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Business Impact

Video site YouTube shares revenue with more content providers

SAN FRANCISCO (AP) – If you create and post slick videos on YouTube and have a devoted following of online fans – even if they’re just watching you lip-synch in your parents’ basement – you could make money from your efforts.

Google Inc.’s YouTube division announced Friday it would begin a revenue-sharing program for people whose videos become big hits, including Internet celebrities who use pseudonyms LisaNova, renetto and HappySlip.

YouTube already gives corporate partners such as CBS, Sony BMG and the NBA a cut of advertising revenues, but the San Bruno-based division of Google announced Friday it would extend similar partnerships to ”thousands of mid-sized to large content creators who range from video game companies to universities to production houses.”

A growing number of amateur and professional videographers are producing sophisticated series, sequels, concept videos and sitcoms – not for television but for the Internet. Many of the shows have developed a cult following around the world, and corporations want to place advertisements near their videos.

”If you look back to early 2006, the videos were things that users had captured with their video camera or of them sitting in front of their Web cam,” Jamie Byrne, head of product marketing for YouTube, told The Associated Press on Friday. ”But in the last year, we’ve seen an evolution of the creativity. We see people building a large, persistent audience with episodic content. We wanted to recognize and reward the commitment these people have made to YouTube by making them content partners.”

The revenue-sharing announcement may have also been prompted by cash-for-content models of competing sites such as Metacafe Inc., whose video-sharing site gets 25 million unique visitors per month. The company pays content generators $5 when videos are viewed 1,000 times.

Another YouTube rival, Revver Inc., splits advertising revenue 50-50 with the people who create the videos. A former talent agent helped launch the site in 2005.

YouTube would not provide specifics of how it would share with its producers.

Executives said they have already contacted 20 to 40 individuals and independent studios to kick-start the revenue-sharing program, including lonelygirl15, smosh and valsartdiary, which are among the most popular video clips online. YouTube is asking anyone else interested in sharing revenue to fill out an online form.

Executives would not say whether they’d select partners based on the number of videos posted, viewed or other metrics. Byrne acknowledged that YouTube will select partners based mostly on quantifiable metrics – but partners should also have ”intangible” characteristics.

”We’ll look at their standing and participation in the community as well,” he said.

Erick Hachenburg, CEO of Palo Alto-based Metacafe, said YouTube’s partnerships with producers of videos that are already popular defeats the point of Internet broadcasting, which should help unknown talent get discovered.

”We think everyone should have a chance for success,” Hachenburg said. ”It’s the equivalent of waiting tables in L.A. Then the fact that YouTube is picking a few people who are already big stars doesn’t really help the waiter.”

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