YouTube announced a couple of days ago they’re expanding their Partner Programme to Australia, Japan and Ireland. But is this really good news for content producers?

‘Now open in six countries, the YouTube Partner Program is our way of recognizing the most popular and prolific original content creators in the YouTube community worldwide,’ the announcement says. ‘It’s only been four months since we first expanded in December, but the results have already exceeded our expectations: we’ve paid out more than $1,000,000 in total revenue to user partners as part of the Partner Program.’

I’m not the first to point out that these figures stink. NewTeeVee worked out they mean content producers paid by YouTube are on average earning only about $800 per million views they receive — that’s $0.0008 cents per view. According to Alley Insider, the producer of the 2-million-view indy sitcom ‘Break a Leg‘, Yuri Baranovsky, received a paltry $1,600 from YouTube… which, apparently, is better than any other online streaming video outfit is paying. ‘This […] has to do with the current Internet model,’ says Baranovsky. ‘If anything, YouTube is the only company that has at all helped us pay off some of our costs… YouTube is the only game in town.’

Hank Williams over at at Why Does Everything Suck? concludes two things from Alley Insider’s data:

• There is absolutely no market value at all to user generated video. Zero. None. Nada. Actually there is a market value, but its negative.
• The only company in the world that might have had a chance to make money with YouTube can’t, and so the 1.5 Billion dollar price Google paid for YouTube was an enormous overpayment. If anyone else had gotten their hands on it they would have shut it down by now.

So, was South Park S12E04 right? Baranovsky, Magibon and the rest of them might as well just pack up their webcams and go home? Well, no. I’m on record as saying that the economics of streaming video are stupid (see Stage6: The Beginning of The End of Streaming Video), so I’ll be pretty surprised if YouTube doesn’t turn out to be a dog, albeit one on the leash of a mighty, deep-pocketed master. But I don’t buy for one moment that this means online video has ‘no market value.’

This might seem strange for me to say today, since I only two days ago admitted we haven’t made back our investment in STEAL THIS FILM — but I’m still very optimistic for the prospects of making media specifically to be distributed online. STF has received about $11,000 in donations (that’s a very close approximation) since the Dec ‘07/Jan ‘08 release of STF II for around 1.1m downloads, against an investment of about $50,000. Obviously this is about 10 to 14 times as much as a YouTube star is able to get, even taking into account YouTube’s claims that they pay different (undisclosed) rates to different partners. The real message is not that we have covered ‘only 1/5th’ of our expenses (and remember many people help us a good deal simply by donating bandwidth to a Torrent swarm!), but that in this truly revolutionary moment of being able to make and distribute ‘mass’-scale media ourselves, we are beginning to see that donation models can provide a significant portion of our revenue.

It’s important to remember we’re doing this with none of the infrastructure that a corporation like Google/YouTube is able to bring to bear getting in advertisers and linking them to ‘relevant’ content. In fact (by design) we don’t have any advertisers on stealthisfilm.com, nor is the site the primary venue for the film’s downloads. We are able to open to a number of contexts, to choose our formats, write our own legal agreements, and decide on how we do business. If the MPAA or RIAA decides they don’t like what we’re saying, there’s no one they can apply to to have us ‘taken down’ (and you can bet they’ve tried). And on top of all these advantages, we’re earning 14 times as much as YouTube stars (or should that be “serfs”?)

There’s no other way to spin it: the YouTube model in which media is given away in a limited fashion in order to advertise around it (content as ‘flytrap for eyeballs’) is seriously undermined by these figures. And yet it is a prevailing orthodoxy: STEAL THIS FILM’s post-fact donation model is often portrayed as second-best or defeatist alongside the more reassuring idea that ‘the future is in advertising’. If Google has thrown its weight behind a model, it must be real, right?

Apparently not: we may not have all — not even very many of — the answers, but we can show content producers a self-operated model that is not only autonomous, but vastly more profitable than that which YouTube is proferring. The simple fact is that right now, the good grace of ‘pirate’ networks is a better bet than the hyped, cramped, underpaid corporate ghetto that is YouTube. Sing it from the rooftops: we, not YouTube, are ‘the only game in town’.