One Way to Make a Living on YouTube

It is often hard to find a way to make a living producing content for the Web.  But in January, WIRED Magazine did a feature on the YouTube Laugh Factory, as they called it. What the title refers to is an independent studio system growing on the fringes of Los Angeles. These producers are not making content for the big Hollywood studios or the TV networks, but for their own and others YouTube channels.

Many of these players, including Tay Zonday, LisaNova, Nice Peter and Jimmy Wong, have parlayed their viral video success into a decent living. As WIRED noted, viral stardom generally involves a moment of fame followed by a plunge back into anonymity. But Zonday and others have figured out how to take their moments of fame and translate that into earning more money each year from the dozens of videos they continue to post on YouTube. As part of YouTube’s Partner Program, Zonday can generate revenue from the ads running on his YouTube channels.  According to WIRED, based on a Google ad rate of $1 to $3 per thousand views, Zonday’s share could be anywhere from $24,000 to $72,000 per year. His videos are seen approximately 2 million times per month.

What this has led to is the growth of independent studios such as Maker Studios, which manages a significant number of partner channels. The studio emerged from a small group of content producers in 2009 into a business with more that 200 partners and over 100 support staff. As WIRED points out, their business model is simple. Maker takes a cut of the partners’ share of ad revenue. In exchange they provide emerging talents with the expertise they need – on the creative, production or technical side. According to Maker’s founders, this model is comparable to the United Artists studio formed in 1919.

There are few successful revenue models for creating content for the Web, and many graduates of film schools still feel they need to follow the traditional path of producing for the big studios. Or hope that crowd-sourcing will somehow finance their next project. So it is interesting that this group of viral video producers is forming on the fringes of Los Angeles, not to break into Hollywood studios but to work with each other. A new sort of studio system is beginning to take shape for content destined for the Web. Of course, as noted, most of the billion YouTube accounts don’t earn a penny.  But this group of content producers are finding a way by doing what they’ve grown up doing – playing around on YouTube.

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