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(EMAILWIRE.COM, March 13, 2013 ) New York, NY -- While the big picture for YouTube looks promising still, there continues to be a single looming problem regarding the world's largest video streamer: More and more individuals who have gained notoriety and popularity through, partially due to YouTube, want their cut of the profits.
With things being fuzzier than ever, YouTube's biggest programming partners are becoming just as fuzzy on how the future plays out for the partnerships. The views are increase, but ad revenue on YouTube is generating simply is not keeping up pace.
In the short term, that fact seems to be causing many of the big YouTube networks to look for new sources of revenue. And the larger question still looms regarding whether or not YouTube will be capable of generating enough ad money for the content makers to support a “premium” programming option it has been attempting to create.
It’s hard, given YouTube’s low [revenue-sharing] numbers and lack of marketing infrastructure to make the unit economics for premium programming work,” says Steve Raymond, who runs Big Frame, a YouTube network/programmer that says it has generated 3.2 billion views.
The revenue programmers earn from YouTube's ad-selling efforts have a wide range to them. Many big publishers say that after YouTube takes its 45% of the cut, they frequently end up keeping $2.50 for every 1,000 views their respective clip generates, which comes out to $2,500 for a million views. Other publishers state the split should be as high as $10 per thousand, at least.
While the rates were reported to be improving this year, according to those both in and outside of the company, last year the site ended up with exceeding inventory, which put pressure on the ad rates.
Last year the video game-focused network Machinima generated billions of YouTube views per month, and worked its contract for many of the video contributors that it currently represents while letting others fall to the wayside. The problem was that the company had guaranteed video makers a pay-per-view rate that caused the company to have to spend more than it could earn through YouTube.
Now Machinima, like other large YouTube programmers, is looking to find a way to turn their views into higher payouts through subscriptions. Marker Studios, which is another large “multi channel network” is looking to find alternate streams such as iTunes soundtrack sales to come up with the money that could have been made in YouTube.
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Source: EmailWire.com
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