Kyle from Southpark puts it well in this 30-second clip from “Canada on Strike.” The clip’s called “The Promise of Future Revenue.” Thanks to Jan for finding it.
Boy I’m sure glad that’s over with. Me too. Yeah, but you know I learned something today. We thought we could make money on the Internet. But while the Internet is new and exciting for creative people, it hasn’t matured as a distribution mechanism to the extent that one should trade real and immediate opportunities for income for the promise of future online revenue. It will be a few years before digital distribution of media on the Internet can be monetized to an extent that necessitates content producers to forgo their fair value in more traditional media.
In this part of “Canada on Strike,” the Southpark folks meet some YouTube weblebrities (the cliche one-hit wonders). There’s something pervursely symbolic to see all of the Internet stars — laughing baby, sneezing panda, gopher, Chris Crocker, Chocolate Rain, Tron guy, Numa Numa — end up in a bloody mess on the floor.
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.
Metacafe set a higher bar for revenue-sharing “Producer Rewards” program, much to the dismay of some creators who saw their popular videos drop from the program (see Metacafe forum).
The initial participants of YouTube’s Partnership program (which shares revenue with creators) hit their one-year anniversary in March. Although YouTube and its creators are not permitted to disclose the specifics, I do have sources that reveal early participants received fixed fees that (in some cases) allowed them to quit their day jobs. The rest of us joined when YouTube had adjusted the program so that we’re paid a percentage of ad revenue, and I can’t disclose specifics. Compared to nothing, it’s welcomed cash. But it’s far from enough to live on.
For sure, some creators are doing well with sponsored gigs, DVD sales and rare television contracts. I’ve managed to augment my income by creating sponsored videos, and have done fairly well in the past 6 months. But it’s certainly not enough to quit the day job, and I’m not patient or risky enough to hold my breath for a lucrative television contract.
Solution 1: Pay for Content?
With few exceptions, viewers don’t yet pay for amateur content. This is especially true for early adopters of online-video, who have enjoyed free video, including amateur stuff, copyrighted material via YouTube, and free movies & music via P2P sharing. As the mainstream audience moves in, the market for paid content will increase, but mostly for professionally produced and well marketed video. Perhaps we’ll see a third-party aggregate some second-tier amateur content and develop a paid subscription model (especially if that content can be fed into PC, mobile and television). However an individual amateur would inarguably lose the vast majority of their audience if they required the audience to even move to an alternative channel (their own ad-supported site) or charged for it. Even Howard Stern lost most of his audience when he moved to Syrius. So it’s no surprise that I’ve sold only four copies of the “Best of Nalts” DVD.
Solution 2: Ad-Supported Content
As much hype as we’ve seen about consumers avoiding ads, this is the most viable, sustainable model. Simply put, good content won’t sustain for free, and amateur content hasn’t a prayer unless it’s supported by ads. Currently, this model is rate-limited by two sad realities. First, advertisers have been slow to buy ads around amateur content — even YouTube doesn’t appear to be selling its full inventory of InVid (overlay) ads. Secondly, there’s not yet broad enough distribution of this content.
I’ll argue that good video content and consumer demand exists, but people there aren’t yet enough viewers of amateur content to warrant significant dollars from advertisers. And we’re in dire need of an easy vehicle to view UCG via our mobile and television boxes, which will increase both viewer demand and advertising inventory (my next post will explore web/TV devices, which I believe are the lynch pin here).
Boy I’m sure glad that’s over with. Me too. Yeah, but you know I learned something today. We thought we could make money on the Internet. But while the Internet is new and exciting for creative people, it hasn’t matured as a distribution mechanism to the extent that one should trade real and immediate opportunities for income for the promise of future online revenue. It will be a few years before digital distribution of media on the Internet can be monetized to an extent that necessitates content producers to forgo their fair value in more traditional media.
