YouTube Networks: 7 Things You Need to Know
3. If one network thinks you’re awesome, odds are the other ones do too.
Remember – they all need content, and believe me – there’s not a lot of good, proven content out there. If they think you got what it takes, then the fact is, you got what it takes for every other network as well.
Strong negotiation requires a good “Best Alternative to a Negotiated Agreement” or BATNA (This is outlined in great detail in the book I recommended). The beauty of being a YouTube Partner is that your BATNA is very strong – you can continue making money as a YouTube Partner. The allure of the network might be that you can make more money, but you’re probably not totally desperate to sign on with them. You can always walk away.
If you don’t like what’s on the table you should willing to walk away and approach another network directly. You may not be able to tell that other network what the first network was offering (if you signed a non-disclosure agreement), but you can say you’re fielding offers from other networks and wanted to see what they could do for you.
In fact, the moment you get approached, get in contact with every other network who will listen, send them your stats and an outline of your channel, and see what they’ll offer you. Let them know you’re being courted by the other networks, and let them sling mud at each other. When the dust clears, pick the best deal.
4. Flat CPMs suck.
From our research, the CPM (cost per thousand impressions) rates these companies offer range anywhere from $2 – $5 or more. These are flat rates for video views. At first that sounds like a great deal, right? It’s a guaranteed amount and it’s probably more than what you’re making normally.
As a quick side note – students of internet history will be interested to know that those CPMs are paltry compared to the tech boom hey-day. Back then, you could be getting $15 CPMs or more for freaking pop-up ads! That was a good time to have a popular website.
Networks take all their creators and lump their stats together. When considered as a whole, those stats are mega-super impressive. Millions or billions of monthly video views. They then take this aggregate amount and use it to sell to advertisers (“Look guys! Look how many people we have!”), who in turn pay them a lot of money to access those views.
For all online advertising, CPMs differ from quarter to quarter. In the early parts of the year it might not be much, but come Q4 (i.e. the holiday season), advertising revenue shoots through the roof. A lot of this has to do with companies advertising for the holidays, as well as departments needing to spend their budgets so they can justify asking for more the following year. If you’ve ever worked on commercials, you’ll know the end of the year is a time when you can book gigs left and right.
It goes without saying that the CPMs the networks can get when selling an aggregate of channels is far more than whatever paltry sum they’re offering you as a flat rate (they’re trying to make a profit, after all). A $2 CPM might seem like a lot, until you realize that they could be selling your content at a CPM of $20 or more.
We even had a network tell us once that their CPMs were so great that their company lost money most of the year on that. Of course, what they didn’t mention is that they make that up in spades come the end of the year.
Instead, what we should all be asking for is a baseline flat CPM, coupled with a percentage of anything they sell above that. If times are slow and they’re breaking even with your content, fine. Getting the base rate is fair. But if they’re getting $20+ CPMs, I don’t think it’s fair that your content receives only a tiny fraction of that amount while the vast majority goes to lining their pockets, do you?