The Revshare Problem

By Chris Smith on September 01, 2016


You have choices when it comes to video distribution, and the more you grow, the more you should be able to exercise them — it’s your business, so you should always be in control.

Revsharing just doesn’t make sense past a certain point in your growth, and guess what? That point happens much sooner than you’d think.

The Revshare Problem

Revenue sharing is a pretty enticing little model when you’re first starting out — a company is going to handle some of the harder processes you might not understand or have the technology to execute, and for that service you agree to pay them a part of what you’re earning from your audience or ad sales.

Fair, right?

No. Not if you’re growing, and it makes way less sense than it did when you were just starting out. You’ll soon be wishing you had passed on revshares from the beginning. That regret can come quickly, too — we’re talking while you still have less than a thousand subscribers.

You see, as you get larger, as you get more and more paying fans and subscribers, that percent of revenue that you’re giving up represents more and more dollars, and your revshare partner gets more and more money even though they aren’t doing additional work or providing incremental value. It’s one thing to handle higher traffic, but the technology itself doesn’t change with you. You’re not getting something that’s more robust or something that’s evolving as you do. So why should they get more and more money for providing the same service?

Plus, companies like VHX are then in control of your money. That subscription fee your customer pays every month? Yeah, it goes directly to VHX, and they only pay you after they’ve taken their cut, and only then do they pay you on their own schedule . Seriously, that can be damaging to your video business, especially when the company can change their payment dates as they see fit, without needing your permission. You could be waiting up to two months for a payment (below).


Doesn’t it feel wrong to be getting your money after someone has already had their hands on it?

How It Should Be

At Zype , that sounds like insanity to us. It always has. So we handle our cloud video distribution service for OTT in a very unique way. We saw a need for an alternative to the backward revshare services of the past — because your money is your money and you should get every cent you earn.

With Zype, you pay a monthly fee to use our platform. We don’t “share” (read: take) your hard-earned revenue and pay you the remainder when we feel like it.

You need to worry about content, deals, and monetization decisions that will help your business succeed in every way you’ve dreamed. We’d rather help than get in your way — so with Zype you bring your own payment provider, like Stripe or Braintree. Everything you earn goes straight into your payment processor and is linked to your bank account for a cash sweep whenever you want or need it. We don’t touch your money. Repeat: We do not touch your money!

Doesn’t that just feel right? It certainly feels right to us. Revsharing may feel like a safe way to dip your toe in the water, but it’s outdated and unnecessary and ends up being a bad deal in the long run.

Zype wants you to have all the control. Your success is our success, and nobody knows your business better than you do.

Don't miss the accompanying piece to this, The Payment Schedule Problem.

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