YouTube has a lucrative new rival

Metacafe, a website that pays people who upload popular videos thousands of pounds by sharing advertising revenue, is to focus on expanding its presence in the UK in 2008.

Unlike its eBay-owned rival, Metacafe meticulously filters the content on its site to avoid any pirated material being shown and to ensure that the videos are of a good quality.

The site, which has around 30 million unique users every month, already has around two million UK users but is keen to expand further by signing up local content owners while tempting British filmmakers to utilise its website to make money.

Metacafe is thus far the only online video company to share its advertising revenue with people that upload videos onto its site although YouTube is also considering such a move.

Metacafe, which is based in California and is backed by a number of venture capital firms including Benchmark Capital which notably funded eBay in its early days has already paid out $1m (0.5m) to its successful video producers, some of whom have become famous enough to appear on David Letterman's chat show in the US.

The company pays a producer $5 for every 1,000 views of a video on the site, although the clip has to be watched at least 20,000 times before the user is eligible for a payment.

The site's top earner, who goes by the name Kipkay, has earned over $82,000 in the past year thanks to a series of 92 short videos. His videos are typical of Metacafe's style in that they are of a genre now referred to as "how to" clips, such as "how to make a cheap lie detector" and "how to get out of handcuffs". One user from Gloucestershire, known as Shootingeggs, has funded a trip around the world by posting videos of scientific experiments showing how to make flash powder and self-lighting candles that have earned him more than $20,000.

Erick Hachenburg, chief executive of Metacafe, said: "If you create quality content in the user-generated content space, you should be paid for it." He said that users can make thousands of pounds overnight producing quality videos because of the popularity of the format and demand from advertisers. "Last year advertisers said you could never advertise on user-generated content. Now they are asking how they can advertise on user-generated content," he said.

Mr Hachenburg said that the site does not compete head-to-head with YouTube as it focuses predominantly on short clips that are produced by its users and that a community of 80,000 reviewers made sure that material is not duplicated or pirated. "Different sites have different cultures. If we put a duplicate of an existing video clip up, our community gets angry.

"It is the evolution of content on the internet we need to make sense out of the chaos," he said.

Mr Hachenburg said that the online short form video space will emerge as a format in its own right as it is impossible to make money from pirated material. However the company has started signing deals with movie producers to allow producers to cut up content from films such as The Bourne Ultimatum and American Gangster to make their own trailers. It has also struck deals with the likes of Skype and O2 to show its content on other platforms.