If you are a content aggregator / distributor, and you want to cut in your content providers, or live event talents and event organizers, in on your subscription or PPV revenue, then this is a valid question and you need to decide on a calculation mode and key which works for you.
As a starting point, here are a few ideas:
1. Consider which percentage of your PPV and/or subscription revenue you would like to pay out to content providers?
2. Consider how you want to split it up: in equal shares across content providers, or according to performance?
3. If you go with a performance-model: how would you like to allocate payouts proportionally? Based on views or bandwidth usage? What matters more to you? The number of views a stream, event or video receives, or the amount of bandwidth (Video Minutes) being consumed?
If you want to pay out based on performance, and based on a certain percentage of your revenue, then here would be one possible calculation example:
- You want to pay out 30% of the gross revenue to content providers, leaving you with a 50% margin after the 20% System & Transaction Costs and the 30% payout to content providers.
- You have 10 content providers
- You want to spread the 30% revenue share across your ten content providers proportionally according to number of Video Minutes. Consider that VM is the metric for bandwidth consumption. It does not equal viewing time in all cases, but using Video Minutes protects you as your viewership grows, and it is proportionally exact, weighing the amount of usage between content providers accurately.
For simplicity sake, we will use $100,000 as assumed revenue, in which case, under this model, your calculation would look like this:
- $30,000 revenue share to distribute among content providers
- Read the VM amounts for the Channels, Events or Videos from your Media Stats Center for the desired time-frame
- Sum up the amount of VM the contents of each of your content providers has used during the desired time-frame
- Now divide the $30,000 revenue in portions equal to the proportional VM usage
Don’t forget, this is only one example. There are many ways, many models, you can come up with. This is only supposed to spark ideas and your business development process, as you come up with the calculation model for payouts which best fits your needs.