Wasn’t too long ago I was having a chat with someone about the ownership issue with Nebula. I never even looked into Curiosity Stream, as I assumed they were private like Nebula. Good idea to get confirmation on some of these things.
Key takeaways from Curiosity Streams financials:
- The initial $6 million was for 12% ownership
- They had offered enough stock for a potential ownership of 25%. (that’s the additional 6.5 million from the Form D)
- Standard Broadcast owned 100% of Nebula prior to this investment
- Curiosity Stream controls 25% of Nebula’s board
From this we can infer:
- Nebula was valued at exactly $50 million, not over
- Nebula has 4 board members
- The creators directly own 0% of Nebula
Later in the article it’s shown that the creators are given “shadow equity”. This can be thought of, presumably, as a contract directing proceeds of subscriptions - and potentially a sale - go half to the creators in the form of a pool.
Obviously this is a hit to the company’s primary marketing method, being that Nebula is a platform owned by the creators. This is either a lie, or a tongue in cheek way of being honest, seeing as the owners of Standard are also content creators.
Regardless it’s annoying this information has been drummed up by Nebula to be complicated or not public, when it is neither complicated nor private seeing it’s in Curiosity Stream’s publicly available information.
Kind of sours me on Nebula to be honest.
If you haven’t already, take a look at Dave Wiskus’s response to it on Reddit, posted elsewhere in the comments.
Thanks for pointing that out. I’d missed the last line on my first read of it somehow.
Additionally, 1/3 of the revenue from any subscriber is allocated to the creator responsible for bringing in that subscriber.
This reads to me like this is the purpose of going to a creator specific link when initially signing up. For example, if you go to nebula.tv and sign up from their main page, no specific creator gets that 33% cut of your revenue. Alternatively, if you see a YouTube video where a creator talks about their content also being on Nebula, they ask you not to go to the platforms main page, but specifically to nebula.tv/zagorath to sign up. If I went to that link and signed up, you would get 33% of my subscription revenue.
To me, this opens another question of what is this the term of this 33% cut. I doubt it’s a cut of the revenue for so long as my subscription is active. I’d imagine it’s more likely a cut of whatever the initial payment is, be it a single month’s subscription fee or a full year.
Yeah that’s a good question. I’m honestly not sure. I bought a lifetime subscription about a year ago so that woulda given Jason Slaughter a fucktonne, compared to paying month-by-month, if it’s only the first payment.
That would explain why they provide such a strong incentive to pay yearly (since it’s much cheaper than monthly). It’s also interesting that you get a much cheaper price if you go through a creator’s code rather than heading straight to nebula.tv.
“Unfortunately, without access to one of their contracts, we can’t know for sure what power the broader group of creators actually has. 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 guess this kind of mixes up some concepts when we ask is nebula really creator owned.
- How does the equity get shared upon a liquidation.
- Can a creator cash in their shadow equity without liquidation.
- Do creators have ‘the potential’ for governance input.
I see some positive in the fact that they offer ownership of the top holding company to big creators as an option. The most invested have the full protection. I can see reasons for having a two tierd system with phantom stocks, mostly in making adding new content creators easy.
But I guess the question really is, is nebula willing to share standard terms of their creator contract?
It would be nice to see a standard contract, but I can’t blame them for keeping it under wraps. Unless it’s unreasonably lucrative, there’s no benefit to having it out there I can see.
My thoughts on your questions:
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I would assume it’s by watch time to some degree. Either overall views, or number of minutes watched. Though the latter would put shorter content / infrequent creators at a significant disadvantage.
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I know it’s a progressive platform, but I feel like cashing out your equity in any situation other than a sale is probably not a possibility.
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If there were, say, a single board seat available that represented the creators, and they could all vote on decision making, they probably would use this in their marketing. It sounds too good to be true, so it’s likely to me they don’t have any real governance input.
Specifically when it comes to the creator pool, being their 50% of subscriptions after costs, I do wonder what that looks like. It occurs to me that it must be number of views, as I mentioned above. However this opens the question of how they determine the distribution.
If it’s simply by ranking view counts for the month across the platform, that means the largest creators that I don’t watch are getting a fraction of my subscription fee. Not the worst way to do it, but probably is the easiest from a technical perspective.
An idealistic approach may be if Nebula looked at the specific channels I watch on the platform, and divvy my subscription money amongst them, ranked by view count. This way, the channels people watch would be directly supported by my viewership, instead of the platform as a whole. Doing so would be better for the lower view count creators, but worse for the high view count creators.
I’ve not found any definitive answer to how the pool is cut up, but I’m not confident it’s the latter option I described.
Maybe someone will leak their contract at some point. Otherwise we may never know.
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It looks like this was shared to Reddit as well, https://www.reddit.com/r/Nebula/comments/1ffnaza/who_actually_owns_nebula/
Dave Wiskus (CEO) responded over there:
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.
