YouTube to Creators: Let Us Help You Make More Money

A new feature allows some channels to raise funds directly from their YouTube pages.

Jun 30, 2014 at 7:30PM

At last week's VidCon gathering of online video producers, YouTube unveiled a slew of tools for improving production. Yet a new funding system might be the biggest win of all -- for creators, fans, and Google (NASDAQ:GOOGL)(NASDAQ:GOOG) investors.

Letting fans give their due
YouTube's list of add-ons includes new tools for managing and tracking videos from a smartphone or tablet, new sound effects, playback support for video shot in 60 frames per second, fan-contributed subtitles for translating foreign language videos, new ways to create playlists, and more. Of them all, a simple "support" button for soliciting funds looks to me like the biggest win. Here's a closer look:

Soulpancake Screen Annotated

Now YouTube is offering a way for channel operators to raise funds directly. Credit: YouTube.

Click the button, and up pop options for the level of funding you want to commit. A few bucks is all most sites ask for, though fans can pay as much as they would like. Think of it as a low-effort Kickstarter campaign that never ends.

Feature (almost) complete
Remember when the popular YouTube show TableTop took to Indiegogo to raise funds for its next season? At the time, Google didn't have a cohesive strategy for backing ongoing series or their parent channels. Adding a "support" button gives YouTube's best fewer reasons to go elsewhere.

And make no mistake, they do have options. Not just for fundraising, but also production and distribution. Some of the biggest names in media are pouring millions into new Web shows. Meanwhile, Vimeo has established a $10 million fund to back select independent movies as big-name creators use the platform to distribute their pet projects. Joss Whedon recently did just that, releasing the new film In Your Eyes to Vimeo as a $5 download.

YouTube star search
Hollywood executives have taken note of the shift, scouring YouTube, Vimeo, and other services for new talent. In March, Walt Disney acquired Maker Studios and its lineup of popular YouTube shows for $950 million. Time Warner recently invested in gaming channel Machinima. YouTube wants the next big find to be on its platform, which puts pressure on the website to give creators more of what they want.

Plus, there are good financial reasons to do so. YouTube generates roughly $2 billion in annual revenue, after accounting for ad-sharing payouts to channel partners. Gross revenue spiked more than 50% last year alone. That's amazing growth which is dependent on getting the best creators to keep submitting their best work to YouTube, a stated priority for Susan Wojcicki, the business unit's new CEO.

"Anyone can create an audience, and it is really the community and the global audiences, which are saying here are the people that we are choosing to watch. Once they have reached that level, there's a lot more that we can be doing to support them and to be making other people aware of them," Wojcicki told Fortune in a recent interview.

Investors should hope she makes good on the promise to do more for creators. After all, more than any other segment of Google's business, it's YouTube that is most closely associated with TV and TV advertising -- a market that still generates hundreds of billions in revenue that the search star has barely tapped into.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Google (A and C shares), Time Warner, Apple and Walt Disney at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Google (A and C shares), Apple and Walt Disney. The Motley Fool owns shares of Google (A and C class), Apple and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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