YouTube’s moneymakers, here and in the US
YouTube is a giant platform for home-made video talent, but the company has long looked for ways to shape that creativity – even if executives insist it is a distribution network, not a production house.
In 2011, YouTube’s decision to invest in original channels was seen as the first step towards Google TV. The experiment in effect ended a couple of years later and the focus moved to physical production spaces to help the “amateurs” make more sophisticated content. There are now YouTube Spaces in LA, Tokyo, London, Berlin, Paris, Sao Paulo, Mumbai and New York where “creators” can book time and equipment. So far they have generated more than 10,000 videos. Last month saw the release in the US of movie-length YouTube “Originals” available only on its subscription arm, Red.
In the end, the strength of content rests on the creators who have invented genres: the beauty-blogger, the gamer, the DIY tradie. Perpetrators of good and crazy ideas have found a global audience and built businesses on YouTube.
Revenue comes from everywhere – spin-off books, CDs and merchandise; funds raised from followers; sponsorship from brands; and a share of ad revenue. YouTube does not reveal figures but Morgan Stanley estimates it will make about $US6 billion in revenue in the US this calendar year. It signs creators as partners and reportedly gives them a cut of about 55 per cent, depending on their hits.
Mega-audiences don’t necessarily translate to mega-bucks, even if chief executive Susan Wojcicki says that some end up employing not just their families but “their whole town”. YouTube says partner revenue has grown by 50 per cent year on year.
For Bernie Su, who arrived in Los Angeles wanting to be a screenwriter, YouTube proved the answer. His videos are a riff on Jane Austen novels and Su has spun off The Lizzie Bennett diaries (based on Pride and
Prejudice) and Emma Approved ( Emma) into DVDs and e-books selling around the world. "We're very big in Brazil,” he says.
Much of the success of YouTubers rests on watchers feeling they are inside the creator’s life, so keeping it real once you become famous is a challenge. Cassey Ho has parlayed a 2009 video she did for her local pilates class into a business called Blogilates, with about 2.8 million subscribers, 12 staff and a line of merchandise. She says: “It's all about the authenticity. I do everything I can to maintain the trust.”
Cenk Uygur, a TurkishAmerican whose progressive news network The Young Turks has more than 86 million views a month, says when TV stars win awards they thank their agents, but when YouTubers win awards, they thank their audience.
He says: “I worked in TV, and I hate the gatekeepers. The best gatekeepers are the audience. TV is going to die (but) once you start building your own audience, it’s as close to permanent as you get. If you go to a TV channel (as a commentator) you are borrowing your audience.”
From left, Cassey Ho ( Blogilates), Bernie Su (The Lizzie Bennett Diaries), Joey Graceffa (vlogging and gaming), Cenk Uygur (The Young Turks news network) and Shira Lazar (What’s Trending)
at the YouTube Space in LA