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A (Former) YouTube Star's Rant: We'll Go It Alone, Thanks

By - May 14, 2007

Youtube-2

Last week YouTube announced a new partners program (TC coverage here, Om’s first coverage here). The program elicited a fair amount of negative response – see the comments in that partners program post – and a lot of head scratching as to how YouTube chose its partners, and what the Terms of Service might be. I happen to be friendly with a number of well-known YouTube “stars” and I emailed one of them for a read. What I got back was quite a rant. Below is a response that I can verify is from a well-known video blogger, who has a very large audience, but who asked for anonymity.

I have spoken to the folks at YouTube about this and suggested that they be given a chance to respond to this post, once it goes up. That certainly seemed fair to me. Should they wish to, I’ll post their response here. Meanwhile, read on, in the first person words of a former YouTube star….

###

I’m a YouTube star, but YouTube wishes I wasn’t. They would like to pretend I don’t exist, rather than admit there are several roads to financial and critical success that don’t lead through their corporate headquarters.

If they could, YouTube would love to become the next gatekeeper, the next network. And in fact they have, they’ve gently plucked their stars and anointed them with advertising dollars. And someday you too can be touched by their magic wand and granted the status of weblebrity if you pass the test.

Our site has won a lot of awards, been seen tens of millions of times, and is one of the most subscribed to around. But somehow, it was left out when “YouTube Elevates Most Popular Users to Partners“. Okay, that’s cool.

We were approached last year, sure. They talked all about how we should shut down our personal domain and run everything through their site, and how that soon they were going to add a podcast feature to the site. They asked us if we’d heard of podcasting?

“Um, yeah, we’ve created two of the most successful video podcasts,” we responded.

So that’s the You in YouTube. They couldn’t even be bothered to spend five minutes on our website to find out anything about us. Sweet.

The biggest point of friction has been their opacity and lack of communication. I know they were in startup mode, but seriously, you’d think they’d want to foster good relationships with the people that were supplying the only legitimate content to their sites. We were the ones that were the new way — the new media creators.

And the big question for everyone was how are you going to make money? Well, we certainly were not making any green from YouTube. And until the last three months, they weren’t publicly promising any cash to anyone. So what were we supposed to do? Just pray really hard that YouTube would someday pay us? That’s sorta irresponsible. So we did what anyone would do, we started evaluating the opportunities that presented themselves and then took advantage of some of them.

So when YouTube finally got its act together and offered us an advertising split, it was too low an offer. We were doing better without them. And with less strings.

But seriously, why was that the first time they talked to us? Well actually they did ask for our mailing address early on, to send us T-shirts (they never arrived).

If we had a dialog from when we really started to take off, this situation probably could have been avoided. But they talked to us once, knew nothing about us, and expected us to just be so pleased to be in business with them.

Get over yourselves.

Right now YouTube has a three tiered system, the top, or big media, the middle, indie content creators with audiences, and the bottom, random user submissions that get small numbers of views.

At the top they’ve got some deals in place, but they’re also getting sued in a big way. And the new company from Fox and NBC is also going to give a lot of competition.

The bottom is pure long tail. The only money there is in the aggregation of content and selling ads against the massive volume of vids with low views. YouTube will continue to be king here.

The middle is where our site lives, the indie content creators. This is the space that YouTube could just own, if they invested really heavily in terms of ad splits and career development. The terms that YouTube offers to these middle players will set the floor for what every other site has to offer the talented upstarts that create fun and entertaining shows.

They need to be aggressive in identifying the new talent the people that can get more than 50k in views on their vids. And then bring them into the fold, help them. Let them know about podcasting, help them build a good merch operation, sell high value advertising against their content.

This involves much more than they are doing now. Now they just elevate these indies into Partner status. Which means they give cross promotion on the site, the future promise of preroll/postroll ads, and a split of the advertising that appears on the page views on their site.

What they are doing now is a short term play to get and keep the eyeballs of those indie shows. But what happens when those contracts are up? And the creators haven’t really developed their careers?

Some shows will stick with YouTube, but the savviest and the most commercial ones will move to other video sites that can provide better splits or signing bonuses. Creators will start to realize that their storytelling talents are rare and valuable.

I don’t know the terms this round of authors were guaranteed by YouTube, but I do know that we were offered was okay money, but something that we’ve already surpassed. And then when you factor in merch sales, and the value of having our own users and pageviews on top of that and controlling our own brand, we’re coming out miles ahead of a typical YouTube power user.

So what happens next? I dunno. I mean I know YouTube’s got deep pockets now, but I also know that their technology is pretty commodity ( http://www.jeroenwijering.com/?item=Flash_Video_Player ), and I know if these deals aren’t that successful, that the creators will flee to some other deep pocketed competitor.

My biggest hope is that these creators can walk away. How many of them have a good lawyer reviewing that contract?

Whatever YouTube is paying will be the marker. I expect Microsoft, Yahoo, and other players will follow suit, but with better terms to attract the top talent.

Also I think that new kinds of media services companies – smaller and more focused than YouTube – will continue to cherry pick the best and most commercial properties to sell ads against at a much higher dollar value than what YouTube is able to do.

###

Thanks for starting the conversation, and now, let’s continue it ….

My thoughts: I’m guessing that this partner pilot is just that, a pilot, and the terms are not totally nailed down yet. I’m also hoping that YouTube does *not* act like a typical media company and require that its monetization partners sign exclusive distribution and intellectual property deals. That’d be a big mistake, I think. My caveat is this: My company, FM, works with a limited number of well known video bloggers. Clearly, I have an interest in this debate.

What do you think?

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  • Oliver Thylmann

    This pretty much sounds like what sevenload.com is doing with their shows. They have lots of specials on there already and through their investment with Burda got more. Now for example you have the premier of the manson music video. Maybe people will just move there because yes, the video player is a commodity, the bandwidth management isn’t yet but we’ll see where it leads.

  • http://www.revver.com Angela Wilson Gyetvan

    Great commentary. Full disclosure: I work for Revver. So, obviously, we’ve been keeping a close eye on this. Something to note: comments made in last week’s Businessweek.com article about this indicate a certain “typical media company” POV regarding exclusivity. Look here for Liz Gannes’s recap: http://newteevee.com/tag/BusinessWeek

    At Revver, we’ve always been proud of our focus on the creator, particularly the indie content creators who are truly powering this media. We’re delighted to help them succeed on their own terms, with their own brands intact.

  • Pat Race

    As a short filmmaker trying to get a foothold, I’m interested in being able to make enough to perpetuate my work but I’m also really picky about income sources.

    My biggest annoyance is the number of contests and partnerships that will take all the right to your work in perpetuity and *maybe* toss back a few nickels your way. Content gobblers are everywhere and I’m not going to give away ownership of my content for a little publicity.

    YouTube has been a good place to get some exposure but I don’t think I’ll ever give up having my own site for my comics and films. I much prefer the idea behind Democracy player and wish there were a YouTube/Democracy crossbreed geared towards independent content creators.

    My biggest problem with YouTube is that the good independent content is lost in a sea of Turtle Kid shills and According to Jim clips. Remember mp3.com before they started shilling for the big labels? I want something like that for filmmakers. No punch the monkey banner ads, just a community working towards improvement of the art form.

    Anyone else want something like that? Maybe we can talk some more.

    Pat Race
    akrobotics.com

  • http://www.myspace.com/michaelkuhlmann epictum

    You get what you pay for. YouTube doesn’t have a sign-up/cancellation fee, bandwidth overages or any other type of service charge. It’s a good promo tool — and if your content’s good, you’ll be able to reap some benefits of it. If you don’t like the service, try Revver or something else and make sure you’re always up to date on the latest scripts/technologies to prevent piracy. It’s that simple. No need to throw a big hissy fit over this.

  • Tim Street

    Thanks for posting this rant John.

    It looks like the race is on and I’m sitting here with a smile on my face watching it. Please keep this conversation going.

  • j_king

    Stick with owning your own content.

    The niche markets are big enough to start, but they’re still not selling out stadiums… yet. When the ‘net population grows, so will the niches; that’s when we’ll really see how valuable our content is. YouTube, Revver, et al may be the in-way to get revenue now while the audiences are small, but 3 – 4 years down the road you’ll find yourselves as a drop in the bucket of water.

    If you hold on to your properties now and support grass-roots projects like Democracy; there could be the possibility of dealing with agencies like FM directly instead of letting the profits be soaked up by “middlemen” aggregation services. Stick it out now and don’t sell out — you might end up thanking yourselves.

    The media landscape has been changing for years. It’s fun seeing the seeds that were planted to start growing.

  • Pete

    YouTube is paying it’s chosen content providers $5 per thousand views.

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    Pete
    you tube must free..

  • Wild

    I am glad to have the change to read all. Very useful information for all who has interest in this area. I personaly had great advantage from these informations..

  • http://www.e-bizuteria.com Biżuteria

    Is anyone making any money out of these types of sites, such as Google Adsense and the like?

  • sennik

    Cool site

  • http://www.sennik.publicweb.pl

    Good article

  • http://www.polskieblogi.co.uk/londyn/ Londynek

    Thank you! Very nice and interesting article.