Ad Revenue Sharing and You(Tube)
Over on Cartoon Brew Amid has some great incisive comments about the growing buzz over YouTube.com and other potential online revenue sharing models being touted as the great hope for independent content creators. You can get a whiff of some of that buzz here on AWN. As much as I wish it could be true, like Amid I just don’t see how it could be. At least not now.
Much of this ad revenue sharing schpiel is merely a redux if the same old saw that we heard from the dot-com boom 6 years ago. The core value of any content in an ad revenue sharing system is the number of eyeballs that watch a given item of content. The more eyeballs watching the content, the more value it has to an advertiser in drawing a crowd to market to. On the large scale of corporate Hollywood this still makes sense, but even there most folks can see the writing on the wall. With the widening of media choices and the diffusion of viewing tastes and habits in end consumer audiences the ability to draw enough viewers to pay for the content is generally on a downward trend. So what does that mean for indies? Some say it’s a good thing, a sign of the end of the age of the dinosaur. Which may be true, but will the indy rise up in this void?
The primary problem for independent producers of animation with online ad revenue sharing is essentially the same one they have had with the mainstream gatekeeper system: individual pieces of content just don’t draw enough eyeballs to be of much worth to an advertiser. The only difference is in how it plays out. The gatekeeper mainstream system won’t even show indy content that doesn’t have some assurance of drawing tens of millions of eyes. While online systems like YouTube are more polite in that they have no gatekeeper to keep your content off the bandwidth, generally nobody is willing to pay you to put it there, either. The end result is no money (or next to no money) for your content. The only difference is that in the online world at least you got the chance to show your stuff- which I suppose is a bit of a moral victory if nothing else. But it’s hard to pay the mortgage with moral victories. This, in my eyes, is the achilles heel of the ‘long tail’. Great for distributors, sucks for indy content producers. So tell me again how this is different from the current gatekeeper system? Heh.
Some may say “Well, the online video sites should pay more per viewing, then!” That’d be nice in utopia, but it doesn’t play well on Wall Street. YouTube.com could charge 10 times their current ad rates and then generously share that revenue with content creators. The only problem is no advertiser would buy an ad on YouTube if they upped their rates. I could charge $17,000 for a mixed breed puppy when I sell it on the street corner, but would you buy that puppy? So ad revenue sharing for online indy content is a zero-sum game. There’s only so much cash that can be earned from a given site (YouTube). And there are vast numbers of ways to spread that cash around (hundreds of thousands of content creators). In the end it comes out to next to nothing per viewing- just as proven by the numbers and succinctly pointed out by Amid. And YouTube won’t aribitraily raise their rates just to make content creators happy, especially not when they’ve found that they already have had hundreds of thousands of entries that have been put up with absolutely no promise of any kind of financial reward to start with. YouTube does not currently share any ad revenue. Folks think they may do so soon, but so far they haven’t. Yet they’re not starving for contributors of content, are they? So what does that tell YouTube about the value of the content they have on their servers if the creators of that content give it to YouTube for free? And by extension, what signal does that send to the advertisers about the value of that content? To YouTube and advertisers, the end goal is the cumulative effect of a million little matchsticks to boil their kettle. Whether the flames burn blur or orange is of no meaning to them- content in and of itself has no value. Only those who come to look at it have any value. And that is the sum of it all, regardless of distribution model: In the world of business, ultimately content has little or no value- only the crowd that watches content has value. Content is the worm, not the fish.
The next logical step in some minds is to skip the suits and advertisers and distributors altogether and go straight to John Q. Public with the content and let them pay for the content. After all, if they come to watch the content that must mean they value the content. So let’s go right to the end user audience- the people who value the content. Some have argued that. Basically we’d be talking about pay-per-view micro-payments directly from end user audiences. Assuming that an infrastructure exists to reliably collect such fees (it really doesn’t), and assuming that getting the news out to the public about your content is free and easy and effective (and it isn’t) would this be feasible? In other words, if some clever Jack or Jill came up with a system where getting the word out wasn’t a major hurdle and collecting payments wasn’t a hassle, could the indy content creator make a living from direct audience payments? I explore that in my next post.