[HN Gopher] Who Owns Nebula?
___________________________________________________________________
Who Owns Nebula?
Author : mintplant
Score : 242 points
Date : 2024-09-13 04:18 UTC (18 hours ago)
(HTM) web link (medium.com)
(TXT) w3m dump (medium.com)
| danpalmer wrote:
| Interesting analysis! From the facts in this post, I'd reach the
| following speculation: the creators have a contract that entitles
| them to vote on certain types of company action, a share of 50%
| of the revenue, and potentially representation of their votes in
| the form of one or two of the existing board seats. Essentially
| there being some company bylaws in place to enact that
| "ownership" mechanism.
|
| This would match what Standard have said about the setup, would
| match the Wendover documentary and its reference to "wizardwry"
| making it all work, and provide for input from creators and
| revenue to creators. Combining this with the phantom stock and
| how a sale would be handled, I think calling this "ownership"
| when summing it up in a single word for the purposes of a YouTube
| advert is... uncontroversial?
|
| The alternative would be having each creator on the cap table,
| and my understanding is that is actually quite tricky to do at
| scale, and brings significant legal and tax implications for the
| creators and Nebula.
|
| While this is all very interesting, and I appreciate the blog
| post, I do wonder if the answer here just boring.
| moi2388 wrote:
| That might very well be the case. It would probably be more
| honest to give the content creators stocks or say "partly ran
| by content creators" instead of "owned by content creators" in
| this case, no?
| derefr wrote:
| The problem with that is that if you truly _own_ something,
| you have the right to _sell_ that thing, and nobody can say
| who you can sell it _to_. Give it six months and it wouldn't
| be "creator-owned" any more, due to cash-strapped creators
| dumping stock for a payday.
|
| A co-op is structurally as much about ensuring that employees
| can't transfer their equity to non-employees as it is about
| ensuring that employees have equity. You can't get the
| semantics of a co-op ownership structure just by doing
| regular things with a C-corp; you need extra hacks, like
| these bylaws.
| danpalmer wrote:
| That might be the ultimate version of "ownership" but it's
| by no means the only useful version. Startups typically
| issue shares or options but restrict selling of them. Does
| that mean you don't own them? Well it's complicated, but in
| my opinion it's far more useful to say that yes you do own
| them than no you don't. I as an employee of a public
| company receive compensation in the form of shares, but I'm
| only allowed to sell them at certain times of year, do I
| not own them? Again it's more realistic to say I do. I also
| don't get to vote with mine, as is the same for other non-
| voting shares that are fairly common.
|
| Ownership is a nuanced concept, and taking a hard line on
| just one feature of ownership is not necessarily the right
| choice in general discussion.
| surgical_fire wrote:
| I never took options in compensation packages as
| "ownership". I just see them as fancy mechanisms to give
| you the potential for more money without giving you more
| money outright.
|
| In the case of startups, which are not yet public
| companies, even less so, as those shares can be dilluted,
| etc.
|
| In the case of public conpanies I see them much in the
| same way I see shares of conpanies I buy in the stock
| market. I have no meaningful ownership of the company in
| those cases, it is just where I park some money looking
| for a return in investment.
|
| A coop is actually a form of ownership, even if
| ironically you can't sell that ownership.
| PawgerZ wrote:
| > Startups typically issue shares or options but restrict
| selling of them
|
| They have to explicitly restrict selling of the shares
| through contract means. That's because ownership is the
| legal right to possess, use, or give away (sell) a thing.
| Likewise, Nebula has to explicitly restrict selling of
| partial ownership through contract means.
| derefr wrote:
| Ownership of private property (abstract or concrete) is a
| _formal, legally-defined_ concept -- and "do you have
| essentially sovereign authority over the disposition of
| the asset" is always at the core of it.
|
| No, you don't own stock when you own stock options. A
| stock option is a _right to purchase stock at a
| particular price_ , and you _own_ that _right_. Just like
| owning, say, an easement on a piece of land, doesn 't
| mean you own the land. (And both a stock option and an
| easement have a _value_ , and you may be able to sell
| _those things themselves_ -- but the value they have, and
| their sale price, is often disconnected from that of the
| underlying asset the right exercises against.)
|
| You know how you can very easily tell when you own
| something? Because governments almost always _tax_
| transfer of _ownership_ of a thing. You don 't pay taxes
| when you acquire options, because you haven't yet
| acquired ownership over anything. You _do_ pay taxes when
| you exercise those options -- exercise that right to
| acquire stock at that price -- because now you _do_ own
| something you didn 't before.
|
| Another way to tell that you own a thing, is that you
| have the ability to directly pledge that thing as
| collateral on a loan. You can pledge stock, but you can't
| pledge options[1]. This is because you can _contractually
| grant_ the bank the ability to confiscate your stock in
| event of default on the loan, in a way that _guarantees_
| that they will _succeed_ in this confiscation. But you
| can 't contractually grant the bank the ability to
| confiscate your options, in a way that is _guaranteed to
| succeed_.
|
| And that's for exactly the reasons you outline: there may
| be contractual stipulation on the exercise of the
| options, that mean that the bank can't immediately
| liquidate the options, and thereby can't balance the
| loss-of-lendable-assets coming from your default and/or
| might risk the company's share-price falling, or even the
| company going bankrupt, before the options may be
| exercised.
|
| Also, sometimes the bank wouldn't _want_ to exercise a
| contingent asset they 've acquired, but just wants to
| sell that contingent asset on to someone else who wants
| to hold and exercise it at a future date. ESOPs in
| particular usually have voidability clauses that say that
| not only can't you transfer the option, you can't even
| build a financial instrument around the option that _has
| the semantics of transferability_. Banks very much do not
| appreciate restrictions like that.
|
| ---
|
| [1] Yes, you can show your holding of options as a
| _demonstration of assets_ , to increase the amount a bank
| is willing to lend you. But this, like any other
| demonstration of assets -- e.g. a demonstration of
| employment, or of ownership of revenue-generating assets
| -- goes into a Net Present Value-adjusted future-cashflow
| projection calculation that the bank does, to determine
| how likely you will be to be able to make your _regular_
| loan payments when everything is going _well_ for you. In
| the breach, they still need collateral to be pledged out
| of stuff you actually _own_ -- i.e. can guarantee them
| the right to as a creditor.
| BlindEyeHalo wrote:
| The way I understood it is that the 'stock' you 'own' is
| proportional to your viewer count, which is not something you
| can do if you would actually give them stock.
| Dextro wrote:
| I think the issue is that the marketing is a half truth.
| Standard is in fact majority owned by content creators, it's
| just that the marketing makes you assume that the creator
| saying the line is the owner when that might not be exactly
| the case.
|
| Honestly Nebula always felt off to me because of this
| marketing. They never sold it as a place where creators had a
| more equitable share, or where they had more creative freedom
| and control (which seem to be true), but they used the idea
| that they were "fighting the man" by going at it alone. It
| always felt like a half truth which, turns out, it is.
|
| Also the price always felt too good to be true to me so I
| always suspected some sort of investment from somewhere to
| create a loss leader. Though the jury's still out on that.
| But having worked on video streaming online myself I know
| first hand how expensive it can get so I wonder how
| profitable the company is.
| wodenokoto wrote:
| I don't know about American coop laws, but in Denmark there are
| diary companies owned by farmers (nearly 10.000 farmers own
| Arla) and Coop Amba, which owns many super market chains have
| over 2 million members, that each have a voting right in the
| company.
|
| You can totally scale this type of ownership.
| danpalmer wrote:
| I'm not an expert by any means, but my understanding is that
| partnerships are very different legal entities to a typical
| US LLC. I believe a partnership is typically in many ways
| closer to what I suggested may be the case with Nebula -
| where the company has bylaws and contracts in place
| internally to make this work. On the other hand for an LLC,
| LTD, or other similar types of company, being a shareholder
| is a more public position, and might require reporting, or
| updating documents registered with the local government every
| time it changes. That's fine for tens of shareholders in a
| private company, but not for thousands or millions.
| SamWhited wrote:
| In the U.S. it really depends what state you're in. Some
| states have co-ops as a specific business vehicle and in many
| of them the co-op model is very different. There are big farm
| co-ops, EMCs, etc. in the U.S. (Land-o-Lakes and Florida
| Natural Oranges come to mind, I believe they're both fully
| farmer owned), but I'm not super familiar with them or how
| their model works, but in Georgia where I am at least co-ops
| tend to work in one of two ways:
|
| For smaller co-ops that don't bring in members very often or
| who are just getting started they often create an LLC and put
| in the articles of incorporation that all future members will
| receive an equal share and equal voting rights. This does
| require filing paperwork for every new member, but keeps
| taxes easy.
|
| For co-ops that expect to have lots of members rapidly
| (consumer co-ops that sell shares in their store to whomever
| wants one, for example) they normally form a corporation and
| allocate a certain number of shares up front and indicate
| that any member has equal voting rights, etc. this makes the
| taxes harder, but is a lot less paperwork since you have to
| file stuff about the number of shares sold at the end of the
| quarter (or whenever, I forget the exact reporting details,
| been a while since I've done this) but not every single time
| you add a member.
|
| Georgia (and a lot of other states) also have specific laws
| for EMCs and other specific types of co-ops, so it's really
| fragmented. Take this with a grain of salt, it's just two
| examples of how a lot of smaller co-ops do things.
| sitharus wrote:
| It's definitely an interesting solution to a very similar
| problem I was looking at a few years ago - how to take on
| external investment in a co-operative company.
|
| I'm not in the US, so I can't comment on the options for
| Nebula, but where I live coops are a specific type of legal
| company which would encompass what Nebula want - a company
| where profit is divided between members in proportion to their
| contribution. As part of that the only owners allowed are
| contributors, and the only people who can receive a profit
| share are the owners. If you want to stop contributing you have
| to stop owning, and there's no value to the shares.
|
| So you can't take on equity funding, only debt.
|
| This structure seems to be made to work around that,
| structuring it like a regular stock company but with a sale
| trap to make it unappealing to sell for a quick return.
| jszymborski wrote:
| > So you can't take on equity funding, only debt.
|
| Is this a huge problem?
| jasode wrote:
| _> Is this a huge problem?_
|
| It depends on what the company is trying to build.
|
| The dollar amount of debt a company can take is _limited by
| its revenue_ because it requires ongoing payments to
| service that debt. Whether it 's debt from a bank business
| loan or by issuing corporate bonds, they both require real
| revenue to make those payments.
|
| Equity investments don't have a ceiling capped by the
| company's present day earnings. This is important if the
| company has ambitions to build something that can't get any
| meaningful revenue on day 1. Instead, they need the money
| to pay salaries, cloud bills, office rent, etc to build the
| product and hope the later revenues will justify the
| investment. E.g. the early Google startup in 1998 took $25
| million VC investment and didn't have meaningful revenue
| until +4 years later in 2002. A company with $0 revenue
| can't get a $25 million loan with a 4-year deferred payment
| plan. Yes, there's such a thing as "convertible debt-to-
| equity" but that's a financial vehicle for investors that
| doesn't apply to co-operatives.
| csomar wrote:
| > a share of 50% of the revenue
|
| According to the blog post, they get 50% of the _profit_ which
| would be much lower than 50% of the revenue. This is worse than
| other profit-sharing platforms. But hey, you own 50% of a
| shadow equity or whatever that means.
| paxys wrote:
| The big source for confusion IMO is that there is no single
| universally-understood definition of "creator". The site was
| founded and is controlled by ~6 people who create content for
| YouTube and other platforms. So does that make Nebula "creator-
| owned" by default? Or does _every_ content creator on the
| platform have to have some form of ownership? And then does
| that ownership have to be equitable? Or will one token share
| with no voting or profit share still qualify?
| mrgoldenbrown wrote:
| Any confusion is Nebula's fault by keeping the details of
| ownership secret. They could clarify what they mean when they
| claim in bold on their front page that "Nebula is creator-
| owned and operated."
| prithvi24 wrote:
| Honestly, I feel like the criticism is missing some key points.
| Sam and the other founders are creators who've put a ton of work
| and resources into Nebula. They've made awesome original content
| like Jetlag and have invested heavily to support other creators
| on the platform. Nebula gives budgets for creators to produce
| their own shows, and they get a share of the revenue from
| subscribers they bring in--I wouldn't be surprised if they earn
| from views too. So saying it's misleading doesn't sit right with
| me. Creators on Nebula definitely get a bigger piece of the pie
| compared to other platforms. It might not be a perfect co-op, but
| it's way more creator-friendly than most out there.
| gautampk wrote:
| It /is/ misleading to say or imply that it is a co-op, though.
| It isn't. It may be a progressive company which provides very
| favourable terms to creators, but it isn't a co-op.
| prithvi24 wrote:
| Yeah, I see your point--it might be misleading to label
| Nebula as a co-op since it technically isn't one. But I think
| what's important is how much Nebula does to empower creators
| compared to other platforms. The founders are creators who've
| invested a lot to make it a place where content makers get
| more support and a bigger share of the revenue. Even if it's
| not a co-op, it still feels like a step in the right
| direction for giving creators more control and benefits than
| they'd get elsewhere.
| dmazin wrote:
| Oh, good comment.
|
| After reading the article, I walked away with "well, they
| were vague about the terms, but the real terms sound fine to
| me."
|
| But your comment changed my mind somewhat: it definitely
| isn't a co-op, and the "creator owned" language is
| misleading.
| paxys wrote:
| None of what you say is being debated. What is being debated is
| the fact that they market themselves as a creator-owned co-op
| (which is incorrect and borderline fraudulent).
| richardwhiuk wrote:
| For most respects and purposes, Standard Broadcast is the
| creators on Nebula.
| JumpCrisscross wrote:
| > _For most respects and purposes, Standard Broadcast is the
| creators on Nebula_
|
| Then why shell them into a separate vehicle?
|
| The purpose is to create two tiers of creators. That's fine.
| Some took a risk. Others didn't. But it's dishonest to then
| claim one is being transparent when the only reason for this
| structure, apart from incompetence or convenience, is
| obfuscation.
| pikminguy wrote:
| It's kind of a historical happenstance. Standard was created
| first as a company offering support services for creators.
| Nebula was one of Standard's offerings which grew to be the
| main thing.
| weinzierl wrote:
| That was my thinking as well and unfortunately the article
| doesn't go into that direction. For example: Do we know how
| many _creators_ they have. Do they all have the same contracts
| and rights or are some of them just (affiliated) "creators".
|
| To put this to an extreme: If only the six owners were creators
| they could claim 100% goes to the creators without lying.
| JumpCrisscross wrote:
| Real Engineering did a video titled "How Nebula Works" [1]. It
| details the technical problems. But seemingly deliberately dodges
| the legal and financial questions I clicked on that video to
| answer.
|
| I love Nebula. But it's obvious that there is a shady component
| to their structure that prevents transparency that senior
| leadership knows about and knowingly obfuscates. I'm not arguing
| for a creator-owned co-operative; that would render the equity
| worthless, and they want (and should) retain the option to sell.
| But Nebula _et al_ made a big fuss about refusing VC because of
| the incentives that creates while legally creating a two-tier
| structure that mimics those same incentives.
|
| [1] https://nebula.tv/videos/realengineering-how-nebula-works
| chrisoverzero wrote:
| You clicked on a video from _Real Engineering_ titled "How
| Nebula Works" hoping to get answers to legal and financial
| questions? I think videos with titles like "How Internal
| Combustion Engines Work" would also deliberately dodge legal
| and financial questions. Because they're not what the video is
| about.
| WorldMaker wrote:
| The creator of the channel Legal Eagle is also one of the six
| main Standard Broadcast owners (with Real Engineering)
| mentioned in the article, so it sounds like we are waiting
| for the Legal Eagle "How Nebula Works" video.
| ehhthing wrote:
| I think the last few paragraphs go off the rails. If creators
| didn't own (at least in some way) some controlling stake in
| Nebula, why would they publicly say that they do? Moreover, why
| would creators join Nebula if the terms were not beneficial to
| them in the first place?
|
| I find it funny that the author writes
|
| > It's equally possible, however, that the system was set up in
| order to keep any meaningful power away from the creators.
|
| Does the author really think that the chance that _all_ of these
| creators are lying to their audiences is just as likely as them
| all telling the truth?
|
| Also, the author even admits
|
| > As I mentioned previously, some ownership of Standard has since
| been offered to other creators through stock options, but it's
| unclear how much or what type of stock those options represent.
|
| Owning equity (and thus voting power) in Standard also means that
| the creator has the ability to vote on how Standard operates
| Nebula. So the conclusion that the creators have no control over
| Nebula literally cannot be true. So the statement that "the
| creators own 0 percent of Nebula" is just misleading, and yet
| this is somehow the important conclusion that the author wants
| readers to know...?
| SpicyLemonZest wrote:
| The author's thesis is that the creators are being tricked.
| They own some complex bespoke right in Nebula ("an entirely new
| kind of cooperative corporate governance"), which they're told
| and believe is equivalent to ownership, but actually it's a
| sham that will break down if Standard ever wants to do
| something that isn't in the creators' interests.
| ehhthing wrote:
| The author doesn't go through this in nearly enough detail to
| make that argument convincing. Rather than spending the
| entire time trying to find what the "real" ownership amount,
| the author should've spent the time contextualizing the
| situation.
|
| The author basically spends the entirety of one sentence
| dismissing the idea that there could exist a corporate
| governance model that allows creators to have a meaningful
| way to direct the company's decision making process and
| spends the rest of the time on a wild goose hunt to figure
| out the "actual" ownership percentages.
|
| It was pretty obvious from the beginning given the repeated
| mentions of complex ownership models that the "real" numbers
| were not going to mean that creators owned "real" equity in
| the company. An investigation about what this actually means
| would've been a much better way to write this kind of essay.
|
| Instead all we got was a long article with a conclusion that
| was reasonably obvious in hindsight, and no real evidence to
| support the thesis that "it's all just smoke and mirrors".
| SpicyLemonZest wrote:
| I don't agree that was obvious in hindsight. I was familiar
| with Nebula before this article and I had always understood
| it to be something like a co-op where creators and only
| creators had genuine equity. When reading the first bit, I
| assumed as the author did that it must be something where
| the co-op owns a controlling share in some underlying
| company.
|
| The conclusion that there's nothing like a co-op at all is
| not what I would have expected and I really think does
| suggest that it's all smoke and mirrors. If this
| "ownership" doesn't consist of anything more than a right
| for creators to be paid based on their view counts, isn't
| it just a YouTube contract with extra steps?
| weinzierl wrote:
| _" The author's thesis is that the creators are being
| tricked."_
|
| The author says: _" Unfortunately, without access to one of
| their contracts, we can't know for sure what power the
| broader group of creators actually has."_
|
| While the accusation of the creators being tricked might be
| between the lines[1], I think the more direct accusation is
| the subscribers being tricked.
|
| The subscribers are made to believe:
|
| 1. the creators get 50% of Nebula's profit
|
| 2. their money goes into a co-op of creators
|
| 3. Nebula hasn't taken VC money
|
| My reading is that the author claims, that only the first
| point is true.
|
| [1] To the best of my knowledge, none of them has come
| forward with any accusations. On the other hand, we probably
| only should expect this to happen once Nebula gets in trouble
| or is actually sold.
| Tarq0n wrote:
| The creators are desperate for a hedge against Youtube, which
| unilaterally controls their compensation and can deplatform
| them at any time.
| dmazin wrote:
| I agree - the investigation is thorough, but I think the
| conclusions are a little jumpy.
| ParadisoShlee wrote:
| You're saying standard has the fiscal responsibility of their
| entirely company?!
|
| Give dave an award for being awesome and running a successful
| company with a single investor.
| rambobambo wrote:
| How to create a similar site for my local community?
| felurx wrote:
| Do you mean a video sharing site? Maybe self-hosting PeerTube
| might be something for you. It's designed with federation (with
| other instances via ActivityPub) in mind, but the FAQ say that
| can be disabled. Of course, there probably are other software
| projects (like maybe DTube) that have different priotities and
| ideas, might be worth a bit of research.
| LammyL wrote:
| This corporate structure seems a bit sketchy for creators if the
| platform wants to sell. If they sell Nebula then creators split
| half of the profits. If they sell Standard then creators get
| nothing.
| cruffle_duffle wrote:
| Why would Standard get sold though? The value to a buyer is
| nebula. In fact perhaps they intentionally structured things so
| as to detach Nebula from Standard to make it easier to spin
| off.
| jiveturkey wrote:
| > It's possible that the terms are so favorable for creators that
| their shadow equity is as good as actual ownership. It's equally
| possible, however, that the system was set up in order to keep
| any meaningful power away from the creators.
|
| I very much suspect the latter. Otherwise why be so circuitous
| and secretive about it.
|
| I've never heard of shadow equity before. But clearly it isn't
| equity, ie it isn't ownership. So it almost certainly has no
| governance rights. Now it may entitle the creators to 50% in the
| event of a sale, but who's to say it's Nebula that's sold, vs
| Standard, and who's to say it's sold at all. Rather the standard
| (excuse the pun) approach of selling off the assets without
| selling the company.
| timenova wrote:
| While their corporate structure is shadowy, their revenue
| distribution between creators is not. The source for this is in
| this video [0][1] by TLDR Business.
|
| Essentially, all the money collected by subscriptions is paid to
| creators based on the number of views on their videos.
|
| [0] https://nebula.tv/videos/tldrbusiness-how-does-tldr-
| really-m...
|
| [1] https://www.youtube.com/watch?v=clfti6Do9lc
| weinzierl wrote:
| _" On August 23, 2021, the Company purchased a 12% ownership
| interest in Watch Nebula LLC for $6,000."_
|
| Surely this must be 6 million USD. I first thought this is a
| typo, but it is like that in the original SEC filing. Is this
| some convention I am just oblivious about?
| noname120 wrote:
| From the SEC FORM D[1]:
|
| > Total Amount Sold $6,000,000 USD
|
| You're referring to the note 2 of the prospectus supplement no.
| 12[2]. It indicates the following at the top of the notes
| section:
|
| > (in thousands, except share and per share data)
|
| [1]
| https://www.sec.gov/Archives/edgar/data/1881238/000188123821...
|
| [2]
| https://www.sec.gov/Archives/edgar/data/1776909/000121390021...
| WorldMaker wrote:
| A lot of Corporate financial reports have a baseline of $1k,
| $10k, $100k or sometimes even $1 million that their figures and
| charts never have reason to drop below (or are just taken as
| rounding errors) anywhere in the report and so they just
| establish the baseline early in the report and all numbers are
| relative to that. It seems like Curiosity Stream's report was
| using a $1k baseline and you just multiply all the financial
| numbers by 1,000.
| stuaxo wrote:
| When it comes to a democratic cooperative, how does this compare
| to say Mondragon ?
| eterevsky wrote:
| To summarize, 17% is owned by Curiosity Stream, the rest by
| Standard Broadcast which in turn is owned by Wendover Production
| and some other creators.
| blagie wrote:
| This is approximately what I figured. Whenever I do deeper due
| diligence, this sort of scam comes up. Literally "whenever."
|
| For the record, Nebula is primarily owned and operated by
| creators. Those creators are:
|
| * Dave Wiskus
|
| * Brian McManus (Real Engineering)
|
| * Alex (LowSpecGamer)
|
| * Devin Stone (Legal Eagle)
|
| * Thomas Frank
|
| * Sam Denby (Wendover Productions)
|
| The other creators are getting scammed.
|
| This is not an uncommon model. This is almost identical to how
| edX was structured and the marketing literature is nearly
| identical too. It was owned and run by universities. Just not the
| universities who made up the "consortium."
|
| If there were no scam, there would absolutely no reason for the
| non-public non-answers. If Nebula weren't scamming, they would
| disclose the "financial and legal wizardry."
|
| None of this prevented me from giving Nebula money. As I said,
| this kind of issues comes up literally every time I do due
| diligence. I am disappointed in specifically Brian McManus for
| being involved in a scam, but this kind of scam is omnipresent
| with quite literally every organization I've done due diligence
| on, and usually much worse.
| staunton wrote:
| I don't understand what the scam is.
|
| The structure is opaque which indicates there might be some
| scam but how would one know what it is?
| jszymborski wrote:
| The accusations of it being a scam are speculative for sure,
| but they come from a relatable place: the inability to
| understand why creators would agree to take on "shadow
| equity" while a small handful of creators get actual real
| equity.
|
| It sounds like a few creators can sell the equity that is
| built by many creators at any time, but that all the other
| creators can only realize their equity if and when the
| company exits.
|
| If someone bought tickets to a steam ship that stipulated
| that in the event of an imminent iceberg collision, they can
| only get on the life-boats after a small group of people
| ransacked the ship and left on the first life-boat, I might
| assume that they'd been scammed to. But perhaps they were
| just desperate or didn't think icebergs were a risk.
| Regardless, I just know I wouldn't buy that ticket.
| Dylan16807 wrote:
| I can't really figure out how the stakes of your analogy
| are supposed to map to the Nebula situation. Nebula is a
| source of income. If it implodes, everyone still goes home.
|
| And who would be buying shares if the company is sinking so
| badly? How does the ransacking work in the analogy, and
| does it even make a difference?
|
| The part that sounds scary is that they're on the "first"
| life boat and everyone has to wait until "after" they're
| done ransacking, and that part doesn't sound like it maps
| to the real world at all.
|
| But backing up to the more general sense, shadow equity is
| a reasonable way to do the profit sharing but you have to
| have real equity somewhere. Accepting that there are two
| tiers makes sense to me. And the reason it's a "small
| handful" with the realer equity is because those people
| either _built_ the company or _paid lots of money_ to the
| people that built the company, that 's pretty fair.
| hollerith wrote:
| >a few creators can sell the equity that is built by many
| creators at any time, but that all the other creators can
| only realize their equity if and when the company exits.
|
| That's misleading because an exit (i.e., a sale or an IPO)
| is usually the only way that owners of _real_ equity in a
| startup can cash out.
| blagie wrote:
| Nebula advertises itself: "Nebula is creator-owned and
| operated" (implying the creators who publish). A lot of
| people subscribe in order to support creators, as a sort of
| alternative to Patreon.
|
| This is not the case. It is owned and operated by the
| founders and some investors.
|
| If someone donates believing they're supporting Extra
| Credits, Practical Engineering, or a similar channel, they're
| likely being misled about how much they're contributing to
| it. Indeed, they may believe they're supporting a creators'
| co-op, which they're clearly not. If Nebula sinks, the
| support is what they expected. If it swims, it's going to be
| a lot less.
|
| I consider this to be tantamount of fraud. That's as much a
| statement about myself as about Nebula. My standards for what
| constitutes fraud are much lower than e.g. the FTC's.
| However, I (again, personally) believe that if the FTC shared
| my standards, the economy would be more efficient and the
| world would be a better place. That is a personal opinion,
| but researched, and based on the work of David Landes (a
| well-regarded economist at Harvard, who had nice work about
| the role of social capital in economic growth).
| xd1936 wrote:
| You used the word "scam" six times in your comment. That is a
| bit exaggerative of the actual company structure. Creators are
| getting paid to put various forms of exclusives on the
| platform. Just because the company uses a disingenuous term to
| market itself doesn't mean that said creators are all victims
| here.
| blagie wrote:
| I don't know whether creators are victims (although I suspect
| they are), but I do know people who pay for altruistic
| reasons are victims. It's not billing itself as Disney Plus
| but specifically as a way to support creators and support a
| service for-creators/by-creators.
|
| That, it's not.
|
| As a footnote, this also explains why channels like Wendover
| are promoted so strongly by Nebula over, quite frankly,
| better content.
| kragen wrote:
| i'm disappointed in brian mcmanus every time i watch a 'real
| engineering' video and find out that it's full of factual
| inaccuracies, like all the previous 'real engineering' videos i
| watched. you'd think i'd learn, but i keep confusing him with
| 'practical engineering', which is actually real
| cruffle_duffle wrote:
| Was going to say... I love the practical engineering channel
| but that channel doesn't really dive deep enough into any one
| topic to encounter any factual inaccuracies.
| kragen wrote:
| admittedly, it does fall far short of being practical; if
| your preparation for building a railroad is watching
| https://www.youtube.com/watch?v=zqmOSMAtadc and your
| preparation for building a landfill is watching
| https://www.youtube.com/watch?v=HRx_dZawN44, your trains
| will derail and your garbage will leach into your
| groundwater
|
| but that's not really a difference between the two
| channels; real engineering manages to pack plenty of
| misstatements into videos that are equally superficial
| blagie wrote:
| I find Real Engineering to be pretty good for aerospace, and
| horrible for everything else. There are errors, but no more
| so than any other resources I've seen on aerospace.
|
| The problem I have is that it's trying to do electronic
| engineering, fusion, and now history. The worst is interviews
| / human interest / travel / behind-the-scenes, etc. My
| question is always: Why? Why do you think you're at all
| qualified to do a better job than the people who specialize
| in this?
|
| If I had a choice, the Nebula-exclusive content would go more
| into math or deeper engineering: How does a jet engine work?
| That kind of thing.
|
| But yes, Practical Engineering is very, very good.
| bogtog wrote:
| > Shadow Equity (sometimes called Phantom Stock) isn't real
| stock. It's basically just an IOU that's worth the same dollar
| value as the actual stock. The creators will get paid 50% of the
| proceeds in the event the company sells, but legally they don't
| actually own any of the company.
|
| To my untrained eye, this just seems like owning stock without
| voting privileges, which seems okay? Is the fear that the voters
| will eventually just change the creator profit sharing to zero
| and milk the company dry rather than selling it?
| maweki wrote:
| > seems like owning stock
|
| Shadow Equity usually doesn't pay dividends. So if the stock
| devalues due to payed out dividends (and the shadow stock has
| no voting power), it's the creators paying out the investors
| from their share.
| nottorp wrote:
| ... and why is it called the same as the Nebula Awards?
| runnr_az wrote:
| The term is nebulous
| jamesholden wrote:
| I was thinking about joining them to try it out.. but now I feel
| yucky.
| drclegg wrote:
| Even with this obfuscation, it is still more fair to its
| creators than most other platforms. It's just not quite the co-
| op structure their marketing makes it out to be, which is
| indeed disingenuous (IMO).
| astura wrote:
| TL;DR:
|
| 1) a group of content creators created a company
|
| 2) that company runs a streaming platform where they also allow
| outside content creators to use with (at least) a profit sharing
| agreement that includes ongoing profit as well as profit from the
| a sale of the company, should they sell it.
|
| 3) that platform also took in a single minority investor at some
| point
|
| 4) some rando on Medium is getting wrapped around the axle
| because they think the outside creators are calling this
| "ownership."
| yaur wrote:
| One has to wonder if the creators got 50% of the sale to
| curiosity stream.
| jszymborski wrote:
| I'm cancelling my subscription.
|
| I was always suspicious of the "50:50 SB/Ceator" deal. The real
| way to do something like this imho is via a cooperative, with
| investors like CuriosityStream and SB providing capital loans.
|
| That said, the "ownership" claim is apparently provably false and
| I've been lied to. The company has operated dishonestly, and
| frankly the biggest reason I had a subscription was because of
| what I thought was an equitable ownership structure for creators.
| armoredkitten wrote:
| To me, there's no evidence in any of this that would indicate
| the _creators_ are misinformed or being scammed. In reality,
| they know their primary source of revenue is coming from
| Youtube, and it is a frequent complaint, especially for content
| creators who do anything marginally political or controversial,
| that they are demonetized or hit with copyright strikes (even
| in clear cases of fair use) and have to deal with the faceless
| Google behemoth trying to reverse these automated decisions.
| The end result of all this is that their revenue stream is
| unstable, and they are reminded of it frequently.
|
| To me, the fact that many of them clearly find Nebula a more
| suitable arrangement for them is still an indicator to me that,
| if I want to support the creators, Nebula is a better way to do
| that. Obviously, you can make your own decision on that, and
| sure, if you feel lied to, I can appreciate being upset about
| that. But maybe most of these content creators are less
| concerned with the ownership (they get 0% stake in Google,
| after all) and more concerned with the profit sharing
| arrangement. If so, I'm still happy to support them in that.
| jszymborski wrote:
| I never said they were scammed, but I was indeed misled by
| dishonest marketing, and frankly I think creators are also to
| blame for spouting lies about ownership.
|
| I supported Nebula because I think a creator's co-op is a
| beautiful project. I was willing to compromise on the co-op
| idea when I thought it was a 50:50 ownership structure but
| this is nothing close to equitable in my mind.
|
| I'll spend the money I save on Nebula on monthly donations to
| creators. I look forward to supporting a creators co-op if a
| promising one is ever made.
| tredre3 wrote:
| > I'll spend the money I save on Nebula on monthly
| donations to creators.
|
| You'll split your 3-6 dollars between multiple people? So
| that after fees they'll each receive a dime?
| jszymborski wrote:
| I'm currently supporting two creators on Patreon and I'll
| likely up my donation to them by 3 USD each.
|
| I'd rather be supporting the creator's co-op I thought I
| was, but I'll have to settle for this until that exists.
| paxys wrote:
| Whenever someone answers "it's complicated" to what should be a
| simple question, you know there's a scam involved.
| guipsp wrote:
| Why is this person who, as far as I can tell, is not, has never
| been, or has any intentions of being a creator on nebula
| complaining that creators are being screwed over? Surely if you
| were going to publish this piece, you'd get the opinion of at
| least one nebula creator?
| runnr_az wrote:
| Yeah... Doesn't seem fair to imply that it's a big secret if
| you don't ask.
| paxys wrote:
| TL;DR
|
| Nebula is a streaming service.
|
| It has a parent company (Standard Broadcast) which owns $83% of
| the service and has 3 out of 4 board seats.
|
| An external public company (Curiosity Stream) owns the remaining
| 17% and 1 board seat.
|
| Standard Broadcast is owned by 6 individuals, some of them
| popular YouTubers.
|
| Content creators who post on Nebula get 50% of the service's
| total profits (based on watch time).
|
| Content creators (other than the 6 mentioned above) don't own any
| shares in Nebula, but if the service is ever sold, they get 50%
| of the proceeds from the sale. This doesn't, however, apply to
| Standard Broadcast or Curiosity Stream, which can and are
| sold/traded independently.
|
| Whether Nebula is "creator-owned" or not, as they proudly
| proclaim front and center on their website and marketing
| materials, is left as an exercise for the reader.
| ryzvonusef wrote:
| You have two paths for a paid youtube competitor: ____
|
| 1- Bulk Purchase, like Nebula (Sam from Wendover and other fellow
| youtubers); One subscription buys you access to ALL the channels
| in the network.
|
| Pros:
|
| * Single payment for users
|
| * gets better as more creators join
|
| * usually discounted if you consider per-channel cost
|
| Cons:
|
| * requires trust between the creators
|
| * can cause clash between creators on division of funds
|
| * requires a certain minimum output to maintain basic service
|
| * one cancelled creator can sink the service
|
| ____
|
| 2-Per-channel subscription, like Floatplane (Made by Linus from
| the LinusTechTips channel); You have to pay seperately for each
| channel you want to get access to.
|
| Pros:
|
| * Can be cheaper if you only want access to a couple of specific
| creators
|
| * creators are not dependent on each other to maintain the
| service
|
| * you are seperate from other creator drama somewhat
|
| Cons:
|
| * Can become costly quickly if you want to subscribe to multiple
| creators
|
| * not that competitive with youtube premium
|
| * can cause comparison strife between creators for difference in
| subscription fee
|
| * can't take advantage of the synergist effect.
|
| _____
|
| Basically Nebula has the advantage of having many high profile
| creators, and if you have a smaller following, you can take
| advantage of the rising tide and get a boost from them by joining
| the service.
|
| Also, Nebula seems to have ~ 50-ish creators from some pretty
| diverse set of topics, so it's not pigeonholed as Floatplane.
|
| Buuuuut...it's unsustainable I feel. As the number of creators
| increase, the disparity of what each creator brings and what they
| are owed will be unteneble.
|
| --
|
| Floatplane, OTOH, has half the number of channels as Nebula, and
| they are mostly tech friends of Linus, so it's not only
| pigeonholed, but overshadowed by the anchor store that is LTT.
|
| By having seperate silos, you are unlikely to catch the wake of a
| rising ship to boost yourself.
|
| However, I feel that by cutting money out of the equation
| (Floatplane gets a fixed cut, rest, you earn of your own merits)
| it is in theory more sustainable; you have your own silo, and if
| one is sinking, you are not concerned.
|
| Also, there is a gun channel on the website, and they are there
| because they are tired of the censorship from Youtube. Being free
| from drama is a plus...don't subcribe if you don't want to watch!
|
| but not that free; they are still bound to the whims of payment
| processors, so if VISA/MASTERCARD/Whatever block them, they are
| SoL.
|
| They are not Only Fans level of free.
|
| ___
|
| TBH, it's a pain to get people to pay, the friction is just too
| high. Nebula makes it easier than Floatplane, on the onset, even
| if it's not the best choice. But since when have people used
| logic where money is concerned?
| NoGravitas wrote:
| I've long had the feeling that Nebula was kind of sketchy, ever
| since they kicked out J.T. (Second Thought), a founding member.
| I'm glad it's working out for Philosophy Tube and Jessie Gender,
| but I will not be surprised at all if there's not a total rug-
| pull some time in the future.
| xd1936 wrote:
| > Nebula the business is "Standard Broadcast LLC," and is
| directly owned at the LLC level by me and 43 other creators (and
| growing).
|
| > Nebula the streaming video service (which controls the
| streaming revenue) is Watch Nebula LLC, which is about 83% owned
| by Standard Broadcast LLC, with the rest held by Curiosity
| Stream. All control and all board seats belong to Standard
| Broadcast LLC.
|
| > We use shadow equity for platform creators because assigning
| LLC-level equity would make signing new creators logistically
| impractical, and would have complex tax implications for every
| creator we bring in. US securities laws also are skewed in favor
| of the wealthy: it would be very expensive or potentially
| impossible for us to comply with them if we were issuing
| securities to small creators who aren't accredited investors.
|
| > If substantial control of the streaming service ever changes
| hands, we are contractually required to split the proceeds 50/50
| with the creators on the platform. 50% of streaming profits are
| distributed to creators based on watch time. Additionally, 1/3 of
| the revenue from any subscriber is allocated to the creator
| responsible for bringing in that subscriber.
|
| > Weird that he didn't just ask.
|
| -- Dave Wiskus, CEO of Nebula
| https://www.reddit.com/r/Nebula/comments/1ffnaza/comment/lmx...
| gamblor956 wrote:
| _we are contractually required to split the proceeds 50 /50
| with the creators on the platform. 50% of streaming profits are
| distributed to creators based on watch time. Additionally, 1/3
| of the revenue from any subscriber is allocated to the creator
| responsible for bringing in that subscriber._
|
| For tax purposes, if the LLC is taxed as a partnership, these
| are all considered partnership interests.
| tredre3 wrote:
| > Weird that he didn't just ask.
|
| Cameron did quote someone who asked him and the answer he got
| was "it's complicated". There is no reason to think that asking
| again would have resulted in different/better answer.
|
| Plus, as we see, it's not that complicated. He explained the
| situation fully in one paragraph so why didn't he when asked in
| the past?
| socalnate1 wrote:
| This is the answer. This comment could have replaced that
| entire medium article and saved us all a lot of time.
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