MyCube is a content exchange where digital content can be shared and sold.

For content owners, this means that they can monetize their content directly (via sales), vs. indirectly (via advertising).

So which method will you make more money with – direct or indirect.  Well the only way to know for sure is to put your content up for sale on MyCube and compare the resulting revenue to what you would have earned via advertising.

However until then you can use the following chart to get some idea of what combination of price and purchase rate you would need to achieve in order to reach a given CPM (cost per thousand impressions) equivalent for advertising:

(click twice for full size)

The way to read this is: the price of consuming the content is in the leftmost column.  The purchase rate (% of viewers of the content who purchase it) is in the top row.  The intersection gives you the resulting CPM equivalent.

So for example: you are selling a piece of content (an instructional video, say) for $0.20 per view.  0.50% of visitors to the content (1 in 200) purchase it for the $0.20 you are charging.  Looking up the intersection of those two, you find you have earned a CPM equivalent of $1.00.  Which is basically what you would earn if you were a YouTube partner and getting the resulting advertising revenue.

The lesson here – online advertising CPMs are generally so poor that even very modest purchase prices and rates can result in a significantly higher CPM equivalent.  But you will never know if you don’t try.

MyCube attended (exhibited and spoke) at the Digital Content Monetization Conference – Europe in London last week.  Some quick observations:

• this very well may be ‘the year of digital content monetization’.  There seems to be an emerging understanding of the possibility of, and need for, content publishers to earn more from their content, and there seems to be a seriousness about it that was not quite as evident when we attended the conference last year.
• there were lots of payment services in attendance, which also suggests that they payments industry is also looking at digital content as the next frontier
• however it is also clear that this is also ‘just the beginning’ and that there will be a lot of experimentation, as well as fits and starts, before digital content monetization is simply just a common, and core, business practice.

Over the last few days there has been a lot of opinions shared regarding Facebook’s frictionless sharing.  For those not familiar with this relatively new feature, services such as Spotify, Netflix, the Washington Post and others now have a Facebook app on their site which, if you agree to use it, sends an update on every piece of content you ‘consume’ on that site – audio files, vidoes, articles, etc – to your Facebook ticker,  or more accurately the ticker of all your Facebook contacts.

This is creating a divide in terms of what the acceptable definition of ‘sharing’ is.   The most relevant dictionary definition is ‘to participate in, use, enjoy, or experience jointly or in turns.’  So if everything you do is automatically broadcast indiscriminately to all that you know, is that really sharing?  Or does the notion of sharing imply some degree of thought as to whether what is being shared is indeed of some degree of interest to those it is being shared with?  And as such, is ‘frictionless sharing’ really more appropriately labeled ‘frictionless spamming’?

We are building MyCube based on the notion that sharing is a conscientious act intended to benefit both the sharer and sharee person it is being shared with.  Meaning that with MyCube you will need to actively select what content you want to share, and with whom, and not simply click a button and have all your actions broadcast to everyone, most of whom won’t give a …

Today most content earns money through advertising.  However, more content is increasingly being sold for a price, as will be the option content producers will have with MyCube.

So the question is – how does an advertising-based revenue model (‘CPM’, for ‘cost per 1000 ad impressions’) compare to a direct sales model (‘PPV’, for ‘price per view’)?  Can more money be made off a direct sales model than an advertising-based one?

To assess this, consider the following chart:

This shows (i) the CPM or equivalent currently being earned on a given piece of content, (ii) the equivalent PPV, (iii) the percent of the current viewership that would need to pay $0.01 per view in order to break even against the CPM, and (iv) the percent of the current viewership that would need to pay $0.10 per view in order to break even against the CPM.

So, for example – say you had a blog that was earning on average a $5 CPM, or had a video on YouTube that was getting a $5 CPM.  That is equivalent to getting $0.005 per view, which means that if you could get 50% of your audience to pay you $0.01 per view you would break even vs. the CPM earnings, and if you could get just 5% of your audience to pay your $0.10 per view you would also break even vs. the CPM earnings.

The point being, unless you are earning fairly massive CPMs on your content ($25 and up), you can charge very small amounts and get a fairly small percentage of your current audience to pay and you can meet or exceed your advertising-based earnings.

Now, how much can you actually charge for your content on MyCube, and what percent of your audience will pay for it?  Since we have not yet launched the MyCube ‘content exchange’ – and in fact since none have existed to date – we can’t tell you for sure.  However what we can tell you is that from a mathematical standpoint it is pretty likely you can make at least as much if not substantially more, and that it will be well worth the modest time and effort required to see for yourself.

As a follow up to the previous post, here is some information on how much money a ‘typical’ blog can earn – in this case http://www.goldilocssweeps.com.  We’re using this blog because a) the blogger clearly has put a lot of effort into it, averaging more than a post per day, and b) she openly and helpfully posts details on her traffic and earnings, making for easy analysis.

Goldilocs made $561.60 off her blog in October, broken down as follows:
Ad Networks:
Google Adsense – $27.96
Logical Media – $2.65
Amazon Associates- $0

Content (sponsored posts):
Blogsvertise – $25
Social Spark – $14.85
ShopAtHome.com – $403
MySavings – $.80
Sponsored Reviews – $15
PayPerPost – $19
Bloglog – $0 (0)

Other:
InBox dollars $.25 for October
Sponsored Tweets – $2.50
CONTEXTWEB – $10.59
LinkWorth – $0 (0)
Ads & Misc. Sponsored Posts – $0.00

Total for October: $561.60
First, you have to admire the creative ways in which she tries to make money – a wide variety of ad networks, sponsored posts, affiliate programs, etc.  But note that of the $561 – a decent yet modest amount given the work required – over $400 of this came from one source.

Here are some of the traffic details she posted for October as well:
Unique Visitors: 2,906
Post views: 8,000
Page Views: 43,520
So doing the math, her blog earnings in October were:
$0.17 per unique visitor
$0.06 per post view
$0.01 per page view

Could Goldilocs make more money off her blog is her audience had to pay for her content directly? For instance, if she had a subscription to her blog that cost $1 per month, would at least 20% of her audience subscibe? If she charged per article, could she charge on average $0.06?

These are interesting questions and the answer is currently “maybe”, because Goldilocs hasn’t tried charging for her content. Because, as of now, there is no easy way for her to do so.

This is where MyCube comes in. MyCube is the ‘content exchange’ where bloggers like Goldilocs can post their content, give it tags so that an audience can easily find it, and then, if she wants, charge for it – per article view, per monthly subscription, however she wants and for however much she wants. Could Goldilocs make more money by putting her content on MyCube than on her own blog? We don’t yet know, but given how hard Goldilocs works on her blog and all the things she tries to do to make money off it, we certainly think it her worth her while to give MyCube a try as well.

The standard formula for making money from a blog is 1) write interesting stuff, 2) attract readers, 3) throw a bunch of ads in, 4) watch the money roll in.

As any blogger can tell you, it’s not as easy as this.  No matter how good your content, attracting readers is a time-consuming and lengthy process, and the ads that Adsense delivers – usually “Lose 20 lbs in 20 days!” and the like – usually results in a depressingly low monthly paycheck.

Sure, some blogs make huge money, and many others make a decent amount.  But for every successful blog, there are hundreds that are wallowing away with minimal traffic and income – despite the top content that alot of them have.

So there are two assumptions of the standard blogging income formula that deserve reconsidering:

1) must you have to build your own traffic?  Or are there better ways to let an audience find you?

2) must you have to rely on (often highly non-relevant) ads for income?  Or will your audience be willing to pay you directly for your content?

At MyCube, our promise to bloggers is that we will deliver you an audience who is willing to pay for your content – as long as your content is worth paying for.  Meaning that you, the blogger, can focus on doing what you like most and do best.

How will this work?  You’ll have to wait until 17 January to find out the details, but in short we are building a ‘content exchange’ where individuals and brands can share content – for free or for a fee – about the things that are of interest to them.  So if you are a sports blogger who focuses on Team A, MyCube will be the place where you can share your content with others who are interested in Team A, and where you can charge what you think is reasonable for that content – whether it is $0.10 per article view or $2.00 per monthly subscription – it is up to you.

We’ll be giving limited access to the MyCube Content Exchange starting mid-December, and so if you are interested in getting a preview and finding out what MyCube can do for your blogging – or if you are interested in discovering and sharing interesting content – head over to our home page and give us your email, and we’ll try to invite you in as soon as possible.

MyCube has been in ‘private beta’ for the last few months, meaning that a small group of users have tried it out and given us some really good feedback.

Based on that feedback we are making some significant changes – and dare we say, significant improvements – to the service, and we will be opening up MyCube to all on 17 January 2012.

One of the major changes we are making is to make MyCube a place to be able to discover and share content – updates, articles, pictures and videos – about whatever topics are of interest to you. And to be able to easily connect and socialize with the people who create this content.

In practical terms, this means that if you are a big F1 racing fan, you can come to MyCube and easily discover and share content about F1 and interact with other F1 fans. And if you are a media organization or anyone else that has great F1 content, you could not only share it but in fact sell it for whatever value you think it is worth, while maintaining legal ownership and control.

However, pictures speak louder than words and so we hope to be able to share some screenshots of the service ahead of the launch – we’re certainly excited about how it’s looking and think you will be as well.

Here is a pretty amusing and interesting video by the band OK Go for their song “This Too Shall Pass”…

Now the band obviously did this video in order to generate album sales. But could this video have generated any revenue in its own right?

Well, the video has gotten over 30 million views to date. And 155 thousand people have ‘liked’ it.

So for the sake of argument, assume that 20% of all viewers would have been willing to donate $0.01, if it was easy enough to do, and that everyone who ‘liked’ the video would have been willing to give $0.10. That adds up to mathmathmath $75,000…and those are pretty modest assumptions.

You can come up with your own figures and do your own math. But one thing is clear – if as a content owner you provide high quality and exclusive content that is easy for an audience to find and pay small amount for, you might be able to get a pretty good return on it.

And our job, at MyCube, is to give content owners a platform to support this. More on this soon…

There is a lot of ‘valuable’ content – articles, pictures, videos and audio files that people would be readily willing to pay for – and there is a lot of content in social media.  But there is not a lot of valuable content in social media.

Social media is a great environment for content, because it can be discovered, shared and interacted with.  The content becomes, in effect, social.  But social media is not a great environment for valuable content, because in a social media environment valuable content loses the things that make it valuable in the first place – retention of ownership and control by the content creator, and the ability to readily monetize it.

In other words, once valuable content is placed into a social media environment, it ceases being valuable content and becomes commoditized, ownerless and free.

MyCube is working to solve this problem (a problem for content creators to be sure, and even for content consumers, which we will get to in a subsequent post).  MyCube is creating a ‘social content exchange’ which will allow valuable content to live in a social environment, taking on all the elements of being social while retaining the ownership, control and monetization that it needs to be valuable.

How?  When we launch, you’ll see, but for now realize that if you are a content creator, whether pro, semi-pro or amateur, and have content that you consider valuable yet want to allow it to ‘be social’, then MyCube’s content exchange will be of real interest to you.

Our last post was about an infographic we commissioned entitled “How Much is Your User-Generated Content Worth?”.  Although it correctly makes the point that your content has value, it is incorrect to assign the monetary values identified to the content itself.

The way the standard social media service business model works is: you create content and share it.  Your audience is attracted to your content and views it.  The social media service assesses your audience’s personal data (gender, location, interests, etc) and delivers targeted ads around your content, and makes money.

This means that the monetary value is actually generated by your audience viewing your content.  Yes, it is your content that is attracting the ‘eyeballs’, but it is the eyeballs that are being paid for, not the content itself.

At MyCube we have a different view, which is that a lot of user-generated content has value by itself – value that other’s would pay for directly.  Videos like this.  Or pictures like this.  Or articles like this.

That’s why MyCube is building a ‘social exchange’ where anyone can discover, share, buy and sell content that interests them with whom interests them.  All content is welcome, whether for free or fee, and the content that has true value will be able to realize its true value.