Three reasons YouTube's pay scheme will change the media marketplace
YouTube revealed yesterday that the site would begin sharing ad revenue with its top producers. While paying users isn't a new development -- other video-sharing sites do it, as do several news-ranking sites -- YouTube's adoption of the model will have a significant effect on the media market. Here's why.
- Creates an incentive for users to produce quality content. Instead of paying everybody pennies (which I argued would happen, oops), YouTube will pay the top producers and incent others to compete for the top slots. (Something I urged Netscape to do last year.) So now, instead of being inundated with even more crap, YouTube will become an even more efficient hit-making machine.
- Legitimizes the clip as a media form. The reason most people think popular YouTube vids are all sleepy kittens is because their is no barrier to entry. There is no exclusivity. Everyone can make a vid, and that's why Revver's and Metacafe's revenue sharing offers -- which encompassed all clips on their sites -- didn't drastically change the marketplace. But people need social gatekeepers. They love Hollywood because it's exclusive. Now, they can love the top YouTubers because they, too, are exclusive.
- Competes with established media. Founder Chad Hurley argued in Forbes that for big media companies, YouTube lowers the risk of taking on new talent. "It's the ultimate audition venue," he wrote. That's true. But now YouTube is also a competitor. Some amateur video artists already reticent to hop over to old media. Now they'll be even more so.
