YouTube drops sweetheart deals for TV networks

The days of begging and sweethearting television networks to get onto YouTube are apparently gone. Contracts coming up for renewal are getting slashed and Google’s video streaming service is apparently planning on making everyone equal, putting Hollywood into the same 45% ad split everyone else accepts when using YouTube.

Rumors say that YouTube plans to have everyone on that same 45:55 ad revenue split by January and is in talks with TV networks and providers to pen the new deals.

Up to this point, many producers and studios were receiving up to 70% of ad revenues in these sweetheart deals as a way for YouTube to entice them to put their content on the site. This put YouTube on par with streaming services like Hulu, but now that they’re on YouTube, Google must believe they’re in a position to demand more.

This comes as YouTube changes its ad terms, however, which could mean better revenues in the long run for content providers. The company has lowered the minimum ad price and allows sellers to keep the ad revenue generated above that minimum in hopes of enticing more advertising brokers to the site.

YouTube’s new model puts the onus on a network’s sales teams to negotiate higher prices with advertisers than those set by YouTube. It favors major media and entertainment companies with large, experienced sales teams because they are well suited to clear higher rates, particularly if they package those deals with non-YouTube inventory.

Another part of the change may be due to the networks’ content not being as traffic-drawing as YouTube had hoped.

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