Posted August 26, 2009 1:57 pm by with 3 comments

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youtube profits title=This week, Google announced that YouTube is extending its Partnership Program. Formerly only for professional and very popular accounts (think thousands of views per video), the Partnership Program shared ad revenue between YouTube and original content creators.

Now anyone can participate in the ad-sharing program . . . almost. Actually, you still have to get thousands of video views to participate. The real change here is that instead those thousands of views can come to just one of your videos, instead of each of them. Before, several of your videos had to be popular to get into the Partnership Program. Now, just one of your videos has to go viral, and Google can invite you into the program—for that video:

Individual video partnerships will not be eligible for many of the benefits of user partnerships, like enhanced channel features or the ability to monetize other videos in your account, so we encourage you to apply to be a member of the YPP. We’ll consider your individual video partnerships when reviewing your YPP application. For now individual video partnerships are available only in the United States, but we hope to roll these out internationally soon.

In addition to making viral hits’ producers more money, analysts believe this move will also let YouTube and Google increase their revenue: they can run more targeted, higher-paying ads against these videos. So is this just the latest in Google’s hunt for profitability from the $1.65B acquisition? If so, at least one analyst disagrees with the move, according to MediaPost:

Trip Chowdhry, a senior analyst at Global Equities Research, says Google should have generated a profit from YouTube within three years based on the purchase price. “YouTube should be generating $1 billion in revenue and be profitable for the acquisition to be considered smart and good,” he says. “I don’t think they generated even $20 million in revenue per year so far. It’s a very dumb acquisition. You don’t pay $1.65 billion for a lab experiment.” . . .

Chowdhry says expanding YPP to include videos from individuals demonstrates another failed example, because he doesn’t believe it will add enough revenue to make a difference. He says growing site traffic doesn’t mean anything if it can’t earn revenue and generate profit.


This does add some opportunities for successful viral videos’ producers—which is more than Google has to do—but not a lot of hope. My biggest question for the video producers, however, is whether the deal is retroactive: do you only get your share of the revenue after you’ve signed up (which will often be after the peak of the hype), or will you get a share of the revenue your video generated all along?

What do you think? Will it really pay out for video producers, or mostly for Google? Should YouTube be making $1B/year by now?