When GoFish bought Bolt for $30M in a stock deal to help Bolt pay for its settlement with Universal Music, I could not help but take notice. Bolt, after all, had been around for some time, generated $7M in annual revenue and had migrated its business model from a publisher of content for teens to a user generated platform for video.
I had no real idea what GoFish was, but seeing them buy Bolt, I took a deeper look. GoFish was publicly traded, worth $100M in market value, and judging by its site, had decent traffic. Decent traffic, it turned out, was a unique user base of 9M, which made it the largest publicly traded company in the video sharing landscape.
A lightbulb went on: unlike venture funded file sharing platforms, GoFish would inevitably turn to monetizing its content, but so long as its content was mainly user generated video, it would not prove successful. This is by no means a knock against GoFish, our distribution partner now, but rather, a fact that advertisers are reluctant to advertise alongside user generated content.
I have pointed to this graph quite a bit and I think it is more and more accurate, as the market evolves and galvanizes:
Once we established contact, we realized that GoFish was seemingly well aware of this and had started to sign partnerships with a number of content producers, notably mainly online-only content producers. In other words, while YouTube was arrogantly trying to dictate the terms and rules of engagement to old media content owners, GoFish was reaching out to content owners to leverage their content through added distribution and share in the proceeds.
For the record, we will also be doing a deal with YouTube inevitably, who does not like the site? But YouTube, like Google, needs a dose of humble pie. I love and respect both Google and YouTube, but come on people, is something like this normal?
It’s a shame, but YouTube has been slow, not just with us, with everyone in the space, and despite being a part of Google, there’s nothing that guarantees that long term, they will remain atop the video space.
They don’t own the content, obviously, so there’s nothing all that defensible about the position, if you really think about it. I do think that the market for new, second-tier file sharing video sites is done and oversaturated, but amongst the companies atop the broad landscape, a lot can change over the next few years. Imagine if slowly but surely, a company like GoFish were to sign 1000 deals with content producers and all you found alternatively on YouTube was the stereotypical user generated clips and notices saying that “this video has been taken down,” where would you go?
Where would you go indeed! I have always maintained my desire and goal to make WatchMojo.com the best TV station on the Web. But like any content producer, added distribution is welcome. You can read more about the partnership here.
To us, the logic is pretty obvious:
We rather keep videos on WatchMojo.com “clean,” ie. no prerolls, and no ads within the video, but on distribution/syndication partner sites like GoFish, it’s a nice hybrid model: we get added distribution, branding, free marketing and we can monetize it through their 9M US uniques and 17M global uniques.
GoFish gets content they would not otherwise get. We have 4,000 videos on our site, we get 200,000+ unique users on our site, we have started to monetize the traffic via good old fashion display banners etc.
When we put our videos on YouTube, it’s only a promotional tool, so we will put a couple of hundred clips. Last year our videos generated 1M streams on WatchMojo.com, but on Google Video and YouTube Video alone, they generated 2M video streams. Now imagine if we had 1000s of videos, and not 100s… we could have generated 3, 4 or 5M streams easily.
If we had a revenue deal in place with YouTube, which we are getting closer to having, we’d have an incentive to do so. GoFish seems to be taking the lead in striking deals, and that is good for the company.
Of course, if I had a market cap of $100M and a trailing 12-month P/S of 2,850, I’d be looking for ways to monetize the traffic as well… the Bolt acquisition was shrewd, as it put the network’s traffic at 9M in the US and 17M globally, and deals like ours will help GoFish monetize the traffic at a faster clip than the market will expect them to. And in investing, it’s always about being ahead of the market’s expectations… so GoFish gets a lot of credit for realizing that.
I’ll keep you informed of the GoFish deal and link the channels as they go live, and I’ll also unveil new partnerships as we complete and announce them.
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