AdAge reports that YouTube is cutting the percentage of revenue it shares with TV networks for the content they distribute on its platform. The networks will now receive the same share of ad revenues as amateur, web video creators. This means TV networks will get 55% of the ad revenues, as opposed to the 70% they had previously enjoyed.
TV networks were able to get preferential treatment from YouTube in its early days as the platform was desperate for quality content, and clips from popular TV shows were huge drivers of views, not to mention ad revenue. However, this new model from YouTube democratizes the returns for content creators, and sends a message saying web-only video producers can make content that attracts just as many views as TV networks.
But don’t expect TV execs to be too upset. AdAge says YouTube is also planning to offer a cap on how much ad revenue it keeps, leaving the rest for the ad sellers. This means that ad sellers (especially experiences sales teams from TV networks) could negotiate higher ad rates to keep a larger chunk of the total ad revenue, once YouTube gets its minimum cut.
The new revenue-sharing models are expected to go into effect for all content providers by the start of next year.