Typing Faster

September 7, 2010

Mad Men: Working With the Pirates

Filed under: Future of TV, Mad Men, Marketing — petertypingfaster @ 9:51 am

It seems like we’ve turned a corner in TV’s ongoing quest to monetize the internet, and YouTube’s ongoing quest to monetize itself. Anyone who’s used YouTube in the last six months will have noticed something: There are a lot more ads than there used to be. But what’s interesting is how YouTube has started to share the revenue from those ads.

From an article in the New York Times:

Last month, a YouTube user, TomR35, uploaded a clip from the AMC series “Mad Men” in which Don Draper makes a heartfelt speech about the importance of nostalgia in advertising.

Viewers wouldn’t notice, but that clip also makes an important point about modern advertising — YouTube is an increasingly fruitful place for advertisers.

In the past, Lions Gate, which owns the rights to the “Mad Men” clip, might have requested that TomR35’s version be taken down. But it has decided to leave clips like this up, and in return, YouTube runs ads with the video and splits the revenue with Lions Gate.

This, of course, marks a serious shift in the relationship between studios, broadcasters and the “Internet.” A conversation that was once dominated by talk of lawsuits and copyright infringement has morphed into a conversation about how each side can maximize revenue by working together.

YouTube’s new profitable relationship with content creators was not always so easy. For a long time, YouTube executives spent their time across conference tables with lawyers worried about copyright violations, said Chris Maxcy, YouTube’s director of content partnerships.

“It was 90 percent lawyers in a meeting and the marketing people faded into the background,” he said. “Now the partners we are working with get checks that get bigger every month. And now when you walk into a meeting there’s almost no lawyers, or there’s a couple of lawyers but they are deal lawyers there to help you get your contract done.”

And YouTube is not just using your typical broadcast ads either. They’ve embraced the interactivity allowed by the internet.

When someone uploaded a recording of the Eminem song “Not Afraid,” for instance, instead of taking down the recording, YouTube ran pop-up ads that let people buy the song or the ring tone and shared the revenue with the copyright owner.

And we’re not talking peanuts here. It turns out that those little ads that Google’s running over top of clips can result in a tidy little profit, to the tune of $450 million. Sure, they’re not Google type numbers, but it’s enough for YouTube to squeak into the black for the first time in its history.

But how much of this new revenue is being passed along to YouTube’s advertising partners? Numbers are scarce for the media conglomerates like Lion’s Gate, but certain individuals with big enough followings can apparently make up to $100,000 a year from shared advertising revenue.

Good to see someone starting to get some money out of the internet.

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