No one scoffs at Google anymore for spending $1.65 billion to acquire YouTube back in 2006. Last year, the user-generated web site brought in an estimated $5.6 billion in ad revenue, up 51 percent from 2012 and now accounts for 11 percent of Google’s total ad revenue, according to eMarketer. But if the scoffing has stopped, the grumbling from YouTube’s creative ranks has grown steadily louder.
YouTube content creators, including many of the big multichannel network operators like Maker Studios and Machinima, have been complaining for a while now about the site’s revenue-sharing policies. YouTube doesn’t disclose its splits. But channel owners say the site takes 45 percent of all add dollars, making it difficult for any of them to make money from YouTube alone, and leading some to look for revenue elsewhere.
Those efforts became a source of embarrassment earlier this month when word leaked that Machinima was offering its channel partners extra payments for saying nice things about the Xbox One console and games under a deal with Microsoft without disclosing the relationship — a possible violation of FTC ad rules (Microsoft said it had no knowledge of Machinima’s arrangements with its channel partners).
This week, YouTube content VP Tom Pickett found himself getting heckled during a panel discussion at Midem by musicians upset over the pittance they say they earn from their music being streamed on YouTube. According to research by VideoInk, music videos account for 38.4 percent of all views on YouTube, making it the largest music streaming site in the world.
There are signs, though, that Google may be getting the message that YouTube has a credibility problem. Yesterday, Google announced a new crackdown on bogus channel view counts ginned up by paid third-party services to try to boost ad revenues.
“As part of our long-standing effort to keep YouTube authentic and full of meaningful interactions, we’ve begun periodically auditing the views a video has received,” Google software engineer Philipp Pfeiffenberger said in a blog post. “While in the past we would scan views for spam immediately after they occurred, starting today we will periodically validate the video’s view count, removing fraudulent views as new evidence comes to light.”
Today came reports (
not yet confirmed) that the long-time Google Ads exec, Susan Wojcicki is being moved over to head up YouTube, presumably to try to help YouTube creators make more money from advertising, and to make sure efforts to game the system, such as by artificially inflating view counts or through undisclosed marketing relationships, don’t erode advertisers’ confidence in the platform or the metrics they get from Google. That would be a much bigger problem than mere grumbling by creatives.
Update: Google CEO Larry Page has now confirmed Wojcicki’s move to YouTube, in a statement emailed to Re/Code:
Salar [Kamangar] and the whole YouTube team have built something amazing. YouTube is a billion person global community curating videos for every possibility. Anyone uploading their creative content can reach the whole world and even make money. Like Salar, Susan has a healthy disregard for the impossible and is excited about improving YouTube in ways that people will love.