Los Angeles Business Journal

YouTube Ad Rates Expected to Rise for TV Networks

By Tom Dotan Thursday, October 31, 2013

TV networks on YouTube have been accustomed to getting special deals when it comes to sharing ad revenue. They're about to get treated like the regular folks.

The video streaming site is lowering the broadcaster's take from 70 percent of advertising revenue to 45 percent, considered standard for most YouTube channels. The news was first reported by Ad Age, which suggested YouTube's introductory rate was intended to match the ones offered by competing video streamers such as Hulu.

An industry source confirmed to the Business Journal that a new revenue share for TV networks is happening, and said it's a shift they've been aware was coming for some time.

There isn't an across-the-board zero-hour when the new rates take effect; rather the moment of the shift depends on the original agreement between a network and the Google Inc.-owned site. In 2008 CBS became the first to post full-length episodes onto YouTube, with the other major broadcasters soon following.

For some content creators, the specifics of the revenue share with YouTube has been a sticking point. Some claim the streamer's take is too high, while others argue YouTube provides plenty of services to a creator at no charge, such as a stable, high-bandwidth platform and Google's fleet of salesmen.

YouTube has until now declined to alter the standard revenue share agreement. However, a recent policy update allows any channel that sells an ad at a higher rate than Google's minimum fee to keep 100 percent of the difference. That policy could prove to be a big benefit to TV networks, which already have large media sales teams of their own.