Metacafe has recently made some significant changes to their compensation program this week, and as with any major compensation program changes, it hasn’t come without some controversy within the community. The changes to the policy were interpreted by many as overly broad, and quite a few of the community’s most active video creators were nipped by the policy, and were shocked to see their videos completely removed from the site and their payment balances suddenly shifted into negative numbers.

The policy changes were announced by way of the Metacafe blog:

Videos that have sexual arousal as their primary purpose
Videos that are primarily promotional vehicles for a product or service
Videos that merely feature a person who is not doing anything entertaining or exceptional

There were additional regulations set forth that attempted to curb the production of derivative works and works that cover the same topics as other videos already in the producer rewards system.  The responses on the Metacafe forums were swift and loud:

You won’t see people spending lots of time and money on videos for MC anymore. With the few views videos get at MC now day combined with the really hard to figure out rules of what MIGHT BE accepted, people won’t be gambling their time and money here.

Since I now owe MC over $2000.00 I don’t think I’ll be getting paid again. And I’m not going to try and make a video to pay off that debt.

There certainly are significant concerns being raised by the userbase.  Obviously, a how-to on sensual massages clearly crosses a line set forth in the new rules, but what about a particularly fashionable low-cut dress on the primary subject in the video?  Isn’t sexual arousal a matter of subjective taste? What about a video blog?  Me talking about the mundane details of my life might not be exceptionally entertaining to some people, but if it was Britney Spears video blogging about the mundane details of her life, every tabloid Hollywood news show would want to run the footage every hour on the hour.

Late this evening, Metacafe made a post to their blog in an attempt to clear up some of the issues raised by the community, but from the look of the chatter on their forums, not much has been resolved for many of the producers. From Metacafe’s clarification post:

Regarding your concerns over the removal of videos from Metacafe, please understand that this was necessary for the continued success of the program. If we could have merely removed the videos from the program without also removing them from the site, we would have. Unfortunately, though, removing videos from Producer Rewards® means stopping the view count, and the only way to do that and compensate producers correctly is through removal. Besides, it would not be fair for us to stop paying for video views but still receive the benefit of those views.

I’m trying to figure out what Metacafe could be trying to accomplish with their policy changes, and it really escapes me.  It could signal an attempt to channel the creativity of their producers into a certain niche type, although what that niche is escapes me a bit.  It is possible (and arguably more likely, given the recent news of Revver) that they’re simply trying to limit the type and scope of videos that they will offer payouts to in the future.  Despite the fact that the costs involved with creation and distribution of video is scads cheaper than it is for traditional media outlets, there seems to be a very big problem with turning a profit for these large distribution outfits.

And that is the most baffling problem overall.  At its core, there should be no more difficulty for large video distribution outfits like Metacafe, YouTube and Revver in monetizing their inventory than what major studios have monetizing their programming.  The metrics is by and large starting to settle out, the viability of the medium as entertainment is clearly very well established, and the statistics show how well advertisements on this type of internet medium convert.  Where is the problem, then?

Perhaps we’ll start to get some straight answers from some of the large video distribution outfits soon, when they run out of  excuses for why they can’t continue to pay the people producing all the content that makes their sites popular destinations. The producers are starting to demand these answers, and it won’t be long before they realize they must follow the lead of other large internet communities like Digg and communicate with their users.

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