It's no secret that billions of videos and photos are created and uploaded to sites like YouTube, Vimeo, flickr, Facebook and others every day. The proliferation of digital capture devices and online hosting sites has triggered an explosion of digital creativity. What's been missing however, is an economy around these digital content assets - a simple way for content creators to list and license their videos and photos, with a corresponding mechanism for buyers to discover and buy those they desire. This massive opportunity is what Paya (pronounced "pay-ya"), being introduced today by T3Media, is addressing.

As Craigslist and eBay did mainly for physical goods and services, Paya is trying to put the necessary structure around digital assets to create a thriving marketplace. A couple of weeks ago, T3Media's CEO and Founder Kevin Schaff and VP of Marketing Dan Weiner walked me through how Paya works. I think it's one of the most impressive, well thought out ideas I've seen in a while.

There are two key differentiators in Paya's model compared to traditional "stock" houses like Getty Images, iStockphoto and Shutterstock - first, with Paya, the content owner keeps 80% of the content sale, an inversion of the typical economics, and second, rather than buyers using a central destination site to search for desired assets, Paya enables a distributed storefront model, whereby assets are marked as available for sale wherever they were discovered (YouTube, Vimeo, etc.). This "connected" approach means Paya leverages the gigantic reach of today's hosting sites and social community, while avoiding duplicative and expensive content re-uploading.

In fact, Paya's genesis can be traced to YouTube. In addition to its cloud-based video management platform, T3Media also runs a successful licensing business, and as Kevin explained, over time, as YouTube has grown, T3Media was getting more and more inbound inquiries about licensing particular clips after they were first discovered on YouTube. Today, Kevin says that half of T3Media's licensing revenue is attributed to content first discovered on YouTube, with growth due to major media companies embracing YouTube as a promotional platform (as an example, the BBC alone now has 2 million clips available on YouTube).

However, it can be the case that T3Media doesn't represent the content owner whose assets are being sought for license, in which case the prospective buyer is essentially told they're on their own to figure out how to track down and properly license the clip. That roadblock means buyers often end up empty-handed with content owners missing out on major licensing opportunities.

Hence the idea of Paya, which essentially turns any YouTube, Vimeo, Facebook or other channel into a digital storefront, with easy "buy" links to license content (video can also be ingested from Brightcove and soon other OVPs as well). When a buyer expresses interest and the transaction is completed, the buyer received a master copy in the format requested. Paya basically sits in the middle, facilitating the discovery, transaction and delivery of the digital asset, exactly as Craigslist and eBay have been doing for years.

While Paya will have clear appeal for professional content creators who have been limited to listing with stock sites for years, the really exciting part of Paya is how it opens up licensing opportunities for smaller, even amateur, creators. Paya is effectively a tool for democratizing the licensing of digital content, letting anyone capture value from their work. That's a pretty exciting prospect for the tens of millions of people who are creating and uploading digital content each day. It's also an advance for the online video community to expand beyond mainly an ad-driven model.

Here's a video explaining more about how Paya works:

Introducing Paya from Paya on Vimeo.

(Note: T3Media is a VideoNuze sponsor)