YouTube Plus “Next New Network” Equals “Huh?”

First- the disclaimers. I share in advertising revenue from YouTube. And I’m a content partner for Next New Networks, but not an employee or quite the size of these guys. I’m just some marketing clown with a video camera, no writing staff, but 175 million views. Big deal. My blog’s still ugly.

YouTube Rumored to Be Buying Next New Networks... Perplexing But Interesting

So I’m not privileged to any discussions between YouTube and Next New Networks, and know nothing more about the alleged acquisition than I’ve read here. While I have been aware of rumors of someone acquiring NNN for a couple months, I didn’t even seriously consider the possibility that Google/YouTube would buy it. So it was fresh news to me when I got a text from ZackScott today (he wanted to brag about his recent GoogleTV gift, and how he’s become a bigger sellout than me).

My thoughts on the potential of a deal. First, “Why It Makes Little Sense At First Glance”

  • YouTube took Google far out of its core competency (from search machine to platform)… Next New Networks is another dangerous stretch. A real stretch. I worked for an Internet agency that was accidentally purchased by a telecommunication firm. That kind of stretch.

I can only imagine some of the conversations between the right-coast, roight brained NNN gang and the left-coast, left-brained engineers. It could be like a toaster trying to talk to a boom box.

  • YouTube already has deals with many content creators, so I’m not sure what it’s getting beyond some bright leadership, a library of content to monetize in new ways, and some production/marketing experience.
  • The relationship is strong between YouTube and NNN, so how is this strategic enough to offset the perceptions that Google is now encroaching on the content space? Could this send the networks a signal that Google is now a competitor to networks and studios?

Why It Makes Great Sense

  • I’ve written before that Madison doesn’t like YouTube (click to read “How Madison Avenue is Killing YouTube“). And there needs to be a buffer between creators and agencies. NNN could play a valuable role in buffering agencies from touching the YouTube rose’s engineering thorns… if YouTube/Google allowed it.
  • The control of NNN content will give YouTube a sandbox to try new content-delivery models via phone, television and mobile. It’s a sandbox but with real humans.
  • There’s a name for this. It’s called vertical integration, and it can be healthy as long as it’s not creating a monopoly (which clearly isn’t the case here).  Owning a network can help YouTube engage with other networks more effectively. A simpler example: if I run a line of beauty products, its worth owning one salon… I get real-world experience that rivals laboratory R&D, and it can inform my products.
  • This provides YouTube a presence on the East Coast (where most of the budgets originate) that is more meaningful than a sales office. Sponsored content, I believe, will be bi-coastal.
  • It could be a step toward better content partnerships. CEO Fred Seibert is a producer of some of Cartoon Networks greatest shows, and a former MTV creative director. So he’s got some clout in the entertainment world that can make/break YouTube. Having network experience inside Google will help Google be less aggressive with the advertisers YouTube needs to court. Oh, and by the way… NNN is one of the few web studios that has endured the implosion of the “New Establishment” (the name I used in my book to refer to emerging studios).

I think I sufficiently hedged this post so that I retain rights to say “I told you so” if this deal is a great success, and hires me… or if it flops insanely.

What do you think? Or don’t you care? See this is my  problem… when amazing news like this breaks, nobody in my IRL circle cares. Folks at my client and in my family don’t give a rats ass, so I need to work it out here.

One Thing You MUST Know About YouTube

The next time I speak at a conference and I ask “who’s heard of Fred?” and “who’s heard of Annoying Orange?” you’d better raise your hand. Happy Birthday to Annoying Orange, who was created by Daneboe a year ago.

In its first year of life the orange with a human mouth and face is the 10th most-subscribed YouTuber with nearly 300 million views. Can you name anyone else who was more famous at the age of one? The Lindbergh baby doesn’t count… he was 20 months when he was kidnapped.

I wonder what I'll be for Halloween?

Oh, and yeah that’s me playing the knife in my second cameo; see first knife cameo, or see my behind-the-scenes PSA about knife safety… Of course I’m not as cute as the wee wii pony or a flaming baby marshmallow with helium voice.

Ashkan Karbasfrooshan’s Magical Money Pyramid

WatchMojo CEO Ashkan Karbasfrooshan has written a series of smart articles about online video in TechCrunch, and here’sKarbasfrooshan’s recent “How to Make Money from Online Video.”

TechCrunch is totally working my content corner, and if I had a pimp he’d comb his afro and kick Michael Arrington right in his man crunch. In fairness, Arrington wrote about me like once… two years ago. But since then? Not even a TechCrunch footnote to the new version of my free eBook “How To Get Popular on YouTube Without Any Dandruff.” See if I share any profits with Arrington when he’s dirt poor because Google ripped all his content.

Anyhoo, Karbasfrooshan’s recent article is particularly smartish because Karbasfrooshan includes a pyramid including my name. In general I’m a big fan of pyramids. They’re the new quadrants. And when Karbasfrooshan includes my name (Nalts),Karbasfrooshan’s pyramid take on a sophisticated, glistening appeal. I’m listed with iJustine and Fred, right on the bottom of the “prosumer” level — just above that mud slop you call user-generated  content (UGC). It’s not profitable, but I keep my costs down and I make it up in volume.

Here’s Karbasfrooshan’s pyramid below. Karbasfrooshan’s article is goodly written too, but if he’d have quoted my blog it would have been more gooder. I hope Karbasfrooshan isn’t right about the damned prerolls. The dropoff rate is a deal killer.

And I hope they make a new ice-cream called Karbasfooshan. I’d have 4 bowls for supper.

P.S. Karbasfrooshan

Exclusive: How Much Money YouTube Partners Make

{Update from 2013 reveals YouTube stars making $4 million plus per year}

How much do YouTube stars make each year? Oh for goodness sakes. Just like my same 5 YouTube videos (see right column of channel page here) represent the majority of my online views… It seems that most of WillVideoForFood’s blog traffic comes from people searching for how much YouTubers make. If you’re curious, read on. If you want to make big bucks, buy my book first. You’ll still be facing tough odds, but at least you’ll wander into the jungle equipped with some survival tools.

We YouTube “Partners” (or “stars” as I hate saying) are all contractually forbidden to share our revenue. But I’ve given hints and clues over time. For those of you who Googled your way here, I’m both a marketer/advertiser and a creator/YouTuber, so that gives me two lenses into this Da Vinci-Code like mystery. Davinci made me think of “Da Bears.”

I’d estimate there are have at least a few dozen YouTube Partners earning $100K per year. That’s great money if you’re in your 20s or 30s and have minimal costs in production or overhead (like 4 kids and a horrific mortgage). But it’s a rounding error for a professional content creator or network.

To calculate a particular Parner’s income, here are some tips:

  • You basically take the Partner’s total views for the month, multiply it by a fraction of a penny, and you have a rough idea. TubeMogul‘s Marketplace shows some of the most-viewed people (and their monthly views). But remember: the most-subscribed are not necessarily most-viewed and vice versa. YouTube doesn’t give a hoot how many subscribers you have (although that certainly helps drive views, but increasingly it seems less powerful than being a “related video”). In general, the commercial content is getting more daily views but the amateurs have a lock on subscribers.
  • Most ads are placed by advertisers based on total 1K views, but some is on a per-click basis (CPC text ads placed by Google Adwords/Adsense). Google/YouTube is usually paid by an agency or media buyer a CPM (cost per thousand, say between $5 and $25 dollars per thousand views), then shares some of that with the creator. This can be highly misleading, because:
    • Some views earn nothing (if they’re embedded and no ad follows it).
    • And increasingly advertisers are paying a high premium for specific content they commission, target, or hand select. Sometimes this might average a few bucks and others it might be much higher… $25 CMP was the published rate of InVideo ads and I know of specific integrated campaigns that command a higher premium from YouTube. Yey!
  • Another confounding variable: potty-mouthed creator turns away advertisers. So watch the ads on your Partner for a while. Are they premium InVideo ads with accompanying display (square) ads? Or are they garbage Adwords/Adsense ads?
  • The text ads may SOMETIMES be paid on a per-click basis, which can make them fruitless or profitable depending on people clicking and buying the advertiser’s product (the latter must occur, or a savvy advertiser will quickly stop the campaign that’s raping them of click dollars and not generating business). I was telling my YouTube buds to turn these off because they’re ugly and don’t make much money, but a few of them gave me a stern stare like they knew otherwise. So whatever… maybe they make money and maybe they don’t. I don’t get a breakdown on them, and they’re still ugly.
  • Then you have to factor in “sponsored videos,” where a YouTuber promotes a product or service for a flat fee (or variable based on views) via Hitviews or related companies. That can easily be more than YouTube shells out per month for ad sharing. The going rate here is incredibly wide: from $1K to $20K and higher per video.

So in conclusion:

  1. Do your own math using monthly views on TubeMogul and assuming some CPM (cost per thousand), but recognize YouTube takes a cut and some of the advertising inventory isn’t sold or is driven by keyword Google adsense text thingies. Maybe the creator/partner gets a few bucks per thousand views and maybe more or less.
  2. Use some of the assumptions above to calibrate your estimate if you’re trying to peak into the W-9s of your favorite “Stars” like Fred. There are now dozens of popular YouTube people that make a full-time living on YouTube revenue, and I’d guess a lot of $50K-$100K per year people. I am not among the full-timers. With a family of 6, I gotta have a day job too. But Shaycarl, Sxephil, Charles Trippy, Michael Buckley and many more… they’re full-time at this. If I was making the bucks I’m making via YouTube after college, I’d probably go full-time too. Fred? Let’s just say he’s got college covered, or a nice nest-egg.
  3. Before you get excited (or jealous), it’s a long haul to cashville. And if you start with the hope of making money, you’re doomed. You need to LOVE it, and be extremely patient as the road to loads of views is tougher to climb, and requires an ass-load of persistence. Start as a hobby and “just keep swimming.”
  4. Finally, there are two forces at odds that impact the sustainability of this revenue for YouTube amateurs. First, we’ll probably see continued competition from more professionally-produced content that fetches higher ad dollars because it feels safer to squeamish media buyers (see, I’m not calling them all dense anymore… only the ones that don’t read this vlog). But the good news is that dollars are projected to grow dramatically. Currently, as a marketer, I’d argue that YouTube is selling itself short.

How’s that? About as specific I can be without breaking my contract or confidence from my friends.

I know some of you peeps know more than I do, so feel free to comment below anonymously or not. Da bears.

What Is the Purpose of a Video Ad?

There are really four distinct ad formats on YouTube, the online-video site with the lion’s share: display, text ads, InVideo ads, and video ads (10-30 seconds). Unlike most sites, YouTube forbids preroll, but does offer full-motion video ads if the user fires the player (in the home-page ads or in display areas).

So let’s talk about your advertiser’s goal for each, and then let’s give a good case study.

  1. Display: Your display ad (a flat graphic) should primarily brand since 95 percent of people will not experience anymore than that. However if you want click-thrus of greater than a fraction of a percent, then have a good call-to-action. Nothing sells like more video content — especially if it’s non promotional.
  2. Text: Text ads are dirt cheap, but largely ignored. However you can brand on these and run them CPM (cost per thousand), but the ad will eventually fall aside to CPC (cost-per-click) ads that are more profitable and maybe more relevant. So the smart thing to do is be extremely targeted and buy specific keywords, then have a specific call-to-action.
  3. InVideo: InVideo ads remain novel, and give the advertiser the “hard to ignore” exposure of a banner that bursts into the video’s bottom 20%. Usually these are sold with accompanying display ads adjacent to the video. Here’s a good chance to brand (again- even a high click through will be in the low single digits). So focus on branding, but invite people to see more content.
  4. Full-motion video ad: Here’s an opportunity to entertain, brand, and invite people (if necessary) to the next step of the sales cycle (for more content and commerce).

The bottom-line is that advertising against online-video means you have to engage the viewer in an entertaining format. Don’t expect many people to leave my CharlieCam video to buy a helmet cam (even though I am rather impressed with instant targeting last night by a commerce site). Instead, promote more content. ZipIt Wireless (which sells a device and service for instant messaging) used YouTube’s Fred in ads, and invited people back to a campaign site (FredOnZipIt) to see more videos. My guess is that about 2-4 percent of viewers (in the early part of the campaign) visited the campaign site, and of those maybe 5 percent purchased ZipIt devices (wild guess).

Did that math work for ZipIt? I notice ZipIt’s ads aren’t popping up on Fred’s videos or elsewhere, so maybe not… or perhaps the company is assessing results. Either way, this campaign was in the right direction — use content to lure the potential customer, and then expose them further to the product or service (in a web experience that can do that in ways television can’t).

Now look at the Burger King campaign for an even better case study. It’s an integrated campaign between a comedy show and a fast-food restaurant which might otherwise have a tough time getting people to engage in a branded experience.

Burger King is sponsoring Seth Macfarlane’s “Cavalcade of Cartoon Comedy.” Although the creator of Family Guy produces edgy stuff far more risque than much of the YouTube amateur Partner content, it’s instantly recognized.

Macfarlane also probably made a good choice to align with Burger King, because he sure wasn’t going to cover production costs of his short web series via ad-sharing through online video. And he’s also enjoying the publicity that Burger King is making for him.

It’s another page out of the Star Wars Happy Meal promotion playbook, but a good reminder that online-video is growing up.

YouTube’s “Fred” to Appear on iCarly

Fred with Hannah Montana or Miley Cyrus or iCarly or whateverI’m Fred’s dad (see video), and I didn’t know until I’d read Daisy Whitney’s Twitter that Fred is appearing on Nickelodian’s iCarly. I’m pretty sure iCarly is not the same person as Hanna Montana but she may be Miley Cyrus.

In any event, the Internet squeeky-voice YouTube viral sensation already shot his part of the production, but it’s not scheduled to air until February 2009. I sure hope he got some footage of Miley or whatever her name is.

Photo from Celebrity Interest blog. Turns out it’s a photo of Fred (Lucas Cruikshank) and iCarly (Miranda Cosgrove).

Here’s hoping this post doesn’t start a political debate.

Understanding “Fred,” the Squeaky-Voice YouTube Star

Fred on youtubeFor weeks I’ve been perplexed by Fred, a squeaky-voice YouTube character played by Lucas Cruikshank (Fred’s real name). He caught my attention when I found him appearing in advertisements on my own videos. Lucas lives with 6 siblings in Nebraska, and has emerged as one of the fastest-growing YouTube personalities.

I couldn’t understand the Fred phenomenon and the best explanation anyone could provide (and I asked several of the most popular Tubers for their best theory) was that it’s what the key younger demographic wants. But that’s not an explanation, is it?

Alas I found this analysis by the Sydney Morning Herald, and it all makes perfect sense:

While many boys emerging from their tween years drift into the monosyllabic age of deep introspection and rebellion, the videos made by this teenager from Nebraska reflect a garrulous sense of childish fun.

So now I think I get Fred’s appeal. His manic moves and piercing voice may annoy me, but I understand why people are compelled to watch. The fast-paced and childish bits maybe allow people to forgive their own lack of maturity.

Anyway, I woke up this morning feeling compelled to impersonate Fred’s father. Of course, Fred’s father is in jail so maybe I’m his Uncle (which is ridiculous, but believable by many YouTubers that still think Dylan is my son). Anyway- would welcome ideas on where to go with it, as I’ve only watched a few of Fred’s videos. And if you’re a Fred fan, I could use any script tips that would ensure I dovetail off Fred’s plotline well enough.

What I’m thinking. Got ideas?

  • Fred’s Uncle explains why dad’s in jail. Maybe blames Fred.
  • The Uncle is squeaky voice too, but maybe it’s creepier. So I talk slow and deliberate before speeding up the voice.
  • There’s humor, but almost a playful sadness or dysfunction that’s revealed about Fred’s family- so we understand his behavior even more.

And I haven’t forgotten about the spoof of the paper car. 🙂 Thanks for your ideas on that!

How Much Money Does a YouTube Partner Make?

All the YouTubers are cruising with these. Let's not let them be the only ones, dangit.
All the YouTubers are cruising with these. Let’s not let them be the only ones, dangit.

Editorial Update…. here’s a newer post on how much YouTube partners make. Since this post gets so many daily views via search engines, let me answer your question simply. It’s a fraction of a fraction of a penny per view. It’s not enough to cover the mortgage for most, and it’s certainly not yet the reported $2.50 per 1,000 views. It’s often far less, and varies greatly on whether the views have InVideo ads (YouTube charges $25 per thousand and shares that with creators) or the flat square ads (cost far less for advertisers, and doesn’t pay creators). Although I can’t reveal my income, I can tell you it’s highly influenced by my top 5-10 videos, which get millions of views per month (as opposed to the new ones). That said, if you get millions and millions of views per month and live cheap, you could quit your job and buy my dang book, “Beyond Viral.”

Beyond Viral: Tips on Marketing You & Company on YouTube

YouTube’s Fred was rumored to be making seven-figures, but Google clarified that as six figures. But if you take his 350,000,000 views and multiply it by a conservative $1 per 1,000 views…. you’re talking $350,000.00. I’m making more on YouTube than I made in my first job out of school, but with four kids and a lot of debt, it’s not enough for me to pull a Sxephil, Shaycarl, or Michael Buckley and rely on it as a primary income source.

Oh how’s THAT for a blog title, when you’ve signed a confidentiality document that precludes you from talking about your revenue as a YouTube partner?! Don’t worry, YouTube. I’m not breaking rank. But I’m very interested in what people THINK partners are making.

Before YouTube, I’ve always been transparent about my revenue related to online video. I feel that’s part of my role on this blog… to give creators a realistic sense of what they can make in online video (beyond food). Alas, YouTube prohibits it for reasons that aren’t quite clear to me — are there tiers? If compensation varies, then I can be sure I’m at the bottom based on my complete lack of negotiation skills.

I do believe that some prominent YouTube partners are beginning to earn what amounts to a full-time job through the site. But I also understand that some of the early Partner contracts are up for renewal about now.

  • Could some be overstating their earnings? Yes. But some partners are doing $10K a month, especially those that already had an audience and moved them to YouTube. And some creators get millions of views consistently.
  • When some say they’ve quit their day jobs, is that because their costs are so low that even a couple grand a month can sustain them? Maybe.
  • Could the earnings be based on a point of time where, say, they had a video featured that was monetized? Sure.

While there’s no question that many could still earn more money per hour doing something else (like consulting or bartending), I am happier with my income from YouTube than what I was making from YouTube before I became a partner (zero). And while I’m not sure whether the per-view profit is as strong as Revver’s and Metacafe’s (I don’t even have access to any such metrics), I’m not getting any significant views on those sites anymore. So YouTube is far outperforming them.

My advice remains: if you’re looking to get rich, create a bunch of mortgage blogs and sell adsense. Or go into financial services or recruiting like the former co-worker that just called me to “network.”

But if you love video and the community around it, then it’s nice to get an income subsidy that helps you justify the time commitment to yourself, wife and family. I remain optimistic that more of the top creators of YouTube will be able to quit their day jobs, but that’s partially because amateurs will slowly get trumped by the semi pros (whose day job is performing or video creation). It’s already happening. While the amateur vloggers are holding top positions, we’re seeing more semi-professional content done by comedy troups, bands or known offline celebrities.

Now here’s the purpose of my post. I’m curious what people THINK partners make. I can tell from a lot of comments that people WAY over estimate what creators make: “You get paid for this shit?” “You’re asking us for ideas? You’re the one who gets paid.” I can’t participate in this thread, but it will be fun to watch.

And if you’re not a Partner yet, don’t let it upset you unless you have hundreds of thousands of monthly views. Grow the audience and reapply later. Even if YT did make you a partner, it’s not worth it unless you have some views. Take it from a guy that tried Google ads on his blog for a while, and quickly realized that it wasn’t worth the cosmetic interference.