YouTube is letting video uploaders make more money if they have more than 100,000 followers.
According to a report in Reuters, YouTube is letting uploaders with greater than 100,000 followers launch paid fan clubs as part of an effort to diversify its revenue. According to Reuters, the unit of Google said it was making the move to rely less on advertisers and make money via other avenues.
Advertisers give YouTube billions of dollars in revenue each year but are getting picky in terms of the content they want to be associated with. When YouTube moved to appease advertisers last year, video makers saw a decline in earnings. New tools including memberships and expanded merchandise sales are aimed at giving video producers more control of their content, said Rohit Dhawan, a senior director of product management at YouTube. The executive declined to comment on how much investment YouTube is making in these alternative monetization efforts but said that the company is keeping $1.50 each month for every $5 of membership. He said the goal is to create a suite of software for creators so they can manage relationships with fans and tools that enable them to send personalized videos to members. “The number of engineers we have working on this is not because we think there’s something there,” he told Reuters. “We know there’s something here.”
For the membership clubs, Reuters reported video makers get to choose the name of the club and the perks they will offer to followers. This has to be approved by staff at YouTube. Members are able to report if the video maker fails to deliver the benefits, whether it’s t-shirts or shout-outs.
While YouTube may looking for ways to diversify, its search growth has reaccelerated during the past three years — the company’s parent, Alphabet, is poised to have the best growth rate this year since 2011. According to a recent report in the Financial Times, the higher growth rate comes even though the company’s revenue will be nearly four times more than it was back in 2011. What’s more, the paper reported that $26 billion in new business will likely come Google’s way this year, underscoring the power of its core search business. It also provides Google with capital, which it can use to fuel growth beyond the search market. Those prospects have led some investors to predict the stock can go higher. Take Dan Chung, chief investment officer at fund manager Alger, for example. He told the Financial Times that if Alphabet gains momentum and gets past its investment phase, which hurts margins, the stock should be able to maintain the current earnings multiple during the next three years — which implies shares could see 30 percent upside during the same period. That would give Google a market capitalization that is close to $1 trillion, Chung told the Financial Times.