January 27, 2007 6:12 pm

YouTube plans revenue share with users

Google is planning to share advertising revenues on its YouTube video sharing site with the individuals who submit the films.

Chad Hurley, the co-founder of YouTube who sold the site to Google for $1.65bn last year, told the World Economic Forum in Davos it would introduce the system within months.

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Other video-sharing sites such as Revver and 3’s mobile phone service in the UK already make payments to users who post videos popular enough to generate advertising revenue. However, none can match the scale of YouTube’s audience or its online video library, indicating that it could generate far more money for users than other sites have done.

Mr Hurley said YouTube had resisted this business model before because “we didn’t feel it was a great way to build a community. We wanted to keep it pure.”

People were principally motivated to share content online “to get a reaction,” he added. Since being taken over by Google, however, “we are getting an audience large enough where we have an opportunity to support creativity, to foster creativity through sharing revenue with our users," he said. "So in the coming months we are going to be opening that up."

Speaking on the fringes of the meeting, Mr Hurley told the Financial Times YouTube had not yet decided how large payments to users would be, but highlighted Google’s rapidly growing advertising revenues. “Google has a large pool,” he said. YouTube has received subpoenas from several media groups, concerned that its audience has loaded illegal copies of their content on the site.

Mr Hurley said it was working on technology that would identify copyrighted video content, and implementing “audio-fingerprinting” to ensure music companies are paid for use of their songs in YouTube clips.

In the same forum, Microsoft founder Bill Gates hinted that valuations for some of the new generation of internet companies may be irrational. The dotcom boom and bust had not stemmed the growth in personal computers or broadband connections, he said, “but there’s this other manic depressive on the side who’s valuing [companies]. In 2001 he wasn’t taking his medicine at all. Maybe he’s a little bit hallucinating now.”

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