• by Wayne Friedman , May 21, 2007

A 5-month-old user-generated site has a unique but obvious approach to paying for user-generated content: Give the most watched the most money.

Spymac Networks--grown out of Spymac.com, a gossip site about all things Mac- and Apple-related--pays users for videos, based primarily on the highest viewership. In April, Spymac paid out $67,237. Since January, the company has paid content owners over $373,000.

Spymac's founders, CEO Holger Ehlis and Vice President Kevin April, say they do not accept any adult video or any copyrighted material. With these restrictions, they believe users will be producing their own material--especially with the incentive of getting paid. By also avoiding copyright material, executives believe it will not mire Spymac in treacherous legal issues that have plagued other user-generated Internet sites, such as YouTube.

The site has 5,000 and 10,000 unique videos being loaded per day, says April, with just over 1 million members--growing 30,000 to 50,000 members since its January launch. "It's not growing as fast as it should," he adds. "We are the best-kept secret." Canadian company Spymac is based in Lethbridge, Alberta.

Spymac funds this venture through in-house advertising, although executives didn't go into much detail about those activities. On its Web site, Spymac says it "offers geo-targeting, daily reporting, third-party ad-serving, and can accommodate a wide variety of formats and sizes." Some advertisers on the site include: Edmunds.com, South Beach Diet, and Dentalplans.com, among many others.

Ehlis and April don't compare themselves to companies like YouTube. Still, they say the difference is that YouTube decides which publishers get paid, while Spymac lets the viewers decide. Still, there is a filter of sorts at Spymac, with the popularity of videos decided by complicated mathematical algorithms.

To help boost viewership, Spymac gives its users a number of marketing tools--which at the same time also improve Spymac's traffic.

To combat the abuse of false viewership numbers, Ehlis says, "we try to block people from reloading pages." While Spymac discourages adult content, there is a fair amount of material of women in bikinis and the like--but no nudity.

Many other Internet content deals--ones made by traditional TV networks--are based on an ad-revenue-sharing model. Many deals give Internet video companies, like Joost, Veoh and Brightcove, 10% of those ad revenues with the TV network content provider keeping 90%.

Spymac is available in 18 languages, and has offices in the U.S., Canada and Germany.