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Why YouTube pivoted back to upfront creator payments
From Bloomberg:
YouTube is offering millions of dollars to popular channels if they upload their videos to the site exclusively for a certain period of time, in an effort to halt Netflix Inc.’s pursuit of its biggest stars, according to people familiar with the conversations.
The payment would come in a couple of different forms. YouTube has discussed directly financing some programs, and it has also offered to allot a portion of major brand deals to creators. Though YouTube hasn’t finalized deals with any creators, it is close an agreement with several partners, said the people, who declined to be identified because the negotiations are sensitive and ongoing.
This is a pretty big deal considering that YouTube largely abandoned upfront creator payments years ago.
There were two major periods when YouTube offered creators guaranteed payments. The first came during the YouTube Originals era, when the company was funding its own programming as part of an effort to compete more directly with Netflix. YouTube largely wound down that initiative by the early 2020s.
The second came when YouTube paid large, multimillion-dollar guarantees to lure prominent live gaming streamers away from Twitch. That strategy also mostly faded around the same time YouTube pulled back from Originals.
My takeaway from these moves was that YouTube eventually figured out that its more straightforward revenue share program provided the right mix of incentives to keep creators happy. I think its executives also calculated that any major creator defection would just lead to a bunch of smaller YouTubers rushing in to take their place.
Clearly, though, YouTube has been spooked by the recent deals being struck by companies like Netflix, Disney, and Paramount. My guess is that YouTube worries the major streamers will start treating it as a farm system — letting the platform launch the careers of up-and-coming creators, then swooping in once those creators reach their maximum monetization potential.
If YouTube were only going head to head with Netflix, it probably wouldn’t be too worried. But now that every major media conglomerate is opening its checkbook, there are billions of dollars in content budgets competing for talent. And while YouTube benefits enormously from its millions of niche channels, it still needs its biggest stars to attract blue-chip brands that spend heavily on TV advertising.
ICYMI: How a professional sailing league built massive reach on YouTube and social media
SailGP is only a little over five years old, and yet the competitive sailing league has already built out a substantial fan base all across the world. Not only are its competitions broadcast on linear TV channels, it also produces an impressive amount of content that includes YouTube videos, social media clips, and podcasts. In 2022, it hired Melissa Lawton, a longtime sports broadcast producer, to run its content operations, and she’s invested heavily in everything from live streaming to highly-produced docuseries.
In a recent interview, Melissa explained how SailGP’s media operations fit within its larger business and walked through her team’s approach to producing both shortform and longform content.
Should the book industry ban AI writing?
Over the past year, book publishers have repeatedly found themselves caught in controversies over authors’ use of AI. Social media sleuths run books through AI-detection tools, accusations start flying, and in some cases publishers cancel a book’s publication altogether. But how much should readers actually care if an author uses AI for research, editing, or polishing prose? And are publishers genuinely concerned about the technology, or are they simply trying to avoid the backlash that comes with it?
To talk through those questions, I spoke with media veteran Jason Krebs, whose career has spanned some of the industry’s biggest companies and smallest startups. He’s worked across media, advertising, and content at companies including Google, Disney, The New York Times, and Condé Nast.
We also spent a large portion of the conversation digging into YouTube’s evolving strategy. The platform is making it harder for smaller creators to qualify for ad revenue, setting an especially high bar for Shorts monetization, and increasingly positioning itself as a competitor to traditional television and streaming services. Jason and I debated what these moves say about YouTube’s advertising ambitions, why Shorts may function more as a hedge against TikTok than a standalone creator business, and what happens as YouTube and Netflix increasingly encroach on each other’s turf.
Check out the discussion on YouTube. Or you can subscribe to The Business of Content wherever you get your podcasts. [Apple] [Spotify]