YouTube has traditionally only taken 30 percent of ad revenues from Hollywood studios and producers, but according to inside sources, that rate is going up soon.
Contracts are nearing renewal, and the video site will ask for 45 percent of revenues which is what it asks of other content producers, says AdAge.
According to the sources, YouTube will have its big name partners on the new revenue split by January.
However, it’s not all bad news for Hollywood:
“YouTube sets minimum prices for ads it will accept and previously took a flat percentage of whatever the ad was sold for. Now, YouTube is both lowering the minimums and allowing sellers to keep 100% of revenue above that threshold. That means content partners able to sell the ads for higher prices could end up keeping a larger share of the pie.”
Considering that big name media and entertainment companies have a larger sales force, they stand a better chance of being able to negotiate higher prices from advertisers.
While larger companies may not be happy with the new revenue split, they also have to consider the pros.
YouTube has shown it’s a very influential platform, and to abandon such a platform would lose them everything they’ve built up thus far.