The allure of building a business around user-generated content is fading fast. SplashCast, a company which launched two years ago around the notion of helping consumers put together videos, text, graphics, and music in embeddable broadcast “channels,” is discontinuing its original product. “Most of us would rather consume than create. This is one of the big ticket findings of the Web 2.0 technology wave,” concludes CEO Michael Berkley.
And after failing to raise a B round of funding, he is now trying to sell the company. Instead of trying to make money off of user-generated broadcast channels, he is focusing on his newer Social TV product, which adds social features such as chat, commenting, and polling to professionally-produced videos.
The SplashCast product being discontinued was simply too complicated for most consumers. It was a full content-management system which allowed consumers to bring together videos with images, text, and sound. In a candid assessment of why it fell flat, Berkley says: “We were hoping to launch a publishing revolution. What we found, however, is that very few users are willing and able to make an ongoing commitment to publishing and distributing content. Lots of users test; few stick with it.”
While more than 100,000 SplashCast accounts have been created, “only a few thousand” use the product regularly, he tells me. Partly, this is the curse of building a business which relies on the creativity of users. “Like so many other Web 2.0 companies,” admits Berkley, “we simply haven’t found a way to meaningfully monetize user generated content. Users are loathe to pay meaningful subscription fees. Furthermore, advertising on user-generated video content hasn’t played out—just ask YouTube.” If only a tiny fraction of users create anything worthwhile, you either need a whole lot of users to make that work or you need to be able to attract the most creative people to your product.
But partly, SplashCast also suffered from the curse of not keeping things simple. Berkley is taking that to heart by shifting the company’s remaining resources to making Hulu-quality videos more social on Facebook and MySpace. Berkley says SplashCast videos reach 5.8 million unique viewers per month and it streams 7.2 million videos. A full 90 percent of those streams come from only 25 SplashCast channels, mostly centered around network TV shows like 24 and the Simpsons or major label music artists.
The net is changing every day!!! – http://www.webedesigner.com
Good luck Mike. You’ve got a great team with a strong content platform. I’m sorry this didn’t work as planned, despite all the successes along the way.
Thanks, Morgan.
As Erick wrote in the post, we have learned a lot in the last few years about the balance between producers and consumers of content. Even with as simple a publishing tool as Twitter, there are far more listeners than writers.
To be clear: this move allows us to focus 100% on developing the Social TV product, via partnerships with Hulu, Sony BMG, and others.
We believe very strongly that Social TV will play a critical role in the evolution of online video.
While it can be difficult for entrepreneurs to accept, sometimes it is best for the development of a new idea / product to join forces with a larger, better-resourced company. We have come to terms with this and look forward to taking Social TV to the next level.
Thanks,
Mike
CEO / SplashCast
“we have learned a lot in the last few years about the balance between producers and consumers of content…” the rest of the ‘Social Media’ will learn it some day too…
I don’t want to see f…ing twitting idiots replacing WSJ. I don’t want to see the world where imbecile ‘hi-tech’ bloggers with their overblown egos have replaced my Economist and Business Week.
Plain sh..t and egotistic BS must be separated from the well thought over content.
As a former Splashcast user. I must say, it was a great service.
You wonder if the Google Wavers are reading this…
AWESOME IDEA. Not really.
In all seriousness, how did they raise any money to begin with?
That’s not nice. It was a GREAT service. I wish them more success on their future ventures.
SplashCASH, anyone?
Sorry to see a Portland company go down like this. I think the style and concept of the business was very creative and clean, but he is right in his assumption about the small percentage making the content for the masses (see: Groundswell). They have great designers and developers. I’m sure Mike will find a way to spin this to a win.
For Portland, this week, first Vidoop, now Splashcast. On the non-tech side, the NIKE layoffs ripple throughout the entire City as well.
Of course, the funding of Portland tech startups is generally 1/10-1/20th of what they’d have received if based in California. So, it’s amazing they stayed alive as long as they did.
But, there are no second-rounds for PDX based ventures, you die fast there, but, get great coffee, microbrews and pinot noir along the way.
It is curious that one of the most cost efficient locations for living is one of the worst locations for VC funds. The talent is in Portland and you don’t have to pay them much, but, the money just doesn’t happen in any meaningful way there.
Sorry to hear that the company is deadpooled, but it is the question of monetizing the content that always gets me. Hoping that users create something “sell-able” doesn’t work. You have to turn the model around completely, have content consumers request the content they want and back it up with $$. At that point pros and amateurs alike will create the content to compete for the $$.
Point of clarity: SplashCast isn’t shutting down.
SplashCast is shutting down its UGC product.
SplashCast’s Social TV product (where we’ve found traction) lives on.
See recent TechCrunch article on Social TV (great stuff):
http://www.tech...ut-the-chatter/
User generated content definitely doesn’t generate revenue just by virtue of being user generated. There has to be some hook or feedback mechanism for users that encourages them to generate interesting, creative content.
Seems to me like this site allowed users to generate content, but didn’t have any compelling reason for users to create any particular type of content.
Check out this excellent talk by Ben Huh of Icanhazcheezburger.com about the reasoning behind online communities and generated content. After all, he’s made a profitable business out of people who are willing to create stupid pictures again and again.
http://www.benh...a-presentation/
The field of UGC is very interesting.
You point out one of the three main factors: how “guided” is the experience. The more guided, the greater the submission rate.
The other major factor is ease of submission for obvious reasons.
The final factor is public/private. Users generally feel more free to submit in relatively private settings like Facebook.
…FOR NOW! Let’s see what happens in a year from now.
SplashCast is/was only a tool for creating and organizing user-generated content, right?
What was the incentive for the user to create content?
Michael,
Wouldn’t it be easier to just layer twitter over hulu etc?
Twitter makes sense for live content (e.g., Obama speech).
“Chatter,” in contract, is video time (versus real time). This makes more sense for recorded/on demand content where you don’t have a massive audience simultaneously watching.
I don’t think there was a problem with the idea, YouTube is pretty good proof people like to create content they have no business creating. The main problem is that this article about them attempting to sell the company is the first I’ve ever heard of it.
Bummer to hear this – but as @mikeberkley said – time to move on and focus on what is working (basically!). Glad to see @tomturnbull recognizing some value in twitter finally – thought he might have been left in #geocities glaze over still. hah!
Seriously – best of luck to the future of SplashCast and let me know if I can help.
Tip of the “UGC service = fail” iceberg
@ m_dluc
Re: Portland
Not true. We’ve raised 50m in 3 consecutive rounds from tier 1 vcs. In fact we are about to close a 4th dedicated just for growth oriented initiatives.
Portland has been a very efficient location for us and hasn’t proven difficult with the sand hill road mafia. Here’s the key, tho: revenue. Get ebitda positive and you are on easy street. If instead you are a pre revenue you can go from splashcast to outcast in no time. Also splashcast raised it’s money in a different climate in 2007 than today. Also, I’d take issue with their CEOs comment that their series A lacked re right players therefore no Tier1 vc would touch them in Series B. Conventional wisdom says this is true, but why did they call it series A? Why not classify it as seed? My guess is they have a valuation and board control issue and this is not a Portland vs Seattle issue.
I’m also a bit confused about the modality of tv watching inside a social environment. In other words, I can understand why the networks want to inject longform content inside fb but I’m a bit dubious about users’ desire to consume it. True, if you have a group centered around The Office, why not have it available. Makes sense. But why isn’t this just a fb app that fb launches? What’s splashcasts value add?
Don’t get me wrong, I’m not against the idea butrather haven’t read a clear articulation of the compelling rationale for why users will adopt this and what the lock out is for spalshcast given that it doesn’t own the content nor does it run the social network. It doesn’t even own the social graph data, does it? Can it deliver unique intelligent targeting that fb alone couldn’t already do. Whats the value in becoming a dumb pipe? Except absorbing the hosting or data transfer and web dev expenses?
“SocialTV” in theory already exists, it’s called HSN and QVC and on the web YouTube and vimeo have done a good job distributing unmonetizable content. But if veoh can’t make it work with 80m and mike Eisner and crackle and revvr are stalled out, where does this leave splashcast?
I’m questioning the very premise that fb is necessarily the right strategy. To me, it’s like looking for your list keys where the light is good. It “seems” like a no brainer launch inside fb, but is that in fact true? I believe if they were to think more critically about video and it’s value, they might come up with a variety of monetization strategies of which “social tv” is but one.