By James Jarvis
It’s not enough to be good anymore. Obviously that’s a part of it; that’s why Google constantly changes algorithms to ensure popular content rises to the top. But if you set out to earn a living on YouTube, it’s not just going to be about business decisions such as whether to join a network. You’re going to have to make some moral choices along the way.
But to start out, you’ll have to enable your channel for monetisation by opting into the YouTube partner programme. This allows YouTube to place ads on your videos and starts making you money. From here on, the more views you get, the more ads are served and the more cash you get at the end of the month. Income generated in this way is split 55-45 per cent in favour of the creators, so for every $1000 (£600) generated you’ll see $550 (£340).
Generating $1000 (£600) a month isn’t easy. YouTube’s CPM’s (cost per thousand impressions) vary depending on which ads are being served and how much the advertisers are willing to pay for those impressions. There are exceptions but most partners can expect to earn between $0.30-$2.50 (18p – £1.55) CPM. So, if you operate at the top end, you’ll need one million views a month to earn $2,500 (£1,550). Enough for one person to live on, sure, but achieving this alone is difficult.
This is where things start to get complicated.
Once you get to a certain level of popularity (which, based on a recent CVG survey, seems to be around 5,000 subscribers), you’ll start to receive offers from people to join their multi-channel network. Interestingly 5,000 subscribers is also the level that’s required to access the YouTube creator space in London, which offers production spaces, equipment, post-production resources and creator events, so it’s not just a number plucked out of thin air.
The problem is there are so many of these networks, and it’s very difficult to work out if the offer is genuine or if you’re basically signing your channel away to the guy who says he has $3 million waiting for you as long as you send him your credit card details.
YouTube is very aware of these multi-channel networks (MCNs) and although it offers information about what they are and what they could do for your channel, it distances itself from them as far as possible “MCNs are not affiliated with or endorsed by YouTube or Google”, reads Google’s advice. “Whether or not to join an MCN is an important decision. You should do your homework and decide what's best for you.”
Most offer channel management, support, exclusive advertising, promotion and higher CPM’s in return for a share of the revenue. Taking two of the most recent communications I’ve received as an example, the CPM rate and revenue share amounts fluctuate widely from $3-$10 (£1.80 - £6) per 1000 views for a minimum revenue share of 70 per cent at Music Nations Network to an average of $13.71 (£8.50) and a 95 per cent revenue share at Xenova; neither of which I’d heard of, or knowingly watched any content from before writing this. But ultimately it’s up to the creators to pick what they think is best.
Perhaps the biggest and most well-known of these networks is Polaris, which is owned by Maker Studios. Disney recently acquired the network for $500 million. You know, Disney. As in the film studio that brought you Monsters Inc., Aladdin, The Lion King, Finding Nemo, Frozen, etc. If you’re part of this network then YOU, the person in the videos, whether it’s an act put on for the camera or really you, effectively belong to a giant global media company and you aren't just some regular guy or girl in your bedroom making videos anymore. That persona you have in the videos becomes a product in much the same way that Hannah Montana (another Disney creation) was a product portrayed by Miley Cyrus.
This network contains some of the biggest names on YouTube including The Angry Joe show, DKY Gaming, SmoothMcGroove, PewDiePie, Jessy Cox, Yogscast and TotalBiscuit.
These networks can usually offer higher CPM’s because they can sell ads based on the collective weight of the network. Put simply, if you gather the most-viewed channels together in a network you can use your entire network’s monthly view count total rather than an individual’s when looking for deals.
Seems like an easy choice, right? But there are other factors to consider here. Being part of a huge network like this means they could change the way your channel is presented and monetised. This has happened in the past. Case in point: NerdCubed. “You may have noticed that my old videos have had mid-rolls enabled. Which are the adverts in the middle of videos. Uhh, this was done without my consent and I’m exceptionally pissed off. Very, very, very angry at my network. Because it’s a network thing.”
Joining these networks also increases the possibility of being offered sponsored videos, and these have brought up a lot of questions. These deals are usually negotiated by the network, which allows creators to concentrate on making content, not worrying about the paperwork, and are then passed onto the individuals for consideration. In April this year, popular YouTuber TotalBiscuit tweeted a screengrab of an email he regularly receives from PR companies offering him $2,000 (£1,200) to make a video about an upcoming card-game.
This would be sponsored content, effectively an advert (or advertorial at best), and the only disclaimer that would alert people to this is that the video description box must disclose that the video is sponsored. The problem here is that it’s down to you to decide if the offer of $2,000 (£1,200) will alter your decision on whether to cover the game or not. Does it outweigh what's best for your audience? And, perhaps more importantly, will anyone notice? If it looks and sounds just like any other video how will your audience know what is and isn’t sponsored? Take, for example Gamasutra’s investigation into Syndicate’s and SeaNanners Disney Infinity videos by Christian Nutt, who says “I tracked down both Syndicate's and SeaNanners' Disney Infinity videos. By my estimation, it was essentially impossible to tell they were sponsored, either from the content of the videos or from their text descriptions on YouTube – so much so that I had to email back to 3BlackDot's PR and verify that these are sponsored videos (they are.)”
These are questions the YouTube community, and anyone considering taking the leap, should consider.
And some of them are. On July 15th OfficialNerdCubed, who has 1.8 million subscribers, uploaded a video stating that “Back in 2012 I played Need for Speed Most Wanted...Machinima offered me a free copy of the game and a small increase in revenue to play it”. There were no caveats stating he had to be nice about the game but, he says, “I had trouble with the video. I had to make that video three or four times because it was just...I had that money dangling over my head. The way I normally do things collapsed because more money got involved”.
As TotalBiscuit (who openly admits that he’s done paid promotional work before, including videos on Planetside 2, MechWarrior Online and Guns of Icarus Online) states (in his video entitled ‘This Video was brought to you by...’ – above) that: “It’s frankly a very strange space because we don’t operate within the same kind of boundaries that say, a journalist would. Because a lot of us aren't journalists… I don’t have a problem with other channels taking huge amounts of sponsored deals like say the Yogscast does, that's fine. As long as it’s properly disclosed.”
These kind of deals are dangerous and there have been a number of high profile incidents recently that have caused the companies involved major headaches including one between Microsoft and Machinima for coverage of Xbox One games. Back in March, there was a Polaris and Maker Studios backed Game-Jam with Mountain Dew that reportedly ate up $400,000 (£247,000) before being cancelled. But these deals are here to stay and they are probably more common than you think.
YouTube personality Boogie2988 claimed back in January 2014 that controversial endorsement policies are part of daily business within YouTube networks. The good news is, as of yet, no network has forced its members to take part in one of these deals. It’s still down to the individual channel owners to make that decision, for now at least anyway.
Get all of these things right and you can make a substantial living from the content you create, but it isn’t easy. Much like the music business, there are only a handful of success stories from the tens of thousands of people trying to break though. Sometimes it’s just a matter of being in the right place at the right time.
James Jarvis has been working in the games media since 2006. Recently YouTube Certified in Audience Growth, he has produced a number of successful shows including Skyrim: Rags to Riches and is currently co-host and producer on GTA V o'clock.