Magnify.net, a provider of customizable video channels, is moving to become more like white-label social network providers like Ning and KickApps. Tonight the company relaunched its website to de-emphasize video, and opened up access to its new ad-share platform.

Magnify provides hosting and community tools for niche video communities — for instance radio-controlled planes, Sri Lankan videos, and trading cards. The sites are not particularly pretty, but they’re free. Previously, the company had controlled its ad inventory, allowing channel owners to submit their AdSense accounts and split Google ad revenue 50-50.

Following what Magnify CEO Steve Rosenbaum called a “user revolt” last month, sparked by a blog post demanding that members be able to choose how to monetize their platforms, the company revised its revenue strategy.

Now, the company has shifted the arrangement so it maintains control and revenue of only half the inventory on a channel, while offering channel owners the freedom to monetize the rest and keep whatever they make on the other half.

In the last two weeks of testing, channel owners have already shown they know their niches well enough to broker much more relevant ads than Magnify would ever find, said Rosenbaum. For instance, RC Videos (the radio-controlled plane community) now shows ads for things like battery packs and model helicopters.

This brings Magnify more in line with Ning, which charges $19.95 per month to run your own ads, and KickApps, which gives users control of selected ad slots from the start.

In my experience looking at the various vendors for setting up our Pier Screenings community site (for which we decided to go with Ning), the problem has been too many features, and not necessarily the ones I was looking for.

To be sure, you’ll be disappointed if you expect something to be perfect out of the box. To that end, Magnify (like KickApps also does) will be offering the services of its in-house developers to draw in new customers, and hopes to augment that offering if it can close the funding round Rosenbaum is currently raising. Clearly, the power users are where the money is.

KickApps has raised a total of $18 million in funding, while Ning recently put an astounding $44 million in the bank. Magnify, on the other hand, has raised $1.2 million. Rosenbaum said the company’s network of sites is seeing strong growth, with 3 million unique visitors and 7 million page views per month.