YouTube is larger than ever, but it’s not forking over enough ad money to programmers and partners.
AllThingsD posted a thorough look at YouTube—and talked to a few video makers— and decided the site’s generated ad revenue isn’t “keeping pace” with increasing views:
The dollars programmers earn from YouTube’s ad-selling efforts range widely. But many big publishers say that after YouTube takes its 45 percent cut of the ads it sells, they frequently end up keeping about $2.50 for every 1,000 views their clips generate — that is, if their video generates a million views, they get $2,500. Other publishers say their split can be as high as $10 per 1,000.
For context purposes, Psy, the Korean artist behind the viral hit “Gangham Style,” allegedly earned $870,000 from YouTube ad revenue by December 2012 on 889 million views. According to The New York Times:
TubeMogul, a video ad buying platform, estimates that PSY and his agent YG Entertainment have raked in about $870,000 as their share of the revenue from ads that appear with YouTube videos. The Google Inc.-owned video service keeps approximately half.
Psy’s popular hit has since clocked more than 1.3 billion views, but, if TubeMogul’s estimate is correct, he isn’t earning much per view.
YouTube invited programmers last fall to preview YouTube Space, a Los Angeles-based studio, and many of them apparently complained to YouTube executives the entire time about not making enough money. However, according to AllThingsD, video makers with their own sites can generate better payouts than what YouTube provides, and they “frequently cite CPMs, or ad rates, of $20 per thousand views.”
Vice Media CEO Shane Smith specifically told the publication that his company tries to find backers to pay for their videos before uploading to YouTube: “It’s a difficult space to get to scale and to monetize it at the same time,” he said, while clarifying that relying on YouTube ad revenue is “not going to be our monetization strategy.”
YouTube could still improve, though. The video-sharing platform previously made zilch from videos on mobile, even though mobile videos accounted for 25 percent of the site’s views, but it has recently grabbed the reins on its YouTube for iOS app and revamped its Android app. Therefore, its ability to generate more views and ad dollars will likely continue to grow.