Big media companies have always had a love-hate relationship with YouTube. They don’t know whether to sue YouTube for abetting copyright infringement or get in bed with it because it is the biggest Web video game in town. YouTube is trying to convince them that love is better than war by giving them a cut of advertising revenues from their videos that appear on YouTube, regardless of who put them there.
So far, most of the ads have been contextual overlay ads sold and served up by YouTube. Currently very few media partners are able to sell their own ads on YouTube, but industry sources expect that this program will soon be expanded to more big media partners, possibly before the end of the first quarter. YouTube confirms that a few big partners, like CBS, can already sell their own ad inventory on both the videos in their YouTube channels and any videos with their content uploaded by users that is picked up by YouTube’s Content ID system. But this group is very limited. (YouTube wouldn’t comment on future plans).
YouTube has thousands of traditional media partners, in addition to its Partners Program targeted at super users. The option to bring your own ads to YouTube most likely will not be offered to the super users who come in through the Partners Program. However, it will apply to any videos caught by the Content ID system. YouTube’s content screening technology identifies copyrighted audio and video that can be claimed by media partners. Ninety percent of claimed videos are monetized with YouTube ads instead of taken down.
The ability to sell their own ads on YouTube is a big deal for larger media companies, especially those which are already selling Web video ads across their own sites. Media companies with lots of video tend to have large advertising sales teams that are typically able to command better ad rates than what YouTube can get. The prospect of selling ads against all of their videos on YouTube at those higher ad rates has them salivating, even if they have to share the spoils with YouTube.
As for YouTube, content from media partners represents maybe only 4 percent of all videos on the site, but it is where nearly all of its advertising dollars are coming from. Anything to make that part of the pie bigger would have an outsized impact on YouTube’s revenues.