CNBC - YouTube’s Recession-Proof Cottage Industry
12 Dec 08
YouTube’s Recession-Proof Cottage Industry
Times are tough, so if you have some extra time on your hands, you might want to direct your attention—and your secret talents—online. Hundreds of YouTube users make thousands of dollars every single month through the Google-owned site, without ever leaving their homes.
You don’t have to have a studio deal—ordinary Joes allow Google’s YouTube to post ads with their popular home videos and they share in the take.
It’s a win-win. Google creates an incentive for users to draw more viewers to their ad-hosting pages, and expands its advertising footprint. YouTube may stream hundreds of millions of YouTube videos daily, but revenue hasn’t grown to match traffic, as only three percent of YouTube videos host ads.
The partner program makes deals with media companies, including CBS, the Associated Press, and the NBA, setting up channels for the content creators and promoting them on the home page. A year ago YouTube opened up that partner program to thousands of of its most popular users, reaching out to those that regularly attract millions of page views and hundreds of thousands of subscribers. Now some guy making videos in his pajamas can have a channel promoted by YouTube, sharing in the revenue generated by the ads posted with the videos.
And some YouTube partners are seriously cashing in — making six figures through this program. Michael Buckley quit his day job to focus on his online show “What the Buck”, which boasts it’s the most popular entertainment show on YouTube. Not only is Buckley bringing in $100,000 a year with this gig, but it scored him a development deal with HBO. Others build on their advertising take with sponsorship and product placement deals. Cory Williams, all of 27 years old, brings in up to $20,000 a MONTH. If you’re not familiar with his name, you may know him by his tag “SMP Films.” It sounds like an entertainment company, because, well, with that kind of revenue stream, that’s what it is.
My favorite of these YouTube entrepreneurs is a 15-year old named Lucas Cruikshank, famous for his loud, over-the-top impersonation of a six year old, “Fred.” He has 703,682 subscribers, which YouTube tells me is more than any other content partner on YouTube, more even than CBS. I spoke to his publicist — yes, he has a publicist — about his burgeoning empire. Fred also draws tens of thousands of dollars a month in ad revenue from YouTube, and sponsorship, but the publicist says that “Fred” is the first YouTube character to be licensed.
Cruikshank is bringing in big bucks for merchandise sales and licensing of his name and image to Hot Topic. The publicist said that lately he’s been bringing in a hundred thousand dollars in revenue a month, on track to generate a million dollars in revenue next year. Apparently he’s been courted by the TV networks and movie producers. But for now, he’s sticking with YouTube. With that kind of cash coming in, I understand why!
