My Thoughts on Technology and Jamaica: How a 30-70 Split for @YouTube Stars to join @Yahoo @Tumblr Partner Program will kill Youtube

Wednesday, October 15, 2014

How a 30-70 Split for @YouTube Stars to join @Yahoo @Tumblr Partner Program will kill Youtube

Yahoo CEO Marissa Mayer is finally awakening from her slumber. Best of all, if this news is real her plan is genius and she’s found her Guns that she left behind when she left Google and became CEO of Yahoo these past two years!

People queue the song Bang Bang by Jessie J, Ariana Grande, Nicki Minaj as Yahoo CEO Marissa Mayer FINALLY draws for her guns!

This as it now appears that Yahoo does indeed have plans for Tumblr, the everlasting blogging platform that center around the delivery of subscription Video Content powered by poached YouTube Stars as noted in the article “Marissa Mayer's Secret Plan For Tumblr Revealed: Make It YouTube”, published OCT. 9, 2014, 1:55 PM by NICHOLAS CARLSON, Business Insider.

Yahoo had purchased Tumblr, a little known yet steadily growing multi-Social Media Blogging Platform, back in May 2013 for some US$1.1 billion dollars as noted in the article “Yahoo confirms $1.1B Tumblr buy”, promises 'not to screw it up'”, published May 20, 2013 5:14 AM PDT by Don Reisinger, CNET News.

Headed by little known Tumblr CEO David Karp who founded the company in 2007, Tumblr, which I recently joined which searching for some pictures for an article, has some 300 million unique monthly users.

Under the deal which was finalized in June 2014, Tumblr will remain a separate entity instead of being scuppered and their technology being integrated into Yahoo as noted in the article “Yahoo completes blockbuster $1.1 billion Tumblr acquisition”, published June 20, 2013 9:44 AM PDT by Don Reisinger, CNET News. Sorta like YouTube…….

So why are they going after YouTube stars? And how exactly will Tumblr make money?

Marissa Mayer's Tumblr - YouTube Stars Money Carrot to lure Grassroots fans and attract Value Brands

So now almost a year later, this about-turn in strategy will result in Yahoo poaching YouTube Talent from YouTube isn’t much of a surprise. Whoever originally came up with this idea  (it’s me actually!) is a genius.

Currently YouTube Stars are more popular with Teenagers (ages 13 and 17) and Millennials (ages 18 to 28) than Hollywood stars for the reasons relating to the iCarly Effect as explained in my blog article entitled “Variety Survey says YouTubers more popular than Hollywood Celebrities – Popularity driven by Teenage Fandoms and iCarly Effect”.

However, they are underpaid, as YouTube Videos don't pay much, based on the research of YouTube Analytics Company Social Blade. Here's a listing of the most popular YouTubers and their estimated Subscriber and Average viewership. 

They’re paid on a CPM (Cost Per Impression) basis similar to Blogger or any other Social Media Platform that has Advertising on it, be it banner Ads, interstitial Ads or even Ads placed before or after the Video.

CPM is paid out for every 1000th time your YouTube Video is viewed each day, which makes the logical assumption that your ad package from Google Adsense, which also manages YouTube Video Ads, is also being viewed 1000 times each day.  This isn't necessarily true. Plus as a YouTuber, you earn more if viewers not only click on Ads but also purchase products from these advertisers, effectively like an affiliate program.

Each 1000 views per day results in a CPM payout of between US$0.60 to US$5.00, depending on whether the Ads are banner Ads, pre-roll, interstitial Ads or even Ads embedded within the dialogue of the Video. 

Brand value also influences the payout of the Ad on your YouTube Video and depends on the advertising account that Google Adsense handles. Pre-roll, Ads, Videos placed before and sometimes at the end of the Video, make more money.

If the YouTube Star decided to include all of the advertising packages, they can make as much as $20 to $25 for every 1000 views per day. Take note of those CPM figures, as to a Jamaican that’s a lot of money!

In the YouTube world as in the Telecoms World, dedicated customers i.e. business Customer are more valuable than casual viewers, as they subscribed to receive updates when you put up Content. To this end, if you reach 1,000,000 viewers, Google will start to cash in at this point by inviting you (actually making you) a part of their Partner program.

Under this scheme, you get paid the usual $20 to $25 per 1000 views per day, but this time Google takes 45% of your earnings and you keep the other 55% as noted in the article “The 25 Highest Earning YouTube Stars”, published March 9, 2014 By Brian Warner, Celebrity Net Worth.

Despite this, the popular YouTubers with huge subscriptions in the millions of followers are racking up some serious cash. The figures presented in the article “We Ranked YouTube's Biggest Stars By How Much Money They Make”, published MAR. 10, 2014, 9:22 PM by HARRISON JACOBS, Business Insider will make you think twice about getting a college education.

YouTubers as a business - More popular than Movie Stars but More money needed to be sustainable

Thus if you really wanna make money via YouTube Videos as a YouTube Partner, your Content has got to be some really compelling Content to make thousands views per day or higher, like a thousand view per hour, to really start making more money.

Also it works better in your favour if your Videos are not only original Content (like duh!) but also posted on a regular basis e.g. every weekend for example, when most subscribers to your channel have the leisure time to sit and watch your Videos.

Now realistically, US$0.60 to US$5.00 on the low end up to US$5.00 to US$7.00 on the high end per thousand impressions isn't sufficient cheddar to run a business. That's basically US$100 for 100,000 views in a day, assuming you can make a Video that can even garner that many views in ONE day.

Those kinds of low earnings yet high traffic demanded to make money means that many YouTuber channels may oscillate from the funny to the outrageous, making for great entertainment from these very hard-working Social Media entrepreneurs.

With streaming for Mobile Computing Devices such as Tablets and smartphones thanks to the launch of 4G LTE Network and supporting of Fiber Optic Networks powered by Google Fiber, AT&T U-Verse and Verizon FiOS across the US of A as noted in my blog article entitled “YouTube and the Lyrics Videos Trend - How Lyrics Videos ride the Streaming Trend as Musicians Cash in on Sing-Along Craze”, the infrastructure is now in place for many creative minds to make money from Video Streaming powered by Social Media in general.

So for that reason, YouTubers don't make the majority of their money from YouTube, but from direct endorsements from brands that want to be advertised on their channel, often with the intent to cut out Google as the middle man and contact the YouTube star directly. Specifically these other sources of revenue are not much different from bloggers:

1.         Merchandise
2.         Licensing
3.         Affiliate programs
4.         Sponsorships

This is where the bulk of the revenue of the YouTubers come from, and it's very lucrative as listed below, ranked from highest to lowers in terms of Salary per annum:

1.      Pewdiepie – $7 million (5.4b views)
2.      BlueXephos – $6.7 million (2.4b views)
3.      Smosh – $5.7 million (3.4b views)
4.      DisneyCollectorBR – $5 million (2.6b views)
5.      BluCollection – $4.8 million (1.78b views)
6.      JennaMarbles – $4.3 million (1.5b views)
7.      TobyGames – $4.2 million (1.7b views)
8.      RayWilliamJohnson – $4 million (2.7b views)
9.      UberHaxorNova – $3.5 million (1.3b views)
10.  RealAnnoyingOrange – $3.4 million (2.1b views)
11.  CollegeHumor – $3.3 million (2.7b views)
12.  CaptainSparklez – $3.2 million (1.5b views)
13.  ERB – $2.4 million (1.1b views)
14.  Nigahiga – $2.3 million (1.8b views)
15.  BoyceAvenue – $2.3 million (1.4b views)
16.  SkyDoesMinecraft – $2.3 million (2.1b views)
17.  AdamThomasMoran – $2.2 million (703m views)
18.  TheFineBros – $2.2 million (1.9b views)
19.  Tobuscus – $2 million (1.02b views)
20.  TheWillyRex – $2 million (838m views)
21.  HolaSoyGerman – $2 million (1.3b views)
22.  TheBajanCanadian – $2 million (817m views)
23.  SpeedyW03 – $2 million (943m views)
24.  FreddieW – $1.8 million (1 billion views)
25.  Sxephil – $1.7 million (1.27b views)
26.  TheLonelyIsland – $1.7 million (1.4 billion views)
27.  WhiteBoy7thst – $1.7 million (609m views)
28.  Vegetta777 – $1.6 million (1.1b views)
29.  Potemi926 – $1.6 million (655m views)
30.  TheDiamondMinecart – $1.4 million (1.01b views)
31.  MichellePhan – $1.3 million (985m views)
32.  FPSRussia – $1.3 million (600m views)
33.  EpicMealTime – $1.3 million (721m views)
34.  PrankvsPrank – $1.3 million (788m views)
35.  EvanTubeHD – $1.3 million (766 million views)
36.  Vsauce – $1.2 million (656 million views)
37.  ElRubiusOMG – $1.1 million (917m views)
38.  TheRadBrad – $1 million (1.03b views)
39.  Shane Dawson – $1 million (1.1 billion views)
40.  SHAYTARDS – $1 million (1.01 billion views)
41.  TimothyDeLaGhetto – $1 million (578 million total Video views)

So folks, like I said, if you’re a Jamaican reading this, now would be a good time for you to look into making money as a YouTube personality online as explained in my blog article entitledJANN to host Intellectual Property Workshop at UTECH – How Independent Animators can Make money from Animation and thwart Copyright Infringement”.

That is, once you have a Proxy or VPN account to upload your Videos in order to take advantage of the Advertising earning potential as explained in my blog article entitled “Surfing the Internet Anonymously using VPN - How to use Streaming Set Top Boxes over VPN”.

Currently YouTube is mainly use for Branding and SMM (Social Media Marketing) as per the example of our local Telecom Providers Digicel and LIME who are currently engaged in a YouTube Video War as per the exampled in my blog article entitled “Digicel's Operation Bigger Better Value YouTube Ads - LIME Value Comparison with Ity and Fancy Cat as Yendi Phillipps does Somersaults”.

Yahoo Tumblr Partner Program - 30-70 Split to attract YouTube Stars as their Kingdom Crumbles

 Yahoo CEO Marissa Mayer realizes all of this as I’ve mentioned above. She also known that albeit YouTubers make the bulk of their revenue from other sources, typical of most Media Personalities, they still want a bigger cut of the online revenue.

Many are actually opting to host Videos on their own websites and collect adverting revenues themselves directly, cutting out Google as the middleman after YouTube made them famous in the first place as noted in the article “Video Producers Explore Options as YouTube Revenues Disappoint”, published Mar. 17, 2014 7:24 AM PDT by Tom Dotan, The Information.

For that reason, Yahoo is planning to lure brands to Tumblr to make advertising revenue from these premium brands setting up Tumblr channels that integrate not only Videos hosted on Yahoo Cloud Servers but also Social Media so as to have direct feedback from their customers – just like YouTube.

But the special secret sauce is apparently poaching YouTube stars, many of whom are disgruntled with YouTube Partner program. Many YouTube stars are claiming that they're not getting enough money from their Video Content, a problem that really due to Advertisers not wanting to pay Google for YouTube Ads at the same rates as they do for Television or Cable Ads as  explained in “YouTube’s Show-Me-the-Money Problem”, published MARCH 4, 2013 AT 3:00 AM PT by Peter Kafka, All Things Digital

Most likely Yahoo CEO Marissa Mayer is working up deal with advertisers that'll result in higher payouts to attract the Teenagers (ages 13 to 17) to Tumblr on the promise that the YouTube Stars will be paid more Ad revenue.

Possibly more like a Yahoo-YouTuber split of 30-70 in a so-called Yahoo Tumblr Partner Program as suggested strongly in the article “Ready for Marissa’s Closeup? Yahoo Is Considering Creating Its Own YouTube (And Poaching YouTube Stars)” published March 28, 2014, 3:03 PM PDT by Peter Kafka and Kara Swisher, Re/code.

They'll also have to treat them more like movie stars as well, as they'll drive more traffic to Tumblr. In that way, Yahoo CEO Marissa Mayer can demand greater Ad revenue for advertising on Video. But she'd better hurry, as other Social Media Platforms have similar plans to integrate Video Advertising into their Social Media pages directly possibly even pay admins of Profile pages and Groups more money for Advertisements on Video.

Already  Amazon is allegedly looking into starting their own Streaming service to complement their Amazon Fire TV Service as noted in the article “Amazon Considers Streaming Media Service”, published March 27, 2014 11:08 p.m. ET By GREG BENSINGER CONNECT, Wall Street Journal.

Yahoo CEO Marissa Mayer Yahoo Tumblr Partner Program will work, IF she gets the ball rolling and executes her plan to negotiate with the YouTube stars before the end of 2014. A Video Streaming War is coming and it is a Battle to attract YouTube Stars and the Advertising dollars as YouTube’s Kingdom crumbles and becomes divided.

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