YouTube Programmers Complain About Video Advertising Dollars
The big picture for YouTube looks good. The world's biggest video site keeps getting bigger, generating more video views and more ad dollars. — Things are fuzzier for some of YouTube's biggest programming partners.
Context & Ripple Effects
YouTube’s advertising business has been a long-running work in progress, from selling prominent homepage ad placements in 2008 to a 2009 report that it was slowly improving its ad model. By late 2012, it was also preparing a new round of content investments, tying the platform more closely to professional programming partners.
The complaint exposes a divide within that model: YouTube’s rising views and advertising revenue do not by themselves establish that major programmers share proportionately in the gains.
First-order effects
- YouTube’s programming partners face greater pressure to prove that audience growth produces dependable advertising income, complicating their reliance on the platform.
- YouTube must manage partner dissatisfaction while continuing to position its advertising business as a growing source of revenue.
Second-order effects
- Content producers evaluating YouTube’s investment offers gain a clearer reason to weigh upfront funding against the uncertainty of advertising returns.
- YouTube’s push to fund programming becomes harder to separate from the question of how revenue is allocated to the partners supplying that programming.
Third-order effects
- If revenue growth continues to be unevenly felt by creators, online-video distribution may consolidate bargaining power with the platform that controls ad sales and audience access.
The trend: Online video is moving from the challenge of generating advertising revenue to the harder question of how that revenue is shared with professional content suppliers.