Conclusion: How To Make Profit Off the Long-Tail
In 2004, editor of Wired magazine Chris Anderson wrote an article (later expanded and published as a book in 2006) about the internet and the “long-tail,” describing how the ever-expanding avenues of content available on the internet were creating smaller, niche markets and disrupting more traditional mainstream or “broadcast” markets: “When consumers can find and afford products more closely tailored to their individual interests, they will migrate away from hit products.”1 For years YouTube has seemed to exemplify exactly this, particular when compared to more traditional media outlets like film or television.
This is good news for anyone looking to make money in the YouTube economy; while the individual revenues of each niche YouTube channel might be significantly less than the revenue generated by a broadcast television show, the market is currently so hyper-segmented that there is room for an almost infinite number of monetized channels, each making a small profit through individual revenue streams.
This is even better news for the MCNs, particularly the larger MCNs like Maker Studios or Fullscreen, since they receive a percentage of each of the revenue streams for the channels signed to them. Considering Fullscreen recently reported having more than 55,000 content creators signed to them, the generated revenue represents a none-too-insignificant profit.
In this light, the truth about the YouTube economy is harsh. Unless you are lucky enough to find yourself as an overnight YouTube sensation, the odds of "making it big" on the site as simply a content creator are relatively low, even when signed to an MCN. It might, however, make you just enough money to pay the bills. Rather, in order to make a large amount of money in the YouTube industry, you must first have access to more than one small revenue stream: perhaps through affiliating channels, as MCNs do, or by offering third-party services like a number of the technology and analytics companies do.
This is why the second edition of the YouTube Economy guide will expand to consider two particular ways of disrupting the YouTube industry, either by creating your own MCN or by creating your own proprietary content management and analytics tools.
Citations
1. Anderson, Chris. (2004, October). “The Long Tail.” Wired. Retrieved from http://www.wired.com/wired/archive/12.10/tail.html
This is good news for anyone looking to make money in the YouTube economy; while the individual revenues of each niche YouTube channel might be significantly less than the revenue generated by a broadcast television show, the market is currently so hyper-segmented that there is room for an almost infinite number of monetized channels, each making a small profit through individual revenue streams.
This is even better news for the MCNs, particularly the larger MCNs like Maker Studios or Fullscreen, since they receive a percentage of each of the revenue streams for the channels signed to them. Considering Fullscreen recently reported having more than 55,000 content creators signed to them, the generated revenue represents a none-too-insignificant profit.
In this light, the truth about the YouTube economy is harsh. Unless you are lucky enough to find yourself as an overnight YouTube sensation, the odds of "making it big" on the site as simply a content creator are relatively low, even when signed to an MCN. It might, however, make you just enough money to pay the bills. Rather, in order to make a large amount of money in the YouTube industry, you must first have access to more than one small revenue stream: perhaps through affiliating channels, as MCNs do, or by offering third-party services like a number of the technology and analytics companies do.
This is why the second edition of the YouTube Economy guide will expand to consider two particular ways of disrupting the YouTube industry, either by creating your own MCN or by creating your own proprietary content management and analytics tools.
Citations
1. Anderson, Chris. (2004, October). “The Long Tail.” Wired. Retrieved from http://www.wired.com/wired/archive/12.10/tail.html
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