Pros and Cons of white labeling a service?

Has anyone ever got asked to or has white labeled their service in the past?

We just launched Crowd Control 2.0, and the service allows viewers watching a streamer to interact with their game. Things like sending a Yoshi in Super Mario World, setting the player on fire in Minecraft, or spawning 100 wheels of cheese in Skyrim are all things viewers can do.

We mainly work off of revenue share, and with 2.0 we offer "global coins". Viewers buy $100 worth of coins, when they spend them the streamer will receive 80% of the revenue and we receive 20%. If you only spend $50 on one streamer you can spend the other $50 on another. Viewers end up buying more because they can spend them on more channels, and then end up finding new creators to use them on as well.

Hopefully, that explains the service and the overall premise enough.

I just had a call with a client looking to use CrowdControl with their agency of creators. The creators end up sharing some of their revenue with the agency, so a rev-share on top of a rev-share isn't exactly what they are looking for. They also don't like the idea that if a viewer bought $100 of coins but didn't spend anything or all of them on the creator, the money just sits in our account. 

So they asked if we would be open to white label the service, that way their creators can use it and they remain in control of the sales. Only their talent would be in this creator pool, so coins could still be spent on any of their talents but ultimately they are in control. 

So what sort of things should I be asking and thinking about when deciding if this is a good idea or not? I have some thoughts but would rather see what concerns or ideas everyone else has with this sort of thing first.

Thanks in advance. 

I think it depends on to what extent you allow white labeling. The main risk I can see is that if they have full source code access, or too much control, they can always change all of the branding to OurBetterCrowdControl and start competing with you on price which wouldn't be ideal.

On the other hand, I've seen this strategy work extremely successfully at my previous job (engineering at DoorDash). Back in ~2018-2020, our competitors (Uber, Postmates, etc) were hesitant to allow merchants to serve orders off their own website, whereas we took a different strategy: we had an open API and allowed merchants to use us for "behind the scenes" logistics while providing whatever messaging/experience they wanted to their customers. This allowed us to gain marketshare quickly and eventually many of the merchants that previously didn't want to be on because they had their own website said "okay, now that we've seen the quality of the product on our own website, let's just list on your marketplace too and get more orders that way" - so it acted as a very effective trojan horse to get big enterprise customers signed on and using the full suite of products.

To be fair, I think your industry is different and I don't think it parallels your problem very closely, but maybe there's something you can take away from this.

Thanks Ben. I don’t think we’d give them the source code in this white label situation, I think we’d even continue to host it so they don’t even get the minified code that’s deployed.

Appreciate your response, it’s certainly different industries but it’s always good to hear about how this worked for others.

In this case, for the other company it’s all about keeping control of the sales/revenue and coins in their creators ecosystem. If a user buys $10 of coins they want the viewer to either not spend it at all thus the coins sit dormant or they are only spent on their creators. That seems like their main reason for this but as I think about it I need to compile a list of things they may need to be aware of with this and have a few different pricing options depending available for them.

Understood - and agreed wrt creating different pricing options. I think it would be helpful to do some additional requirements gathering. What exactly do they want out of a white labeled product besides better pricing/payment infrastructure or is it literally just that? Maybe this is the only thing they care about, but if you can provide additional value with some customization (changing the logo to theirs while leaving a "powered by crowdcontrol" message or similar, using a custom domain, etc) maybe you can charge them for that privilege while also addressing their concern with the credits.

Maybe I missed this, but you would be white-labelling the service as a SaaS where there is a subscription fee?

This service currently does not require a subscription. We have an add-on that one can subscribe to, but the revenue is mainly made from revenue share. Each effect sent can have a monetary value associated with it, and we make 20% from that.

This agency has around 15 creators under them, so they want to ensure all sales are controlled by their agency. Right now if a viewer bought $100 worth of coins, and didn't spend all of it on the stream, their concern is that the $10-$20 or whatever the viewer has in coins could be spent outside their agency and they think that will be a large potential loss.

Hmm, yeah I think I understand the revenue share part. I guess I'm wondering since you are hosting the service, are there minimum maintenance and costs (including your time) to ensure that it keeps on running smoothly and reliably?

Also, not sure if this is the case, but would you also assume that in the future they may want to add features or request changes?

Deploying to another environment with their keys for the 3rd party services like Stripe and others is very easy. Any updates we do for ourselves would be easy enough to add to our own deployment pipeline.

Costs would be a concern if they have a large amount of traffic, since it's deployed on AWS and uses sockets, it could easily pass the free tier. So I'd need to make sure they are aware of that and are paying for the cost of that.

My main concerns come from the support/recognition aspect. If a viewer has a balance of coins in CC and ends up on one of these streams, their balance wouldn't match up since they would be separate systems. So the viewer could be confused there, and the streamer may not be the best at explaining the disconnect. So at the very least, I think having our UI updated to look different is one thing that I'd need our team to do, which would be the most amount of work on this whole thing.

Additionally, from time to time creators and viewers just have issues and our support is very quick at resolving the issues. So, I'd propose a support clause in the white label, but if they don't go for that, then I'd be concerned that viewers may think that it's Crowd Control as a whole.

The streaming community is large but also very small and user experiences matter quite a bit to our reputation/brand.

I'm leaning towards exploring this with the client more and think overall it could be a good thing for us to offer to other agencies that are concerned with revenue share for their creators. But I'll need to try and figure out what makes sense based on their size and expected revenue from this.