It’s time for Google and YouTube to share the wealth generated through advertising displayed on the video sharing site, though it’s a model YouTube’s founders may not have wanted to embrace.
Sometime in 2007, YouTube will start sharing advertising revenue with the people who contribute video content to the site. The people behind LonelyGirl15 are probably smacking their heads in Homeresque “D’oh!” fashion, considering how popular their series was on YouTube before it was outed as a fake.
The Financial Times cited YouTube’s co-founder Chad Hurley on the decision to let others share in the site’s good fortune, now that it has been sold to Google for $1.65 billion and made Hurley eligible to be a speaker at the World Economic Forum, recently concluded in Davos, Switzerland:
Mr Hurley said YouTube had resisted this business model before because “we didn’t feel it was a great way to build a community. We wanted to keep it pure.”
People were principally motivated to share content online “to get a reaction,” he added. Since being taken over by Google, however, “we are getting an audience large enough where we have an opportunity to support creativity, to foster creativity through sharing revenue with our users,” he said. “So in the coming months we are going to be opening that up.”
PaidContent’s Rafat Ali commented about the story, calling it “vaporware about vaporshare”:
This is even more tenuous as announcements go than the promise of an anti-piracy YouTube was supposed to have launched by the end of last year. The caveats about this vaporshare “news” from Hurley: if and when it happens, the offer would apply only to people who own the full copyright of the videos that they are uploading to the YouTube website, Hurley added in an interview with the BBC, but of course that is an obvious thing to say. It will be an ad-share, with very short pre-rolls…a clip of three seconds length was one of the options, although the details had not been worked out yet.
Other video sharing sites that have revenue sharing in place, but not YouTube’s reach or audience, felt the reverberations of the announcement according to GigaOM leader Om Malik:
If you are Revver or Metacafe, it is also the worst day of your life, because now a deep pocketed incumbent is going to play havoc with your business model, and hope to run you out of town.
YouTube-Google are using their massive cash reserves and their seemingly unstoppable ad-machine to take the online video sector by the scruff, and giving it a vigorous shake, in hopes that some of the weaker ones would suffer a coronary.
Is the announcement an indication that the rough and ready world of video will receive a vigorous scrubbing in the hopes of earning some filthy lucre? Some video makers will probably try to make their work more buzzworthy in the hopes of cashing in some ad revenue. If the profit angle motivates people to make better videos, that should be a good thing for YouTube’s viewers.
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David Utter is a staff writer for Murdok covering technology and business.
