YouTube Changing Revenue Structures
In early November, YouTube began announcing to its content partners that it would begin changing its revenue structure. Until now Youtube has had a somewhat customizable revenue share agreement with partners, ranging from the now standard 55/45 share (55% of the revenue goes to the content owner, 45% to YouTube) to a 70/30 share, which allowed content partners to make much more money than some on the site.1
According to reports in Variety, the 70/30 share was originally used by YouTube to attract larger media companies to the site, whose uploaded content is typically of high quality and equally high appeal to YouTube viewers.2 Good examples of such partnerships are YouTube’s deals with the NBA or TMZ.com, whose channels filled with highlights and clips routinely rank in the Top 25 most watched on the site.3 By attracting these companies, YouTube also attracted the traffic that their content generated, resulting in a somewhat symbiotic relationship.
However, in one of YouTube’s many recent moves to increase transparency, the site is now switching over most content partnerships to the standardized 55/45 share. Instead, YouTube is offering a new draw; rather than a more favorable revenue share, YouTube is promising that all revenue generated past a content owner’s agreed upon CPM threshold, or “rate card,” will go directly back to the owner.4 While this potentially means that content creators may be able to make even more revenue, provided their CPMs exceed their rate cards, Variety points out that YouTube may also begin increasing CPM thresholds, making surplus revenue an almost impossible goal.5
Citations
1. Spangler, Todd. (2013, November 12). “YouTube’s New Deal Discomfits Hollywood.” Variety, 322 (1), 23.
2. Ibid.
3. Cohen, Joshua. (2013, December 9). “Top 50 Most Viewed U.S. YouTube Channels: Week of 12/06/2013.” Tubefilter. Retrieved from http://www.tubefilter.com/2013/12/09/top-50-most-viewed-us-youtube-channels-120613/
4. Spangler, Todd. (2013, November 12). “YouTube’s New Deal Discomfits Hollywood.” Variety, 322 (1), 23.
5. Ibid.
According to reports in Variety, the 70/30 share was originally used by YouTube to attract larger media companies to the site, whose uploaded content is typically of high quality and equally high appeal to YouTube viewers.2 Good examples of such partnerships are YouTube’s deals with the NBA or TMZ.com, whose channels filled with highlights and clips routinely rank in the Top 25 most watched on the site.3 By attracting these companies, YouTube also attracted the traffic that their content generated, resulting in a somewhat symbiotic relationship.
However, in one of YouTube’s many recent moves to increase transparency, the site is now switching over most content partnerships to the standardized 55/45 share. Instead, YouTube is offering a new draw; rather than a more favorable revenue share, YouTube is promising that all revenue generated past a content owner’s agreed upon CPM threshold, or “rate card,” will go directly back to the owner.4 While this potentially means that content creators may be able to make even more revenue, provided their CPMs exceed their rate cards, Variety points out that YouTube may also begin increasing CPM thresholds, making surplus revenue an almost impossible goal.5
Citations
1. Spangler, Todd. (2013, November 12). “YouTube’s New Deal Discomfits Hollywood.” Variety, 322 (1), 23.
2. Ibid.
3. Cohen, Joshua. (2013, December 9). “Top 50 Most Viewed U.S. YouTube Channels: Week of 12/06/2013.” Tubefilter. Retrieved from http://www.tubefilter.com/2013/12/09/top-50-most-viewed-us-youtube-channels-120613/
4. Spangler, Todd. (2013, November 12). “YouTube’s New Deal Discomfits Hollywood.” Variety, 322 (1), 23.
5. Ibid.
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Discussion of "YouTube Changing Revenue Structures"
Revenues shares with or without MCNs
If the content creator is a large company that represents itself, suchas CBS Broadcasting, the company receives this full 45%; however, if the
content creator is signed to an MCN, the network will receive this
revenue first, subtract its contractually agreed upon percentage, and
pass the remainder on to the creator.
Posted on 10 December 2013, 7:08 pm by Catie Peiper | Permalink
Determining Revenue Streams
Revenue streams on YouTube are determined by two factors: the revenueshare and the rate card. The rate card, or clicks per thousand
impressions (CPM) threshold, is a contractually agreed upon expectation
of revenue for each piece of monetized content. For example, content
creator John Smith may sign an agreement with YouTube — mostly like
through an MCN — that stipulates a $40 rate card. This means that for
each video that John Smith uploads for monetization, YouTube is
anticipating $40 of total revenue. Until now, even if a video exceeded
its rate card, the revenue share remained in effect such that YouTube
still received a large portion of the surplus revenue.
Posted on 10 December 2013, 7:12 pm by Catie Peiper | Permalink
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