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January 29, 2007

YouTube Revenue Share Raises Questions

Last week folks questioning whether Google would squelch its video site in favor of a YouTube-only offering believed they got an answer [no] when the company said it would make YouTube videos searchable through Google Video. Now, they're speculating about YouTube's apparent plans to share ad dollars with the users who drive their success.

According to BBC coverage, in a couple months YouTube will begin running ads (possibly very short pre-roll spots) to reward users for their creativity. "The offer applies only to people who own the full copyright of the videos that they are uploading to the YouTube website," notes the story.

Other CGM video sites like Revver already offer a cut of ad revenue to users. I suppose MySpace will be next. The thing is, paying thousands of people on a regular basis presents lots of potential factors YouTube would have to deal with. PayPal would be a good way to go, but then again, PayPal is an Ebay company and Ebay has a pretty tight relationship with Google rival Yahoo. They could also award points redeemable with online retail partners, possibly benefitting YouTube's relationships with advertisers.

One wonders whether the payment would be based on the amount of traffic a particular video drives, which leads one to extend that thought: what about other publishers or bloggers helping to drive that traffic? Do they get something out of it, too? The potential for handouts seems never-ending.

Other questions arise: if one of the biggest CGM sites out there does it, will online content contributors on other sites demand rewards? The forum posters? The blog commenters? The hotel reviewers? And what will become of the notion that YouTubers upload their videos for fun, not money, making for a much more naturally-engaged crowd of people? This certainly could affect the feel of the site and its ad potential.

Posted by Kate Kaye at January 29, 2007 4:00 PM

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