YouTube has launched Partners Program, a revshare program for its top content creators, that it calls a positive step forward for a service that only made $15 million in revenue last year, despite a purchase price of $1.5 billion.
YouTube plans to open the program to more content creators over time. The start of the program has been expected since a YouTube founder, Chad Hurley, said at the World Economic Forum in January that the company eventually would share revenue with some of its most popular, amateur content producers.
What notably is missing from the announcement is the inclusion of pre-rolls, or similar in-video advertising inclusions, for the new YouTube partners. There have been rumors about the introduction of in-video advertising: In January, Steve Poland noted the BBC report that stated advertising on YouTube may take the form of three-second pre-rolls, but nearly four months later, nothing yet has manifested.
That’s where it could stay, if it weren’t for the fact that not only is YouTube not showing a great financial return on investment for Google, but the new Partners Program only goes as far as monetizing the actual YouTube page destination with AdSense units. While not without merit, the new program is limited, given the way YouTube content is consumed. The great strength of YouTube, according to most users, has been the use of embedded video on external sites: A large number, if not the majority of viewers, never will see the advertising, viewing it only on blogs and forums, which—if they are running Google AdSense units—does not benefit the content creator.
Red Herring reported in April that YouTube was looking to introduce pre-rolls over summer, but limited only to premium publisher content. The premium content is a strong driver of traffic to YouTube; YouTube’s sole focus on it for the introduction of in-video advertising would ignore the long tail of user-generated and -submitted content that was the driving force for the site in the days prior to Google’s purchase of it and its formal content distribution agreements.
Many users may wonder why the site does not roll out the option of in-video/pre-roll advertising to all YouTube content creators. While not everyone may welcome advertising, Google knows the advertising market, and it can credit much of its to-date financial success to its inclusive embrace of content creators. Google AdSense today maintains its clear lead due to the broad expanse of publishers worldwide that not only have embraced the program, but also were able to participate in it; Yahoo’s YPN remains an invite/publishers-only service; and Microsoft AdCenter barely exists but is doing nothing in terms of embracing the long tail.
Technology may be to blame, in that Google still hasn’t sorted out the technology behind the delivery of in-video advertising. Google Video did exist prior to the YouTube acquisition, so the company had since September to start work on the technology. And, given that smaller startups—including sites such as Revver can do it—another video-oriented acquisition remains a possibility.
