Caffeine’s 21st Century Fox Partnership/Fundraise

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Caffeine, while unrelated to the picture above, is making a move similar to Vimeo in that Vimeo is trying to offer a more efficient and differentiated service than its competition, whereas Caffeine partners with Fox to learn how to offer a more simple and creator-friendly service. Competition is full of big names here, but that is the point!

One of Vimeo’s selling points is that they offer “60-70%” of revenues to creators, far above the decreasing percentage offered by YouTube. Of course, there is the argument that YouTube has the higher market share, first-mover advantage, etc. However, as streaming has become a hot topic with sports, esports, gaming, cutting the cord, and more., making a service more creator-friendly will become an advantageous strategy in the next 5 years. That’s my bet. Thinking around why decentralization as a theme is becoming more of a profound idea can show that when an entity like a YouTube, a Facebook, or a Google even becomes too big (perfect timing with the Google no-show this week in court), smaller players step in and take advantage of the holes. Think about Shopify as a platform for creators to fill in gaps where Amazon doesn’t plug in(pun). Feel free to comment if anything comes to mind here.

Here’s a new category that is perfect for venture funds with a specific thesis playing against the giant funds: startups that give creators MORE access and MORE share of the economic pie of their business revenue competing against big names. Very contrarian. One idea to keep in mind is psychological as well; the bigger the potential, the more dedicated creators will be in honing their styles and abilities. Maybe these Caffeine-like companies that follow that MORE strategy will end up creating the new “freemium” model: high revenue share to creators, while making money on up-selling other upgrades in software.

Ask for my sources if you dare 😉 Okay fine, Dan Primack, The Hustle newsletter.

J

 

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