MSN Mulls Rewarding Video Site Users

NEW YORK Microsoft is considering offering users of its new video-sharing service incentives. The service, Soapbox on MSN Video, launches early next year and represents Microsoft’s attempt to compete in the user-created content sphere dominated by rivals like YouTube.

MSN has plans to compensate popular video creators, according to Rob Bennett, general manager of entertainment and video services at the company. It will also offer inducements to others who share, label videos and other activities that help the community grow and thrive, he added.

“We’re looking at ways to provide incentives to all aspects of the community process,” he said.

Microsoft could tap into its existing rewards system, Microsoft Points, which it uses with xBox, Bennett said. Another option would be to provide active users songs via its upcoming Zune digital music service.

“We’re looking at all options from [revenue] shares to community currency,” Bennett said.

A rewards system could encourage popular video creators to defect from YouTube, which drew 34 million users in August, about double the traffic to the No. 2 site, MySpace Video.

MSN would not be the only YouTube rival to tempt its users with cash. Revver has enjoyed some success with its system to place an ad at the end of user-generated videos. Revenue generated from clicks on the ads is split with the content creator. The company this month signed up the producers of YouTube sensation Lonelygirl15 to run the ad-supported videos watched at their Web site. The videos are still posted to YouTube, without the Revver-inserted ads.

At launch, Soapbox will not carry advertising, but Bennett said a variety of non-intrusive formats were under consideration. The key to making ads work in such environments is implementing systems that give advertisers assurance their brands will not be associated with unsavory content. He gave the example of seeing a packaged-goods brand’s banner ad appearing on a porn actress’ MySpace page.

“There’s concern they don’t have a full picture of the scenario their message is being delivered in,” he said.

In addition, Soapbox will be used throughout the MSN network, allowing advertisers to sponsor different contests using the service. Utilizing its entire network and tools like Live Space and Messenger will give Microsoft another leg up on YouTube, a standalone video site.

“We have an unlimited number of opportunities to monetize this content and provide opportunities for brands,” Bennett said.