Friday, March 02, 2007

Competition forcing YouTube to pay

The internet's booming social-networking trend has reached a new milestone: websites are beginning to pay for content.

That means all those web-savvy creative types, the people who post skateboarding videos or write a review about the neighbourhood dry cleaner, could be compensated for their contributions.

The move to pay people for content had been developing slowly but reached a critical new phase when, the internet's bellwether video site, confirmed that it has plans to pay for user-generated content.

The decision sets up the potential for a monumental shift in how people use and view networking sites.

Until now, as user-generated content on the web has grown, the only people making any money have been the site operators.

YouTube, for instance, rose to prominence thanks largely to the goofy homemade videos ordinary people created and posted.

But when Google purchased it last year for $US1.65 billion ($A2.1 billion), the people responsible for those videos didn't receive a single cent from the mammoth Google payout.

Paying individual users for content also follows deals that Google, Yahoo Inc. and Apple Inc., among others, have been signing with networks and Hollywood studios for the right to sell and promote original content on the web.

YouTube didn't provide details of why it wanted to start compensating individual creators.

But a number of industry executives suggested that with both the internet audience and ad revenue growing, competition for the best user-generated content also is intensifying.

So those looking for an edge have started offering money.

By the end of this year, "almost every big site that focuses on viral video will have a revenue-sharing component to it," said Keith Richman, chief executive of, a site that pays $US400 ($A508.36) to $US2,000 ($A2, 541.78) to contributors about 100 times a month for the exclusive rights to some videos. is paying between $US3,000 ($A3,812.67) to $US5,000 ($A6,354.45) a day to pools of people who create videos or other original materials, while is sharing revenue from advertisements placed at the end of videos.

If viewers click on the ad, the video's creator gets paid.

YouTube co-founder Chad Hurley disclosed the site's intentions over the weekend at an economic summit in Davos, Switzerland.

"We are getting an audience large enough where we have an opportunity to support creativity, to foster creativity through sharing revenue with our users," Hurley said.


Anonymous Janice said...

You forgot to mention, which pays out per views, not a flat fee, and not based on clicking on a an ad at the end of the video. They pay $5 per 1000 views, and the top 4 creators have already made over $2000 each. That's pretty cool. I can't wait to see what plan youtube has, but it will be interesting, to say the least, how they intend to compensate people, considering most of their content is copyrighted (the other sites you mentioned, as well as metacafe, all screen the videos before accepting them).

2:39 AM  

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