YouTube videos are pulling in serious money

YouTube videos are pulling in serious money

Making videos for YouTube–for three years a pastime for millions of Web surfers–is now a way to make a living.

One year after YouTube, the online video powerhouse, invited
members to become "partners" and added advertising to their videos, the
most successful users are earning six-figure incomes from the Web site.
For some, like Michael Buckley, the self-taught host of a celebrity
chatter show, filming funny videos is now a full-time job.

Buckley quit his day job in September after his online profits
had greatly surpassed his salary as an administrative assistant for a
music promotion company. His thrice-a-week online show "is silly," he
said, but it has helped him escape his credit-card debt.

Buckley, 33, was the part-time host of a weekly show on a
Connecticut public access channel in the summer of 2006 when his cousin
started posting snippets of the show on YouTube. The comical rants
about celebrities attracted online viewers, and before long Buckley was
tailoring his segments, called "What the Buck?" for the Web. Buckley knew that the show was "only going to go so far on public access."

"But on YouTube," he said, "I’ve had 100 million views. It’s crazy."

All he needed was a $2,000 Canon camera, a $6 piece of fabric
for a backdrop and a pair of work lights from Home Depot. Buckley is an
example of the Internet’s democratizing effect on publishing. Sites
like YouTube allow anyone with a high-speed connection to find a fan
following, simply by posting material and promoting it online.

Granted, building an audience online takes time. "I was spending 40
hours a week on YouTube for over a year before I made a dime," Buckley
said–but, at least in some cases, it is paying off.

Buckley is one of the original members of YouTube’s partner
program, which now includes thousands of participants, from basement
video makers to big media companies. YouTube, a subsidiary of Google,
places advertisements within and around the partner videos
and splits the revenue with the creators. "We wanted to turn these
hobbies into businesses," said Hunter Walk, a director of product
management for the site, who called popular users like Buckley
"unintentional media companies."

YouTube declined to comment on how much money partners earned
on average, partly because advertiser demand varies for different kinds
of videos. But a spokesman, Aaron Zamost, said "hundreds of YouTube
partners are making thousands of dollars a month." At least a few are
making a full-time living: Buckley said he was earning over $100,000
from YouTube advertisements.

The program is a partial solution to a nagging problem for
YouTube. The site records 10 times the video views as any other
video-sharing Web site in the United States, yet it has proven to be
hard for Google to profit from, because a vast majority of the videos
are posted by anonymous users who may or may not own the copyrights
to the content they upload. While YouTube has halted much of the
illegal video sharing on the site, it remains wary of placing
advertisements against content without explicit permission from the
owners. As a result, only about 3 percent of the videos on the site are
supported by advertising.

Expectations for partners
But the company has high hopes for the partner program. Executives liken it to Google AdSense,
the technology that revolutionized advertising and made it possible for
publishers to place text advertisements next to their content.

"Some of these people are making videos in their spare time,"
said Chad Hurley, a co-founder of YouTube. "We felt that if we were
able to provide them a true revenue source, they’d be able to hone
their skills and create better content."

In a time of media industry layoffs, the revenue source–and
the prospect of a one-person media company–may be especially appealing
to users. But video producers like Lisa Donovan, who posts sketch
comedy onto YouTube and attracted attention in the fall for parodies of
Gov. Sarah Palin of Alaska, do not make it sound easy. "For new users,
it’s a lot of work," Donovan said. "Everybody’s fighting to be seen
online; you have to strategize and market yourself."

Buckley, who majored in psychology in college and lives with
his husband and four dogs in Connecticut, films his show from home.
Each episode of "What the Buck?" is viewed an average of 200,000 times,
and the more popular ones have reached up to 3 million people. He said
that writing and recording five minutes’ worth of jokes about Britney
Spears’ comeback tour and Miley Cyrus’ dancing abilities is not as easy
as it looks. "I’ve really worked hard on honing my presentation and
writing skills," he said.

As his traffic and revenue grew, Buckley had "so many
opportunities online that I couldn’t work anymore." He quit his job at
Live Nation, the music promoter, to focus full time on the Web show.

There is a symmetry to Buckley’s story. Some so-called Internet
celebrities view YouTube as a stepping stone to television. But Buckley
started on TV and found fame on YouTube. Three months ago, he signed a
development deal with HBO, an opportunity that many media aspirants
dream about. Still, "I feel YouTube is my home," he said. "I think the
biggest mistake that any of us Internet personalities can make is
establish ourselves on the Internet and then abandon it."

Cory Williams, 27, a YouTube producer in California, agrees.
Williams, known as smpfilms on YouTube, has been dreaming up online
videos since 2005, and he said his big break came in September 2007
with a music video parody called "The Mean Kitty Song." The video,
which introduces Williams’ evil feline companion, has been viewed more
than 15 million times. On a recent day, the video included an
advertisement from Coca-Cola.

think the biggest mistake that any of us Internet personalities can
make is establish ourselves on the Internet and then abandon it."

–Michael Buckley, host, "What the Buck?"

Williams, who counts about 180,000 subscribers to his videos, said
he was earning $17,000 to $20,000 a month via YouTube
. Half of the
profits come from YouTube’s advertisements, and the other half come
from sponsorships and product placements within his videos, a model
that he has borrowed from traditional media.

On YouTube, it is evident that established media entities and
the up-and-coming users are learning from each other. The amateur users
are creating narrative arcs and once-a-week videos, enticing viewers to
visit regularly. Some, like Williams, are also adding product placement
spots to their videos. Meanwhile, brand name companies are embedding
their videos on other sites, taking cues from users about online
promotion. Walk calls it a subtle "cross-pollination" of ideas.

Some of the partners are major media companies; the ones with
the most video views include Universal Music Group, Sony BMG, CBS
(publisher of CNET News) and Warner Bros. But individual users are now
able to compete alongside them. Mr. Buckley, who did not even have
high-speed Internet access two years ago, said his YouTube hobby had
changed his financial life.

"I didn’t start it to make money," he said, "but what a lovely surprise."

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