YouTube has been proud to own the tagline “Broadcast Yourself,” but is this merely a way for YouTube to gather user generated content in order to turn over a profit?

The creation of YouTube was developed with the idea that users would be able to showcase their work for their niche audiences – it is a platform that allows “amateurs” to broadcast themselves without needing the expensive, heavy-duty equipment of a big broadcast network.  However, since its launch, YouTube has become worth $23.1 billion.

Check out a few other YouTube statistics:

  • 1 billion unique visitors visit YouTube each month
  • Over 6 billion hours of video are watched on YouTube each month
  • 100 hours of video are uploaded onto YouTube each minute
  • YouTube reaches more adults ages 18-34 than any cable network

From the 100 hours of user generated content that is uploaded to YouTube every single minute, YouTube is able to sell space before this content to advertisers –  generating a hefty profit in doing so.  Although users, who’s film is used as leverage as a means of attracting advertisers, do see some form of that profit, YouTube – who is essentially the production company – essentially sees the majority of the revenue from this user generated content and becomes the real “winner” in this business contract.

If you decide to take a step back and really think about what YouTube provides to your company, you’ll realize this: while YouTube may generate the “likes” and “views” from a consumer audience, your company is missing out on the profit that YouTube receives from the advertisers before your video.

For example, if ESPN decides to place an interview on YouTube, and that video has an advertiser before it and generates a million views – YouTube receives the majority of the profit from that advertiser, not ESPN.  Meanwhile, yes, ESPN generated a good amount of “views” and received recognition from their interview, but they missed out on all of that extra cash that was just within their reach.  This cash could have easily been in their company’s pocket had they owned the right to the video platform.

Presently, YouTube has decided that they’ll maximize their digital media thumbprint by providing the world with “YouTube stars” – so now not only will YouTube be generating profit off of someone’s work, but they’ll also be taking the credit for “discovering” them.

“YouTube stars are going to get their own promotional TV spots and premium-priced ad rates as part of an effort to package online video stars like they’re traditional TV celebrities”

Just like in TV, the real money makers are the broadcasters and networks that produce the hit shows, not the talent.  YouTube will therefore be leveraging the talent in order to generate more awareness for YouTube as both a media space and an advertiser’s dream audience.

In spinning this “YouTube star” phenomenon off as something that will bridge the gap between consumers and advertisers, YouTube states that they are simply leveraging the experience of user generated content and making it more valuable in the market place – therefore recognizing amateurs for their hard work.

This is “helping to narrow the chasm between the scrounging, do-it-yourself world of largely amateur internet video and the polished, big-budget world of broadcast and cable television”

The best way for companies to combat this is to own their media and, likewise, own the advertising rights that are placed before their media clips.   Owning the media and the distribution rights is a substantial part of the money that can be earned from mobile video.  When a company allows YouTube to cash in on the profit, they are practically giving this production service free money.  Why would you allow YouTube to cash in on your company’s success when you could have the option to place that profit in your own company’s pocket?

What are your thoughts on the arrival of “YouTube celebrities”? Be sure to leave your comments in the section below!