6. Meet up with fans in the real world: Meetups and similar events let YouTubers connect with viewers and sell merchandise. They’re usually best suited to those with active and engaged subscribers. Those with smaller audiences might want to skip ticketed events and bank on merchandise sales instead. Or if, for example, your videos teach viewers how to draw, you could set up a free class at a local park and sell your book of drawing techniques afterward.
What kind of sales multiple does this fast-growing video juggernaut deserve? It's tough to think of a direct comparison. Netflix, which trades for over eight times its 2018 revenue consensus, relies on subscription revenue rather than ads. And whereas YouTube largely relies on ad revenue-sharing deals with content partners, Netflix directly pays its content partners for their material.
Absent substantive oversight by regulators, in the late 1960s the calls for change entered a new, more creative phase. A group calling itself Action for Children’s Television began advocating for specific changes to programming for young kids. The Corporation for Public Broadcasting was formed in 1968 with government dollars. At the same time, Children’s Television Workshop began producing Sesame Street, and the forerunner to PBS, National Educational Television, began distributing Mister Rogers’ Neighborhood. These shows were tremendously successful in creating genuinely educational television. By the time children’s programming got swept up into the growing cable industry, the big channels had learned a lot from the public model, which they incorporated into shows such as Dora the Explorer and Blue’s Clues.
To be clear, it’s hard to make videos that very young children can learn from. (Johnson’s doctoral adviser, Georgene Troseth, was part of the team that demonstrated this.) Children under 2 struggle to translate the world of the screen to the one they see around them, with all its complexity and three-dimensionality. That’s why things like Baby Einstein have been debunked as educational tools. Most important for kids under 2 is rich interaction with humans and their actual environments. Older toddlers are the ones who can get something truly educational from videos, as opposed to just entertainment and the killing of time.
Like any good mogul, Fischbach is diversifying: In October, he cofounded an athleisure line, Cloak, with fellow list member Seán McLoughlin, better known as “Jacksepticeye” (No. 8, $16 million). The workout line includes $85 sweaters and $35 T-shirts. Even if they intend to exercise nothing more than their thumbs, fans have snapped the gear up: The presale items sold out in 48 hours.
So far, though, this has all proved to be mostly idle speculation. Analysts say Google has not been bidding aggressively to win streaming rights. It's not clear whether YouTube, long the top video site overall in unique visitors, aims to be the No. 1 aggregator of all video, says Joel Espelien, an analyst at the Diffusion Group, a video-focused research firm.
Apply to join the YouTube Partner Program when you feel confident in the interest and following your videos have garnered. There is no set following numbers needed to become a partner, but YouTube must see that your videos have interest and are growing a following before you're accepted. Sometimes YouTube will contact you directly about becoming a partner, especially if your videos have gone viral quickly. If not, you can apply on the YouTube partner page by entering personal information, describing a marketing plan, and defining your video genre.
In 2013, YouTube introduced an option for channels with at least a thousand subscribers to require a paid subscription in order for viewers to watch videos. In April 2017, YouTube set an eligibility requirement of 10,000 lifetime views for a paid subscription. On January 16, 2018, the eligibility requirement for monetization was changed to 4,000 hours of watchtime within the past 12 months and 1,000 subscribers. The move was seen as an attempt to ensure that videos being monetized did not lead to controversy, but was criticized for penalizing smaller YouTube channels.
Next let’s break down the types of advertisements on YouTube. You’re probably familiar with them if you watch any amount of YouTube videos. There’s the bottom text based ad that is displayed at the bottom of your video, and then there is the clip that plays at the beginning of your video. You can select which of these ads your video can have, and it might make a difference depending on your audience or how much revenue your video brings in.
Alternatively, you can also become an affiliate for brands and make residual passive income through commissions from every sale you generate through your channel. This works especially well if you review products as part of your YouTube channel. Since there's no risk involved on the brand's end (they only pay when they make sales), there's usually a low bar to getting started.
YouTube's still-rapid viewing growth -- driven by smartphones and to an extent connected TVs -- has a lot to do with its revenue momentum. At last week's NewFronts online video ad event, YouTube disclosed it now had over 1.8 billion monthly logged-in viewers, up from 1.5 billion as of last June. And back in February 2017, YouTube said it was seeing over a billion hours per day of viewing -- that's about three times what Netflix (NFLX) witnessed on a record-breaking day in January, and 10 times what YouTube saw back in 2012.
Videos with progressive scanning or interlaced scanning can be uploaded, but for the best video quality, YouTube suggests interlaced videos be deinterlaced before uploading. All the video formats on YouTube use progressive scanning. YouTube's statistics shows that interlaced videos are still being uploaded to YouTube, and there is no sign of that actually dwindling. YouTube attributes this to uploading of made-for-TV content.
Estimates for YouTube's annual revenue, nearly all of which still comes from ads, vary a fair amount. But many of the estimates are now above $10 billion. At different points, Bank of America and Mizuho forecast that YouTube would post 2017 revenue of $13 billion and $12 billion, respectively. And in February, Baird's Colin Sebastian estimated YouTube is doing around $15 billion in annual sales.
“Even if advertisers are paying a decent amount to promote their products through video ads, only a portion of their expenditures ever make it into content creators’ pockets,” says entrepreneur Michael Johnston. “For example, if advertisers are paying an average of $20 per 1,000 ad impressions, the videos where those ads are being shown may only generate $2 or $3 per 1,000 views.”
Facebook (FB) , which trades for about nine times its 2018 revenue consensus, is still seeing 40%-plus revenue growth and has some big growth levers left to press, is arguably a better comp for YouTube, given its business model, network effect and market dominance. But Facebook is quite profitable -- in spite of heavy spending on data centers and content security, Facebook's 2018 net income consensus stands at $22.5 billion -- and based on comments made by YouTube CEO Susan Wojcicki and others -- YouTube's profits might still be minimal thanks to large data center and content investments.
How does a video streaming service with one billion active users per month and $4 billion in revenue not turn a profit? Ask YouTube, which couldn't break free from breaking even in 2014, according to a new report. Sources tell the Wall Street Journal that Google's video unit posted $4 billion in revenue last year, up from $3 billion in 2013, and that while the service accounted for 6 percent of Google's overall sales, it contributed nothing to earnings.
Karim said the inspiration for YouTube first came from Janet Jackson's role in the 2004 Super Bowl incident, when her breast was exposed during her performance, and later from the 2004 Indian Ocean tsunami. Karim could not easily find video clips of either event online, which led to the idea of a video sharing site. Hurley and Chen said that the original idea for YouTube was a video version of an online dating service, and had been influenced by the website Hot or Not.