage of the new market based pricing to promote videos to large audiences at low cost – as little as $0.05 per view.
Translated: we couldn’t find enough advertisers so we’re cutting advertising rates
BuzzShed CEO Hayden Saunders anticipates prices to rise as advertisers catch on to the new pricing model and frequently targeted subscribers increase their minimum reward amount.
Translated: we’re cutting the cost of advertising now because we think it will magically go up in the future by offering it for less now….ok, sorry, even I can’t make sense of that logic.
Mostly from North America, the United Kingdom and New Zealand, subscribers use BuzzShed to engage with advertisers exploring alternatives to mass media promotion. Significantly, this is not a video host that competes with video giants like YouTube; the company simply distributes links to videos already online.
Translation: we add some YouTube videos to the site to make it look better (the site also comes with “revolutionary” Digg style voting…it looks like a Pligg install)
While other companies offer various aspects of its service - BuzzShed’s advantage is its combined offering of permission marketing and direct marketing, and its unique pricing model.
yeah, ok……
The bonus takeaway: BuzzHead also comes with a classic pyramid referral scheme as well.
I wonder what super-smart local VC is behind them.
“Rides the Fail Train…”
There really is a million ways to say deadpool.
I don’t understand why you guys even report on things such as “yet another spin on the paid to {insert action here} ad model”. We all know it doesn’t work, we all know they are going to fail sooner or later; so why waste time with multiple posts on the subject?
At least report on things that actually have some potential, otherwise the only use of such articles are to act as a feel good factor for other startup owners who haven’t fallen into the trap of using a dud business model.
I really thought the idea of TechCrunch was to cover and analyse startups offering constructive criticism.
Sure its an old model and a very unsuccessful one at that but I don’t read TechCrunch to flame companies and hopefuls.
One of your least enterprising posts.
Duncan - I appreciated the nostalgia of the post. I remember 10 years ago when I was a broke college student - AllAdvantage was a godsend for all of us. We’d regularly get our $25-50 in the mail, for doing absolutely nothing. I’m all for bringing back that business model.
I agree with Alex. This site is a great supporter of internet start-ups with a user base that can help provide leverage to many of the new ideas and technologies that it covers. I think this post is unneccessary and contradicts what techcrunch stands for. Whether the opinion of the Editor is valid or not. If you don’t like it, write about something else.
I agree with frank and alex. NOT.
Sounds like the shills from the company is on the site.
Here’s some constructive feedback… instead of paying people to watch advertising that they either don’t want or couldn’t care about, why don’t you create advertising people actually WANT to watch? Isn’t this why viral videos work?!
Is/was their content unattractive to advertisers?
Silly Kiwis.
I thought the post was funny at first…these guys clearly don’t know what they’re doing. But do you really have to be so cruel, Duncan? This is a real person who you are humiliating in front of the entire world.
Going toward alternatives to mass media promotion looks little risky to me, alternatively interactive media has lot of scope to capture specific market.