BuzzShed Rides The Fail Train

buzzshed.jpgDespite local reviews claiming “NZ Firm Leads Online Video Advertising Revolution,” BuzzShed has slashed payments after discovering failed models don’t get any better with age.

The revolutionary model: pay users to watch advertising.

We’ve seen the model many times before. Web 1.0 delivered services like AllAdvantage and a sea of clones. More recently BrightSpot.TV launched then failed, despite some serious backing and a world of great intentions. Agloco never got off the ground.

Wellington, New Zealand based BuzzShed though is trying very hard to spin their trip onboard the fail train. Here’s some highlights from the press release they sent us today (with explanation). They receive top marks for 1st class spin:

BuzzShed is pioneering a new way to deliver online video, with the implementation of supply and demand pricing into its permission marketing based video distribution system. Today, BuzzShed announced the changes for both BuzzShed subscribers and advertisers, making an exciting new tool more accessible to small and medium sized businesses using online video as a promotion channel.

Translated: we couldn’t find enough advertisers so we’re cutting advertising rates

As a consequence of recent BuzzShed subscriber growth outstripping the growth in new advertiser accounts, BuzzShed has experienced an oversupply of new members. Accordingly, existing BuzzShed advertisers are taking advantage of the new market based pricing to promote videos to large audiences at low cost – as little as $0.05 per view.

Translated: we couldn’t find enough advertisers so we’re cutting advertising rates

BuzzShed CEO Hayden Saunders anticipates prices to rise as advertisers catch on to the new pricing model and frequently targeted subscribers increase their minimum reward amount.

Translated: we’re cutting the cost of advertising now because we think it will magically go up in the future by offering it for less now….ok, sorry, even I can’t make sense of that logic.

Mostly from North America, the United Kingdom and New Zealand, subscribers use BuzzShed to engage with advertisers exploring alternatives to mass media promotion. Significantly, this is not a video host that competes with video giants like YouTube; the company simply distributes links to videos already online.

Translation: we add some YouTube videos to the site to make it look better (the site also comes with “revolutionary” Digg style voting…it looks like a Pligg install)

While other companies offer various aspects of its service – BuzzShed’s advantage is its combined offering of permission marketing and direct marketing, and its unique pricing model.

yeah, ok……

The bonus takeaway: BuzzHead also comes with a classic pyramid referral scheme as well.