04 Jun 2015 VideoBlocks
VideoBlocks is a stock footage company doing some very innovative business.
They sell “memberships” for unlimited access to the collection of 115,000 wholly owned video files, After Effects templates and audio files. This April they launched a marketplace open to external contributors, and accessible for purchases only by paying members. Because the company earns its revenue from the membership fees – 100,000+ people paying $99 per year – they can pay their contributors a royalty rate of 100%.
It’s a serious startup, having just closed its third funding round, consisting primarily of an $8 million “venture-debt deal”.
The Innovator behind VideoBlocks
Founder and CEO, Joel Holland, has an interesting story, detailed on the company’s about-us site. He started out selling video footage by eBay to fund the building of the footage that ultimately became the VideoBlocks collection.
He founded the company in 2009 and has since received a list of accolades both personally and for the company. He made BusinessWeek’s 25 Entrepreneurs under 25, Inc.’s 30 Under 30 list, “Young Entrepreneur of the Year” from the United States Small Business Administration, and “Entrepreneur of the Year” for the Greater Washington DC Region by Ernst & Young.
The company itself has also received a lot of recognition. In 2012 it entered the Inc.500 list, and was named #4 fastest growing media company by Inc. Magazine. In 2013 it reached 7,000% total revenue growth in 5 years, earning the 2nd place in the fastest growing tech company list for the DC area by Deloitte for Fast500.
Zach Bernstein heads up the marketplace business within VideoBlocks and is the contact for contributors.
Business Model Innovation
While the company itself isn’t new, the all-you-can-eat subscription idea is. Most are familiar with the concept via Netflix and Spotify, though VideoBlocks isn’t the only company trying to make it work in stock.
These days where so many companies are trying to compete but just being one of the players, or undercutting on price, it’s refreshing to see businesses like this trying something new.
The pricing model helps the company reach more price-sensitive customers, while also appealing to high-volume users. It’s this latter group who will make or break the marketplace project for the company, where they need to pay file by file. The prices are at a discount to average market prices: $49 for an average HD clip and up to $199 for full length 4K footage.
While the business model certainly puts downward pressure on price, the upside of 100% royalties can’t be ignored.
The video producers I’ve spoken to who are participating are certainly happy with the performance of the company so far.
Zach and his team have done a great job recruiting top non-exclusive video producers from the market already, counting among their early contributors Wavebreak Media, hotelfoxtrot (Helen Sarah Fields), and Pressmaster Production Studio.
Interested video producers can apply to contribute here.