This CEO just raised millions from investors including Mark Cuban to build a better YouTube without ads

Jonathan Swerdlin. Portal
  • On Tuesday, an ad-free video-streaming platform called Portal was launched, competing with the likes of YouTube and Vimeo.
  • On Portal, creators are paid directly by viewers who like what they watch – ideally meaning creators have to hustle less for views and focus instead on building relationships with their audience.
  • Portal has raised $US4.2 million in seed funding from investors, including Dallas Mavericks owner Mark Cuban.
  • Swerdlin decried the practice of “demonetization” and said allowing advertisers to dictate who is and isn’t allowed to make money from their videos is tantamount to censorship.

When Radiohead famously released its “In Rainbows” album in 2007 and told fans to “pay what you want,” Jonathan Swerdlin forked over $US50.

He was enamoured by the radically different approach to payments. But to his disappointment, the model that helped Radiohead instantaneously earn $US3 million upon the album’s release never really caught on in the music business.

Swerdlin – who started his career in e-commerce, most recently helping grow a popular online women’s underwear company called THINX – couldn’t shake his fascination with Radiohead’s experiment or ignore the rise of micropayments on gaming platforms. He also took note of countries like China, where “tipping” for content from one’s favourite blogger, live-streamer or musician has become the norm.

On Tuesday, Swerdlin announced the launch of Portal, an ad-free video-streaming platform where creators are paid directly by viewers who like what they watch.

For his ad-free video platform, which puts him in direct competition with the likes of YouTube and Vimeo, Swerdlin, Portal’s co-founder and CEO, has raised $US4.2 million in seed funding from investors, including Dallas Mavericks owner Mark Cuban, who is also famous for being an investor on the show “Shark Tank.”

“For the content creator, [Portal] gives them the ability to focus on value and investing in delivering something that matters to people rather than trying to churn something out every single day and game an algorithm,” Swerdlin told Business Insider in a recent interview.

Getting paid with Portal

Portal’s key difference from other video platforms, Swerdlin told Business Insider in a recent interview, is how creators are paid.

Similar to Radiohead’s “pay what you want” approach, Portal lets viewers “tip” creators for the videos they watch. Enjoy the content you consume, and you can leave a tip ranging from $US0.10 all the way up to $US100.

For multiple revenue streams, any creator on Portal can also set up monthly subscriptions for their channels or enable a paywall for the individual videos they post. To make money on its end, Portal will eventually take a small percentage of the funds paid to creators.

Swerdlin and his team – which currently comprises five engineers and “a small community team” – hope the shift away from an ad-based model (which compensates creators according to the sheer number of views a video receives) will increase the quality of content being produced.


Ad-free means freedom to create

Another major upside to an ad-free model, Swerdlin explained, is that content creators don’t have to feel the need to create “advertiser-friendly” content designed not to offend deep-pocketed media buyers.

“[Advertisers] should not be the authority on what it is that we see or don’t see,” Swerdlin explained. “That’s not what the internet was built for. That’s a fail right there. But [advertising is] a multi-billion dollar business and because of that, it continues on.”

Swerdlin also decried the practice of “demonetization,” where platforms like YouTube decide that some videos or channels are unsuitable for advertisers and revoke their share of the ad revenue from that content.

While the idea is to tamp down on offensive videos – infamous conspiracy theorist channel Infowars was recently demonetized by YouTube – others have gotten caught in the crossfire. LGBTQIA video creators, in particular, have complained that they have been unfairly targeted by YouTube for demonetization. He said Portal has already attracted a thriving community of LGBTQIA creators who felt jilted by its larger rivals.

“Demonetization is censorship,” Swerdlin said. “When you take away [people’s] ability to earn money then you take away their ability to create content. It takes money and time and investment. You have to pay the bills.”

Notable creators that have been using Portal’s beta product for the past few months are social media guru Gary Vaynerchuk and the online news show The Young Turks.

“The Young Turks has always believed in the ‘audience first’ approach to content creation and place great value on the direct relationship with our fans,” The Young Turks’ Chief Business Officer Steven Oh said in a statement. “We are excited to be on Portal to continue building that direct-to-consumer relationship.”

A crazy idea takes shape

For Swerdlin, the launch of Portal has been two long years in the making.

“Everybody told me in the beginning that I was crazy. A lot of people didn’t realise that ads were a problem,” Swerdlin recalled. “It’s been really interesting and exciting for everybody to sober up and wake up to the problem.”

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As for the seemingly insurmountable battle of taking on a competitor like YouTube, which as of May had over 1.8 billion active users, Swerdlin said he’s confident that Portal’s micropayments model will ultimately win out.

“People think like, ‘Oh, David and Goliath,’ with platforms like Facebook and YouTube as the Goliath,” Swerdlin said. “But if you compare the models side-by-side and you look ten years from now, in ten years from now, our model will be the Goliath.”