Mak­ing a liv­ing online: More than col­lect­ing a share of YouTube ad rev­enue


When 29-year-old YouTube star Meghan Ton­jes launched a pod­cast with crowd-fund­ing site Pa­treon a year ago, it was one of dozens of things the singer-song­writer was do­ing to grind out a liv­ing online. To­day, it's pay­ing her rent.

Along with post­ing per­for­mance videos on YouTube, tour­ing, selling songs on iTunes and “vlog­ging” (video blog­ging), Ton­jes sits down twice a week with her room­mate in Los An­ge­les to talk about “Ad­ven­tures in Room­mat­ing.” Nearly 100 online pa­trons do­nate a to­tal of close to $700 per pod­cast, just to lis­ten and maybe get a shout-out.

Ton­jes grew her au­di­ence on YouTube, where she has amassed more than 210,000 fol­low­ers since 2006.

But col­lect­ing a check from her cut of YouTube ad rev­enue is no longer her main source of in­come.

“If YouTube dis­ap­peared to­mor­row, I want to know that I can go play shows, do pod­casts and live with­out be­ing de­pen­dent on one site or one app,” she says.

With YouTube tak­ing about a 45 per cent cut of ad rev­enue from videos posted on the site, YouTu­bers and com­pa­nies that man­age them are hunt­ing for new ways to make money from the au­di­ences they've built on the plat­form. That will be a big topic of con­ver­sa­tion at Vid­Con, the an­nual con­ven­tion in Ana­heim, Cal­i­for­nia, that kicked off Thurs­day.

Robert Kyncl, head of con­tent and busi­ness oper­a­tions at YouTube, wel­comes the chal­lenges to its online dom­i­nance, even if other plat­forms are en­tic­ing cre­ators with bet­ter cuts of rev­enue.

Richer cre­ators will “have more and bet­ter con­tent to pub­lish on YouTube,” he says. “We don't live in a world that is mu­tu­ally ex­clu­sive.”

A panoply of ways to earn money out­side of YouTube have re­cently emerged.



Face­book an­nounced this month that in the fall it would start shar­ing ad rev­enue with a se­lect few cre­ators like the NBA, Fox Sports and Funny or Die. Video-game stream­ing ser­vice Twitch al­ready shares sub­scrip­tion rev­enue from fol­low­ers with top gamers, and a site called YouNow al­lows online fans to give tips to tal­ent with coins bought with real money in live stream fo­rums.

Ves­sel, a video ser­vice launched in Jan­uary by for­mer Hulu CEO Jason Ki­lar, of­fers cre­ators 15 per­cent­age points more ad rev­enue share than YouTube, as well as 60 per cent of the $3 per month fee from sub­scribers who want days-early ac­cess to videos be­fore they show up else­where.

Ki­lar says pay­ing cre­ators more helps them make high­erqual­ity videos, the same way sub­scrip­tion rev­enues help pre­mium pay chan­nels like HBO fi­nance bet­ter TV shows.



Ev­ery­thing from “un­box­ing” videos of new gad­gets and howto videos that show off teeth­whiten­ing prod­ucts are pro­vid­ing YouTu­bers a solid rev­enue stream.

FameBit, a Santa Mon­ica startup, launched a mar­ket­place last year where cre­ators bid on the right to make brand-spon­sored videos, and deals close for, on av­er­age, $500 per video, says Agnes Koz­era, the com­pany's co­founder and chief op­er­at­ing of­fi­cer. Brands usu­ally buy mul­ti­ple videos in dif­fer­ent gen­res, from re­views to funny skits, to see what fits.

Also launch­ing this week is an app called So­cial Blue­book, which bench­marks how much cre­ators should ask for such dig­i­tal pro­mos, in­clud­ing on plat­forms like In­sta­gram and Twit­ter.

“We at least want you to have an ed­u­cated es­ti­mate on what you should be charg­ing,” says Chad Sahley, the com­pany's

founder and CEO.


Two movies star­ring YouTube sen­sa­tions are de­but­ing around Vid­Con, in­clud­ing “SMOSH: The Movie,” fea­tur­ing com­edy duo Ian He­cox and An­thony Padilla, and “The Cho­sen,” a hor­ror flick fea­tur­ing vlog­ger Kian Law­ley. With lim­ited the­atri­cal runs, both films are be­ing made avail- able online for $10 on Fri­day.

They won't be the first fea­ture films star­ring YouTu­bers and they won't be the last, says Barry Blum­berg, chief con­tent of­fi­cer for SMOSH backer Defy Media. Last year saw the suc­cess of sim­i­lar films such as “Camp Takota,” star­ring Grace Helbig, and “Ex­pelled,” star­ring Cameron Dal­las.

FameBit is also ven­tur­ing into paid con­tent, launch­ing a talk show se­ries called “Fil­terFreeTV” that will sell on iTunes for $1.99 per episode.

YouTube per­son­al­ity Kayla Lashae, 22, who has made a liv­ing for three years with videos about try­ing out bags and test­ing things like elec­tric tooth­brushes, says it's a good idea to branch out with the co-host­ing gig.


Big mul­ti­chan­nel net­works, which help YouTube stars get advertising deals, are ty­ing up and ex­pand­ing their busi­ness abroad.

Last year Dis­ney bought Maker Stu­dios, and AT&T and Ch­ernin Group pur­chased Fullscreen. And ear­lier this month, Ger­man broad­caster ProSiebenSat.1 merged its Stu­dio71 with Col­lec­tive Dig­i­tal Stu­dio, a Los An­ge­les­based net­work be­hind such brands as Epic Meal Time, Video Game High School and Just Kid­ding News.

Part of the ra­tio­nale is to take for­mats that have worked in Ger­many, like the head-to-head video game chal­lenge show, “Last Man Stand­ing,” and trans­port them to dif­fer­ent mar­kets with lo­cal tal­ent, says CDS CEO Reza Izad. The merger will also help build up advertising sales forces in coun­tries where con­sumers are watch­ing videos that don't have ads sold against them.

“You want to grow (ad rates)? You're go­ing to need to have ad sales forces glob­ally in mar­ket­places that have real value,” Izad says. That means coun­tries like Canada, and var­i­ous ter­ri­to­ries in Europe and else­where where English lan­guage videos travel well.


Reza Izad, left, CEO of Col­lec­tive Dig­i­tal Stu­dio, and chair­man Michael Green pause for photos in Bev­erly Hills, Calif. ear­lier this month.YouTu­bers and com­pa­nies that man­age them are on the hunt for new ways to make money from the au­di­ences they’ve built on the plat­form, which takes about a 45 per­cent cut of ad rev­enue.

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