Earn Money & Dollars
Wednesday, April 24, 2013
Started in 2005 by Chad Hurley, Jawed Karim and Steve Chan, Youtube is currently
world’s most popular video sharing website. From video clips of cats fighting
with dogs shot with cellphones to professionally produced movie trailers, the
site hosts it all. According to Google, which bought the website in 2006, over
800 million users visit YouTube every month, over three billion hours of videos
are watched every month and over 72 hours of video content is uploaded every
minute. In the recent years, the website has tried to attract more professional
video content producers. It has tied up with several Hollywood studios and gives
people a share in the advertisement revenue if they sign up for the Youtube
partner programme to produce exclusive content for the website. With its reach
and popularity, it has also emerged as a repository of first-person account. For
example in the case of 2011 tsunami in Japan, videos shot by amateur people
appeared on Youtube minutes after the disaster. At the same time, its growing
popularity has forced it to deal with several contentious issues like copyright
infringement, which is considered to be rampant on the website as users often
upload copied video content without any regard for the rights of original
producers
It's Getting Harder to Make Money on YouTube
Despite success
stories about YouTube (GOOG) sensations such as Jenna
Marbles, the vast majority of the site’s users probably don’t think of it as
a place to earn money. The video giant wants to change that. It’s trying to build a
bench of talent that can support its ambition of competing with traditional
TV. In the past year it has opened swanky new studios in Los Angeles, London,
and Tokyo, launched more than 100 new original content channels, and made
advances totaling more than $300 million to some of its top video makers.
For folks who dream of earning a living as YouTubepreneurs, the biggest
change took effect last April, when the video site launched a new revenue-sharing program.
Whereas before, creators who wanted to pair sponsors’ ads with their videos had
to get YouTube’s permission, now the video platform has automated the process
with a “monetize” button, essentially opening the flood gates to anyone who
posts an original video. Creators get about half the advertising proceeds,
according to industry analysts and video makers. (YouTube typically finds the
advertisers, although creators can approach sponsors directly.) “If they can
generate an audience, they can start making money,” says Tom Pickett, YouTube’s
vice president of global operations.
The ensuing rush of fresh talent, including stunt master Devin Super Tramp, singer
Sam Tsui, and science geek
Emily Graslie, has been
good for YouTube, which says more than 1 billion people worldwide visit the site
on a monthly basis, up 25 percent from the previous year. Advertisers paid an
estimated $4 billion for YouTube ads in 2012, up 60 percent from 2011, according
to RBC Capital Markets stock analyst Mark Mahaney. He expects the site to
attract $5 billion in ad dollars this year.
But for many of the more than 1 million creators who have signed up for the
ad-revenue sharing program since its launch, the payout has been disappointing.
The surge in new content—about 72 hours of which is uploaded each minute today
vs. every 48 hours in 2011—makes it harder for any one content channel on the
site to get noticed. Even worse for creators: Rates that advertisers pay to be
on popular videos have fallen by about one-third since last June, according to
research firm TubeMogul, which bases its figures on rates for several video
sites, including YouTube.
Specifically, the rates for the most lucrative, “pre-roll” video ads that
appear right before the featured video dropped from an average of $9.35 per
1,000 views in June of 2012 to $6.33 in March of this year, according to David
Burch, TubeMogul’s research director. In some cases, the slide has been even
steeper. Brothers Vijay and Antonius Nazareth, whose popular YouTube channel AVbyte attracts about 2 million
monthly views to their elaborate parodies of Broadway show songs, saw “a really
strong decline” of more than 50 percent in their YouTube earnings in early 2013,
“even through we were getting the same [number of] views,” says Vijay Nazareth.
Hannah Hart, creator of My Drunk
Kitchen (she cooks while tipsy), says that her YouTube earnings started “to
kind of teeter off” in mid-2012 after big growth in 2011 and early 2012. YouTube
declined to comment on the overall ad-rate drop.
Dave Morgan, founder of Simulmedia, an ad targeting firm for TV, says “most
of what’s on YouTube is not what advertisers want,” in terms of both production
quality and content. That disconnect has created an “unnatural pricing bubble”
that he says is beginning to pop. “There’s an inflated economy out there a
little bit,” says Reza Izad, a partner at Collective Digital Studio, a content
network that represents about 50 YouTube creators. It’s one of about 300
networks that typically take a cut (50 percent or more in some cases) of their
clients’ ad revenue in exchange for helping them cover production costs, obtain
paid sponsorships, or secure higher ad rates by selling ads directly to
marketers instead of relying on YouTube to parcel out the spots.
One of the biggest networks is Machinima, which claims its videos had 2.2
billion views in March. It’s backed in part by Google
(GOOG), has about 6,500 creators in its stable, and
specializes in videos for male gamers between the ages of 18 and 34. Aaron
DeBevoise, an executive vice president at the network, says that about one-third
of Machinima’s creators earn enough to live off their YouTube careers. Because
Machinima negotiates ad rates directly with sponsors—often at a premium rate due
to its coveted audience—DeBevoise says that the recent ad-rate drop affected his
creators less than those who rely on YouTube directly to procure ads.
Still, the lower ad rates are prompting some popular creators to question
whether signing with a network is worth it. Last spring, Ben Vacas stopped
posting his Braindeadly
commentaries about World of Warcraft after he realized that he had signed a
lifetime contract with Machinima that left him unable to switch to another
studio. (After a hiatus of several months, he created a new channel where he now
posts his videos.) In December, Ray William Johnson, a top YouTube personality
with more than 40 million monthly views, criticized
his network, Maker Studios, for refusing to let him out of his contract when it
demanded a larger share of his ad revenue.
BTIG analyst Rich Greenfield, who covers new media, dismisses such problems
as “early growing challenges” and “a few areas of tension” in a rapidly evolving
industry. But the way in which those tensions get resolved is likely to have a
huge impact on whether the throngs of YouTubers who are in it for the money keep
posting their best work on the site—or decide to take their business to
YouTube’s rivals.
Subscribe to:
Posts (Atom)