Seven Secrets YouTube Doesn’t Want You to Know!

Man that headline will sell. Truth is, I am very careful about NOT revealing confidential information on this blog that I learn from Google employees, as a YouTube partner, or through my conversations with industry colleagues or creators.

But most of this is public now, or based on educated assumptions topped with a saucy tabloid-like flare. On a similar note, YouTube’s Business Blog published a refreshingly transparent POV about some YouTube myths recently. Did you know that 70% of Ad Age top 100 marketers ran YouTube campaigns in 2008?

Here are the secrets the YouTube PR folks won’t reveal:

I've got a secret

"I've got a secret" -Cindy Brady

1) YouTube is Monetizing Fewer than 9 Percent of Its Videos. But Who Cares? Kudos to Jason Kincaid for doing fancy math to figure out what percent of videos YouTube is monetizing (meaning the site is making money instead of paying to stream and bleeding money). The answer was 8.5%, which is close to AdAge’s 8.7% estimate (CNN Money claims 13%). Of course, monetizing could mean shitty lil’ penny banner buys, decent InVideo sponsorships, homepage takeovers, or premium rev-share deals. It’s long been rumored to be 3-5 percent monetization, but let’s get real. Google could turn that number to 100% by simply running Adsense indescriminately on each page. So I’d be less concerned about the percent than the profitability.

Thanks to YouTube my videos are seen 200-250,000 times a day (yey, Uncle Google). That wouldn’t happen any other way, and I’m only hoping the biz-dev folks enhance the average profit per-monetized video before it bothers chasing the impossible-to-monetize-well long tail. This is happening as we speak with new revenue boosting options.

If I got a penny per view, I’d earn $730,000.00 this year. I’m not, mkay?

2) Algorithms Squashed the Editors. Almost nothing you see on YouTube is by accident… or an editor anymore. While YouTube editors once possessed more power than most network executives (creating instant celebrities by homepage feature pixie dust), the model is now driven almost exclusively by relevancy and economics. Recently, YouTube announced content creators and small advertisers can get their videos promoted for a fee… and not just against search results. Editors continue to serve some role on the “spotlight” pages and community relations, but are not the Titans they were in 2006 and 2007. That said, we still love them deeply because our love was unrequited. Especially when they put us on Partner showcase pages.

Google-Data Robots Eat YouTube Editors' Brains for Fuel

Google-Data Robots Eat YouTube Editors' Brains for Fuel

3) YouTube Still Plays Favorite, and especially for “TV Shows.” Lately, YouTube has worked hard to pimp its “shows,” a collection of retro TV that lost its charm faster than Bazooka loses its taste. Ba-boom. There also are some YouTube partners that live on the home-page (CommunityChannel), the recommendation section for new registrants to YouTube, or are “micro-featured” everywhere. We don’t know whether the editors are doing this, or the algorithms are saying: “these guys are good YouTube-addiction starter drugs.” But we do know that if a human does have any input to this “favoritism,” the person is probably really smart, attractive and has good breath. Man I’d like to meet ‘em!

4) It’s All About Your Relatives: Not Keywords and Viral. Think viral-views is the engine behind YouTube? Wrong. It’s about having a steady daily audience (like many, but not all, of the top 100 most-subscribed) and having your videos appear as a related video to popular videos… in other words, via ad, editor or algorythm, getting next to watched videos. Just like being next to a pretty girl makes you look cooler.

A visit to YouTube is often a chain reaction. You start to watch one video, and several related videos draw you deeper. Metacafe was once the master of this, and now YouTube is drawing upon its data-oriented parent, Google, to facilitate what I call the “video roach motel” model. This will get better with time, as we move from “title, tag, description” as being the view driver, to that mystical thing called “relevancy.”

What’s relevancy? I’ll give you two examples: if someone searching Google returns instantly after clicking on a result, that page is penalized on the rankings. Presumably it wasn’t what the searcher wanted. On YouTube, if a video is poorly rated and/or is viewed for a percentage that’s far below average for its total duration, it will eventually be penalized. Example two: on Amazon, there’s a high correlation between Wayne Dyer and Dr. Seuss book purchases, then those two books are related. The machine is getting smarter based on universal behaviors and your own preferences. Soon enough, my audience will be a smaller percent of YouTube but hopefully larger and more appropriate. That’s because we’ll see more of “people who like Shaycarl may also like Nalts.” (And although I may not be as funny or cute, I’ll look thinner to those viewers).

Neither of these models requires indexing the content, mind you. So in theory a video could be relevant to you without the algorithm even knowing what’s being spoken (remember years ago we thought all video would be transcribed to facilitate SEO… and that we’d be driving space cars by now?).

5) YouTube May Not be Hurting, But it’s Hungry. Google was the first to abandon banners and move entirely to a bid model. But YouTube, in a Yahoo-like move, has blitzed in past few months with homepage takeovers. Folks, there’s no reason for ads to represent 50% of the site’s homepage (above the fold) unless you’re trying to show fast revenue. It’s not Googlesque (even if CNN Money maintains that Google hearts YouTube). Of course the rice-sized brained media buyers are using this precious space to simply drive awareness instead of engagement: most of the homepage takeovers are for films, and there’s usually nothing more than a trailer to compel interaction.

CNN Money suggests all is zen-like between YouTube and Google. Hey, even if YouTube captured as much as 1 billion in annual revenue, that’s 1/30th of what Google does. Meh. So if YouTube bleeds a few hundred million to run itself ($83-$350 million in infrastructure/hosting alone, and — who knows — $250 million to maybe $500 million in a year), who cares as long as it has strategic long-term value?  Online video is white hot, and it’s just a matter of expediting the future and reducing the blood loss. Of course, all of this is speculation, and Google/YouTube aint talking.

YouTube ad

6) Why YouTube Can’t Discuss Real Profit/Loss. No, YouTube doesn’t want you knowing about its economics, but I have 3 words for the curious: stop asking, idiot. YouTube can’t over or understate financials, yet journalists whine about the company’s decision to not publish profitability (or even costs or revenue specifics). Imagine the channel conflicts disclosure would create! If it’s horrible, YouTube has dimished street credibility with media outlets, downstream distribution partners, and advertisers… not to mention shareholders. If it’s schweet, then it attracts copyright attorneys like watermelon at a picnic. But should YouTube reveal case study ROIs (with permission of advertisers) to legitimize the medium to marketers? Uh- yeah. Glad you asked. I give YouTube a D minus on this.

7) Steven Chen’s Latest Contribution. YouTube won’t likely be issuing press releases about Steven Chen, who has continued to vanish from the public light. But thankfully, Chen disintermediated his employer and shared his latest project — which includes a golf swing. Hey, he’s got billions in the bank. What would you do? Probably build a coffee bar. Or buy the car you’ve saved up for since 2005. For nostalgia, check out Chen when Google bought in.

steven chen

Shit. This post took me hours of time I could have otherwise spent trying to, um, make money. At least there will be a few comments from the back row. Right?

34 thoughts on “Seven Secrets YouTube Doesn’t Want You to Know!”

  1. Great read, Hope it opens up a lot of eye’s about the myth’s of Youtube. Who cares if people are making profit, there’s no reason why they shouldn’t, When you work hard at something you should get paid for it.

  2. Tell me when you figure out how to get views back up to the levels we were used to experiencing.

    Hey, what is the best way to get related to other videos? Should I just include a link to the desired video in my description and annotations?

  3. nalts youtube is good at playing Favorites that’s why normal people don’t do videos no more. you pushed the old community away who built your youtube. when google came in, the partner trash started. cashcows are here, have fun with censorship

  4. Nice work, Kevin. I feel as though I should have paid to read that.

    I couldn’t agree more with many of the aspects of every point in that entry. YouTube has really been going downhill lately, yet we still continue to flock back to it. Why? Because it’s almost a monopoly, and YouTube really is good in it’s core; it’s just gotten really sucky lately.

    Especially when it comes to keeping us, the users, THEIR CUSTOMERS, happy. After releasing a blog with, literally, hundreds of Thousands of Negative comments about the atrocious new Channel Layout (and not a single positive one that I could see), they changed their tactics, relinked, and still are saying we won’t have a choice when the day comes.

    Or the hundreds of ads I get assaulted with all the time. It’s great for partners, but where’s my revenue? Why can’t I make money when YouTube blatantly advertises on the page of a video of mine?

    And the partners. Gah. Nalts, I love you man. You’re one of the good ones. There are many good partners, but for a majority of them, it’s all about the money. They don’t care a lick about their subscribers, and all they want is fame and money (coughcoughfredlisanovanigahigasmoshcollegehumorcommunitychannelcoughcough). It makes me sick, because, like you said, YouTube plays favorites. I’ve seen many, MANY channels with some excellent, creative, quality work that have about 50 subscribers. Why? YouTube overshadows them with the folks that will make them money.

    *sigh* Why do I still hang around?

    Great blog, Kevin. Thanks for taking the hours.

    -Matt

  5. Well worth the hours of Nalts’ labor! I appreciated the point about why YouTube won’t release its financials, which makes complete sense. So many people are clamoring for “transparency” in our society, but it’s not necessarily a good thing for business…

    These days, I don’t even venture onto YouTube unless a link on Facebook — or your blog — takes me there. I wonder how YouTube is incorporating that into its strategy? Facebook is reportedly now the 4th largest website on the planet — a few referrals there might do more than being featured next to a hit video.

    But what do I know? I wait for your insider’s take, almighty vid guy.

  6. Nalts what an amazing article no lie! I’m always interested in this type of stuff. I’ve noticed tons of changes on Youtube. I used to be able to hit the homepage; but now I have no chance. It seems like the more subscribers you have the better your are? I saw a girl yesterday with a featured video and almost 85,000 subs and just stares at the screen. I find some of their changes on Youtube to only be for the big Youtubers, like community channel (; She could make the worst video on earth and still hit the front page. Doesn’t make sense to me. Well thanks for reading this comment. Oneday I hope to meet you nalts your the best

    Thanks,

    Ben

  7. People with 50 subscribers have themselves to thank for it. That sounds arrogant and mean, but it’s true. If you don’t know how to put your name out there, don’t expect to be successful.

    Why does anyone think YouTube should be doing their promo work? If they have 50 subscribers, they are a dime a dozen. They’ve either not been around long enough to prove anything, or they’ve proven they aren’t the whole package.

    How do you think radio gets people to listen to radio stations? Do they expect people to just happen across their stations? No. They put up billboards in high-traffic areas. They do press, they talk with media. They get the word out.

    Why do talk shows exist? To promote movies and other entertainment, because even though the info is out there, not everyone is keeping tabs on the day-to-day of a Judd Apatow. He’s widely successful because him and his crew go out and do publicity.

    That is why shows fail, movies fail, why bands don’t succeed, why artists don’t sell their paintings. They think all there is to it is their craft. THAT IS NOT THE CASE. It never has been and it never will be.

    Promotion is more important than what religion you subscribe to. And if you aren’t already a bankable name that has gone through the ring of self-promotion already, you aren’t going to have a team of people helping you succeed.

    YouTube was different before because online video as a whole was not a business at the time. It is now. You don’t like it? Tough. You aren’t going to make a living doing online video ANYWHERE if you don’t understand that.

    And if you don’t want to make a living doing online video, then why does it matter at all? Who cares? Just make your videos and have fun.

  8. Some people like having a decent audience without the greed, corruption and arrogance that comes with making it into a business.

    In retrospect, there are a lot of Partners out there that certainly don’t deserve it as well.

    (Just checked your URL, Peter)

    Ah. I see you’re one of ‘those’ partners. Figures.

  9. @9 – If you mean one of “those” as in “one of those guys that YouTube promotes” then you are sorely mistaken. I’m also – contrary to my tone, which I pretty much can’t help as I am just an obnoxious person a lot of the time – saying things like that in an effort to jar some people out of the little bubble they put themselves into and HELP THEM.

    There are a lot of people who want to do this as a living and figure “I’ll make the best videos I can and it will happen!” and it just isn’t like that. Things don’t just happen for you was the jist.

    I have nearly 12,000 subs, I can directly thank Nalts for about 1500 and directly thank YouTube for about 1500. I thank Nalts for his blog and willingness to try and put what has helped him out there for others to learn for a lot of the rest. (seriously, Naltso, thanks)

    12,000 subscribers is not a living, either. I will make a living off this someday (soon), and a great deal of why is sheer tenacity.

  10. This was class! Awesome post Nalts. This is filled with truth and things that make a lot of sense. Definately worth the time to write and of course for us to read :)

    -Laughingleaf

  11. Nalts, someday all of this advice and wisdom I’ve absorbed from you on this website over the last 2 years will all fall into place in my mind and I’ll be the next Shane Dawson. Well, hopefully.

    Either way, it’s posts like these that actually teach me things about youtube and what to do to try and make a name for myself. As a matter of fact, if I weren’t always reading these posts, I’d probably be one of those guys who has NOTHING, and annoyingly complains about it, as apposed to what I am now, who is a guy who actually does have an audience (although it may be very very small compared to many others.)

    So…where am I going with this? Oh yeah, this post was really really good and informative, and I always appreciate them.

  12. @petercoffin – the nasty little secret about a lot of major partners who ARE making a living off of youtube was the bot program Tubeblaster Pro or something equivalent. YouTube has recently, finally stopped it from festering as far as I know, but I’d hate to see you lose another year plugging away with just tenacity. Make that movie of yours. The cheaters already won.

  13. I’m kinda tired of youtube. Last week I went through my sub list and unsubed from more than half (not you guys), and let me get this out of the way, community channel has to be one of the worst things I’ve ever seen on youtube. I don’t say this often, but ick. Someone want to explain why people like this? Actually, I take that back, mdj you explain it to me.

    Right now I’m felling pretty disillusioned by the whole on-line phenomenon, well for now… I’m not one of those people looking for applause, more projected orientated and work best in the background. Contemplating my next move… Anyone have any ideas, take a gander at my blog and offer suggestions, I’m open.

  14. Wow. I just liked being watch entertaining videos. I know I am rare in the fact I hate to read. I am poor at it and in turn I write poorly as well. I guess I am just nieve that there IS a business of running YouTube. I guess like anything the more you put in the more you get out.

    I am impressed Nalt, this is the most I have typed since loosing my job last year. I guess I will read more of these postings. PS good job :)

  15. Not being one who’s “into” YouTube other than to watch and find entertainment, I found this very interesting. Thanks for putting it together FOR FREE.

    I give it a 10. It has a good beat and it’s easy to dance to.

  16. Bobby, it’s not losing years. It’s gaining experience.

    I honestly don’t care that other people are huge by cheating. I’m proud to not be, in fact. I keep plugging away and things keep getting better.

    The idea is to be a small business version of everything. Music, movies, video games. Eventually all of it.

  17. ^ that’s what I like about you most peter- you keep plugging away at it, trying different things and doing what you like.

    I believe everyone has an audience it’s just a matter of finding them.
    the other thing I think is great is when people share or spread talent, videos and do collabs. Maybe that’s why I am bored with youtube, fewer collabs and little sharing. Maybe the excitement, the trill is gone.
    I guess youtube grew up.

  18. question about #1, does it really matter how many VIDEOS YouTube is monetizing.. That 9% (I would assume) probably accounts for 50% to maybe even 90% of total view count. Thats all that matters.

  19. lxcoon just made a very vital point. everything in life is this way. 2% of the people working are getting 98% of the profits, tis the world we live in.

  20. Thanks Nalts

    I love dropping by wvff every now and then, and finding out what is happening in the world of online vid. You really are the expert in this field.

    I’ve just read through all the comments, thanks guys for the insight…tubeblaster pro, gotta check that out!!

    Nalts, could you interview some of the top youtubers, asking them about how they became successful…I know you have a lot of time on your hands ;)

    best wishes from Australia

  21. Shredded wheat makes for a good poo.

    I miss Sukatra and MerryLynn. These comments had way too much to do with the crap you wrote. Pfftttt… boring!

    Why does scratching my ass cheek feel so good?

  22. LonelyGirl all over the media when she was relevant is what made me first click on Youtube. Wasn’t very interested though.

    Wasn’t until I discovered CommunityChannel that I got hooked.
    It was like a chain reaction… Natalie, then TheHill88, then Mememolly, Katers17, CharlieIsSoCoolLike etc etc etc.
    I’m pretty sure I subscribed to all of Europe before I discovered SMPFilms, then you, Nalts. And through you I discovered PhillyD and then ShayCarl… and then Charles Trippy.

    Slowly but surely, Youtube took all my attention off of television, and I couldn’t be happier with that outcome.

    You guys are far more intelligent and wittier than most of the stuff on TV.

    I began making my little vids when I found out a friend of mine was making some. I had never actually considered making videos of my own… I thought Youtube had become a new TV station lol… full of high quality skits (Smosh for example) with professional-level editing and sound and all that good stuff.

    But, once I made my first video I was hooked.
    Seeing all these amazing talented individuals making a living just by living life… and being interesting while doing it… and recording it… makes me think that some day I could accomplish that as well.

    1. Well sir, you caught me a little late. But ShayCarl is pulling a Borat not a Bruno at the moment. Don’t forget mediocrefilms and clipcritics (who both now have personal accounts to complement their higher production stuff).

  23. I love ClipCritics, and only recently discovered Mediocrefilms.

    But yeah, Shay is definitely breaking out. He’s basically all over youtube, even in the ads around the videos lol.

    Even if I did catch you late, I’m glad to have found your videos at all.
    Besides, you’re still like a little kid. Not many people retain that quality their whole life. That’s why I like your vids. You’re mischievous lol… and your wife puts up with you, and even plays along. Your entire family is awesome.

    You’re a lucky man, Mr. Nalts :)

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