A debate is playing out online over whether content creators can make enough money on YouTube. On one side, YouTube antagonists like Jason Calacanis and Mark Cuban have written that the Google (Nasdaq: GOOG) extracts too high a tax on its contributors. Others have defended the site and say YouTube's share of ad revenue, though high, seems fair given the services it provides.
That was the argument made by Big Frame CEO Steve Raymond on his company's blog this week. "How much should you pay as a content creator to had HD video hosted and streamed instantly and with high confidence and low latency to any device or website in most countries in the world, with a functioning ad server and a solid remnant solution and a potential unique monthly audience of ONE BILLION people?" Raymond asked.
Calacanis set off the debate last week when he spelled out his qualms with YouTube's revenue sharing structure, saying the company was asking too much financially from its content creators to justify exclusively distributing content through the site. He said that based on conversations he's had with other YouTube content partners, the site takes between 45 and 55 percent of ad sales. "It's a horrible business deal for content creators to invest in YouTube," he said.
Cuban, who has been a YouTube skeptic for about as long as that has been possible, added on. "Professionally-generated content is pretty much doomed on YT," he wrote on his blog. "If YT can monetize, particularly on mobile [user generated content] UGC with far higher margins, why would they pay 55 percent of revenue to the channels?" he said. Amateurs are uploading more and more video to the site at faster rates, creating even more inventory for YouTube's ad platform to sell. "Why would YT continue to offer any financial support or incentives to professional content creators? There just is no reason to."
Then Calacanis followed up his initial post saying YouTube is could lose much of its professional content to competitors. "YouTube's biggest partners are looking at it 'as a marketing platform,' and that should put all YouTube staffers in a panic." he wrote. "YouTube is becoming the best springboard to a better home," for original online video, he said.
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