YouTube to split the profits with video amateurs

 

Gallery

By Reuters

Posted on 26 Aug 2009 at 08:35

YouTube will start sharing advertising cash with users who upload the most popular clips of everything from skateboarding dogs to dancing babies.

The Google-owned video site will extend its YouTube partnership program to allow individuals to make money when their videos are deemed eligible, based on the number of views and how widely they are shared with other users.

YouTube has been criticised by some Google investors, who complain that the site has failed to capitalise financially on its immense popularity.

The JK wedding dance video was seen more than 10 million times in less than a week, but the makers never made any money from the clip

Until now, users who regularly produced videos could earn revenue from YouTube if they formally applied to be members of the partnership program, which YouTube said has earned some video producers "thousands of dollars."

Under the new system, if a video becomes popular YouTube will email the maker an "enable revenue sharing" message. Executives declined to quantify how popular a video would need to be for its owner receive the email. YouTube said it will sell ads against the clip only if the user agrees to do so.

One recent example of a clip that became a global phenomenon was the JK wedding dance video, which showed a Minnesota couple's wedding party performing an entrance dance routine. It was seen more than 10 million times in less than a week and picked up by various TV news outlets. But according to YouTube executives, the makers never made any money from the clip.

The extension of the program, to be available only in the US initially, is the latest step by YouTube to improve its ability to make money from the thousands of videos that are uploaded to the site every day.

"We think there's tens of thousands more partners that we can generate through this content," says Tom Pickett, director online sales at YouTube.

Goldman Sachs estimates that YouTube will post revenue this year of about $300 million, and that the figure will increase by at least 40% in 2010. Analysts at Credit Suisse, however, have estimated that YouTube could lose nearly $500 million in 2009.

As part of its drive to increase revenue, YouTube has sought to increase the number of videos from traditional television and movie companies, encouraging more big-brand marketers to buy more advertising time. Earlier this month it signed a deal with Time Warner Inc for clips of shows from CNN, TNT, Cartoon Network and Warner Bros.