If you spend enough time working in or reporting on the YouTube ecosystem, you’ll begin to notice a certain level of fear creators and media providers reserve for their dealings with Google.
The idea is this: Google controls pretty much everything of importance for creators including YouTube and general web search results. Play with Google’s fire and you’re pretty much asking to get burnt by 100 tons of napalm.
It’s not an ideal system, but at least YouTube is giving their creators a fair shake at making some money. It turns out, however, that fair shake isn’t as fair as people believe it to be.
According to a recent post by entrepreneur and the creator of hit YouTube channels “Wellcast” and “XHIT,” Jason Calacanis, funding provided by Google isn’t all that free of strings.
Calacanis in detail explains the reasoning behind his decision to not accept round-two funding from YouTube’s original channel initiative and his plan to eventually untangle himself from YouTube. His decision for the dramatic shift, despite his channels’ obvious success, comes down to a simple matter of money and trust. Okay, maybe it’s not that simple.
In his post, Calacanis suggests that almost every creator receives a 45 percent to YouTube and 55 percent to themselves split, a figure that was confirmed by VlogBrother Hank Green in a recent video.
The problem, as Calacanis explains, is that YouTube taking 45 percent is absurd, especially as creators have no large part in deciding who will run advertising before their videos. In this way, Google can develop advertising partners important to them only while asking creators to be thankful that YouTube handles everything from hosting to advertising.
“I believe this is a strategy to distance publishers from marketers, putting the publishers under complete control of YouTube.”
To this point, Calacanis further explains that multi-channel networks currently face a massive threat from Google and that “… content owners investing solely in YouTube are investing in their own demise.”
Networks on their own already do not have sterling track records when it comes down to treating their partners with total grace. With YouTube taking 45 percent off the top and networks taking an additional percentage from creators, when you really think about it, it must be damn near impossible to cut a profit as a partner.
This is a fact that YouTube has been more than happy to exploit. Calacanis uses Maker Studios as an example, explaining that YouTube is inviting Maker’s talent to events like “Comedy Week,” which in no way benefited studios and only further proved that when YouTube calls, creators will always answer.
Put simply, as Calacanis explains: “YouTube is absolutely going to disintermediate the MCN (multichannel networks) in the next year or two. You can see it starting already. I mean, why would YouTube let other publishers control the top talent ultimately?
It’s an extremely interesting post that in so many ways asks creators and networks to reexamine their relationships with YouTube. Unfortunately, Calacanis hasn’t updated the post with his final two crowd-submitted questions: “How you can outgame YouTube and suck massive value from the ecosystem” and “Exactly how Twitter, Hulu, MSN, Yahoo and Facebook — or a next-gen YouTube — could take on YouTube.”
You can check out the post here, and we’ll keep you updated as Calacanis’ crowd-sourced experiment develops.
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