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Never Mind Periscope or Meerkat. YouNow Has Already Paid Top Live-Streamers $1 Million

Live-streaming apps Meerkat and Periscope — acquired earlier this year by Twitter — have quickly become tech-world darlings, catapulting virtually overnight into popular  services.

But 4-year-old startup YouNow claims it’s far bigger than either one, and that unlike its rivals, has established a model for generating real cash for its biggest users.

Twitter CEO Dick Costolo touted Periscope’s rapid growth on the company’s first-quarter 2015 earnings call Tuesday, a relative bright spot for the quarter as the company missed Wall Street expectations (and its financial results leaked out early). More than 1 million people signed into Periscope in the first 10 days after it launched in late March, he said.

“When we first saw Periscope in late 2014, we were excited about it for a number of reasons, but mostly because it so nicely fits into our mission to give people the power to create and share ideas and information instantly without barriers,” Costolo said.

Usage of Periscope and Meerkat are likely to continue to climb. But according to YouNow, its service currently handles 150,000 broadcasts a day — with more than 100 million user sessions per month — and has paid out more than $1 million to about 500 of its most popular live-streamers. On average it has between 4 million and 5 million active user per month.

Of course, $1 million is chump change compared with Google’s YouTube: In 2014, YouTube paid out more than $3 billion to content partners, according to estimates from Jefferies & Co. But YouNow is demonstrating, albeit in a very small way, that live-streaming online can generate coin.

YouNow pays broadcasters based on how well they engage with the audience, as viewers spend real money on virtual goods — ranging from a few cents to a few dollars, depending on the size of the audience. Those premium-priced features include the ability to highlight a comment sent to the creator or send a digital “gift” (such as “50 thumbs-up” to help the broadcaster trend more quickly). Top partners are earning up to $15,000 per month, according to YouNow founder and CEO Adi Sideman. “We are opening up the communication channel and giving the audience an active role in content creation,” he said.

For example, Tyler Oakley — a popular YouTube creator with 6.8 million followers — has more than 225,000 fans on YouNow. In part through his YouNow broadcasts, in March he reached his $500,000 fundraising goal for the Trevor Project suicide-prevention organization. “Tyler Oakley used us as a live telethon, asking his fans to contribute to charity in real time,” Sideman.

Based in New York, YouNow has raised about $15 million from investors including venture-capital firms Union Square Ventures and Venrock. The company has 45 employees and is opening an office in L.A. to establish a bigger presence in the digital entertainment biz.

Live-streaming personal video has been around for years but has remained a niche phenomenon until only recently. Last summer, Twitch shut down Justin.tv, one of the first live-streaming video services, before Amazon.com acquired the gamecasting service. Sideman said the first wave of video-broadcasting services were built for a pre-mobile and pre-social world: “Now, everybody has a camera in their hands — that’s really powerful.”

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