Besides Peerflix, the company started by jilted MySpacer Brad Greenspan has also purchased struggling companies PageFlakes and Revver in the last year, and Greenspan made a personal investment in Flurl, but was turned away by JumpTV.

All that wheeling and dealing while not paying attention to basic operations like payroll? Flashy products and technology that may or may not actually exist? "Out of touch" sounds about right.

Greenspan and friends will probably just blame the market as management shorts employees, since that's all the rage these days. But this looks a lot like a textbook case of "excess and lack of self-discipline" to me. Who may end up the winner in all this? The Hollywood Hills Cat Burglar, who seems to have gotten away from Greenspan's mess just in time. (Photo by Getty/Alberto E. Rodriguez)

One could go into a longwinded dissertation on how rumors like this spread, how word leaks in the midst of negotiations, and how the press gets inadvertently roped into fraught negotiations. But I prefer one peer's much simpler explanation: "Brad Greenspan is crazy."

The reasons Revver failed are obvious. Its one advantage was that YouTube didn't pay creators. Then, well, YouTube started paying creators and sucked up all the low-level talent, and meanwhile sites like Superdeluxe topped Revver's "we'll pay you eventually" model with a "we'll actually give you a budget" model, luring away the pros.

But the reason Revver failed so spectacularly was that it tried so hard to go Hollywood. The LA-based, venture-capital-funded company acted fancy, unlike the lovably dorky people running competing sites like Blip.tv. They chased talent like Lonelygirl15, who later returned to YouTube. They offered vlogger Ze Frank cocaine at his first meeting (Ze doesn't do coke, he just looks like he does). It's like the whole company was imitating something they saw on TV.

And now they're worthless. Well, now they admit they're worthless. Which could seem bad for independent artists, except that Revver never came through anyway (they couldn't even tell Ze what they owed him), and YouTube really isn't that bad, and now there's one less awful company souring people to the idea of new media.

The policy just confirms what we always suspected was Google's attitude: Users are losers, and we know best. The Google-owned video site claims that channel partners who regularly produce videos with more than a million pageviews can earn "several thousand dollars per month," but those are few and far between. The real winner is Google, which continues to dominate the Internet video market, and now eliminates the small advantage held by rival upstarts Revver, VuMe, and Metacafe which have been touting their own loser-generated-content reward programs for some time.

Ezarik quickly rose to the top of the lifecasting niche, and now she's cashing in. That she's going with an unknown just shows how her own brand has outgrown all the services she uses. But will her old flames stay infatuated while she pumps up the competition? And is iJustine a strong enough commodity on her own to support a dedicated site? As her male counterpart Justin Kan can attest, achieving fame is no small task, but staying on top is a whole lot harder.

Repeat after me: REVENUE IS NOT PROFIT. And Revver is competing in a sea of also-rans. VuMe and Metacafe also have producer reward programs, and DailyMotion and YouTube are about to launch their own programs. Lots of sites are about to start competing for the few uploads that will have money-making potential.

And it turns out that $1 million, impressive as it sounds, is not so great if you're a video producer, either. Since 25,000 producers have received some form of payout — making the average payout $40 total, as onlinevideoinsider points out in the comments — you are not talking about a living wage... more like a thank you for the traffic. Thousands more have not qualified for the minimum $20 payout yet. Success stories like Eepybird, the wacky "scientists" behind the Diet-Pepsi/Mentos videos, and Tim Street, producer of the salacious French maid TV, who are making a living wage from revenue-sharing are few and far between.

Until more producers can make more money from residuals, ad revenue sharing is just a gimmick. And until YouTube enters the game, Revver is just an experiment trying to reverse a year of bad news with a seemingly positive press release.

Revver is not for sale. We believe we are in the right place at the right time with the right technology, and we continue to focus on enhancing the Revver service and forging new distribution deals.