Thanks to his extensive industry knowledge and unbounded candor, investor Jason Calacanis has become one of the most important voices in the YouTube space. Calacanis has seldom held back his criticism of YouTube and its aggressive revenue split, and his latest blog post returns to this topic once again. In response to Google’s announcement that Susan Wojcicki has replaced Salar Kamangar as YouTube’s CEO, Calacanis has offered some suggestions for Wojcicki on how to make YouTube better.
Most of Calacanis’ blog post reiterates points he’s made before: YouTube is hugely important to Google, the site’s revenue split makes money scarce for creators, and the partner program needs to be more of a two-way street. The most interesting part of Calacanis’ post is his suggestion for a four-tiered partner program that would reward channels with more subscribers.
Calacanis has proposed this system in the past, but in this post he lays out the exact framework for how it could work. Partners would start at the ground level with a 50-50 revenue split and relatively few privileges. Each successive step would kick in at certain subscriber milestones. Channels with more than 500,000 subscribers would reach the top tier, which would include an 80-20 revenue split in favor of creators, the ability to cull e-mail addresses from subscribers, one-year advances to cover production costs, and partial control over channel pages.
In a competitive industry, Calacanis’ proposal is a sound one. It allows YouTube to take an even bigger cut from the vast majority of creators while rewarding those who must put in enough time to make YouTube their full-time profession.
The problem is that the online video space is not competitive enough. Platforms like Vine have made inroads into YouTube’s audience, and other upcoming platforms could continue that trend, but as things stand now, YouTube still controls the vast majority of the online video market (Calacanis previously hinted at two competitive platforms set to debut last fall, neither of which have yet materialized.) Therefore, Wojcicki has little reason to prioritize this issue; in fact, catering to creators would increase ad inventory, which would in turn continue to diminish YouTube’s dwindling ad rates.
Some YouTube competitors could arrive soon. When they do, Calacanis’ partner tiers are worth revisiting. For now, though, expect YouTube’s policy to remain unchanged.