Pricing Structures for an Independent YouTube Network

[JoeBloom]

Hi fellas. Hope you've all had a lovely Christmas and New Year, and that you're all looking forward to getting into some new projects for the year! I know I am.

Speaking of which, I am in the preliminary stages of a new business idea I have to set up what is essentially a YouTube network, which has its own content and collaborates with others in the ultimate goal to be a network youtube channel whereby others would want their videos to be on it and we would pay them for that content, this is an ultimate goal but in the early days it would of course be trying to produce content to create a viable business from advertising revenues.

I'm currently thinking about the kind of content I would create, and I would of course be using a variety of avenues to do so, such as using myself, close friends and family, as well as actors and crew that may be needed for the project(s).

I am beginning to realise that the actors I have previously worked with are often open to working for free in order to boost their portfolios. I've worked with people who are just looking to get their faces in things, and from work I paid them for I could of got them for free if I looked hard enough, I'm talking about actors who don't have a huge amount of experience, but enough to pull off decent performances in small productions. From this I believe I could grab the attention of actors to be a part of my/our projects by offering payment to them on a Shared Revenue scheme.

I wanted to throw this out there, and get some feedback on whether people would consider it viable. For example, let's say I need two actors and an extra crew person for sound for one project for a video. For a start, any pay to go to those who worked on the project would be on a per-video basis (rather than per day), the reasoning behind this is to yes offer a form of payment to contractors but also in a way that creates no cost to create the content (or very minimal), and payment to both myself/my network and those who worked on it would be on a success-or-not (views/ad revenue) basis.

So let's say we worked to create a video. As the owner of the content I would take 40% revenue, then share out the rest 20/20/20 amongst the crew member, and the two actors. Should this be a permanent contract? Or say a % share for certain amount of time/certain amount of views?
This is a vague example.

Do you think this is at all possible? This will be mostly for me a side project, something which I would do in my free time and keep working at it through sheer enjoyment of doing it and hopefully be able to go full time with it one day, have to start somewhere though!

Let me know your thoughts.

 

[Zensteve]

Do you think this is at all possible? This will be mostly for me a side project, something which I would do in my free time

There's nothing wrong with the idea at all, but you don't seem to be considering just how much work will have to go into managing and tracking everyone's portion of the revenue stream. Once you get beyond a handful of names, it quickly turns into a fulltime job in itself, even with the help of a dedicated custom spreadsheet.

Anyways, that's my initial thoughts. So there.

p.s. You need a new camera to take avatar pics with. Your current one is pixelated like you wouldn't believe.

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[JoeBloom]

There's nothing wrong with the idea at all, but you don't seem to be considering just how much work will have to go into managing and tracking everyone's portion of the revenue stream. Once you get beyond a handful of names, it quickly turns into a fulltime job in itself, even with the help of a dedicated custom spreadsheet.

Anyways, that's my initial thoughts. So there.

p.s. You need a new camera to take avatar pics with. Your current one is pixelated like you wouldn't believe.

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Thanks for sharing your thoughts. That is definitely something I would need to take into deep consideration.. thanks for enlightening me. Any suggestions on alternatives, or how best to combat the issue? I'll have a think on it myself, just wondering.
Obviously I want to make most of the effort a creative one, rather than having to mess around with accounts too much, unless I share ad revenue with yet ANOTHER person just to handle accounts!? Ha.

p.s. Oh is it? I hadn't noticed, I'll fix that immediately.

 

[JoeBloom]

Would love to hear if anyone has any further suggestions as to how to manage a revenue stream amongst various people of different percentages. It's a tricky one! Google has thus far not been helpful.

 

[ItDonnedOnMe]

There was a popular book years ago (pre-digital) called "Feature Filmmaking at Used-Car Prices" which espoused basically the same approach - the problem always comes down to the overhead of tracking the distribution of profits. It's hard enough on a one-off feature project, but I imagine it would be a nightmare to do across a series of smaller projects with different people involved in each.

It should be pretty straightforward to set up a spreadsheet on google docs to do the calculations. First row is income, each additional row is a crew/cast member with a formula set to calculate a percentage of the first row. Each column then becomes whatever period you are using - monthly, quarterly, etc. If you're aggregating income from multiple sources and/or deducting expenses you might want to add a worksheet for each period, list all income/expenses in that sheet, then link the income field on the first sheet to the total from that sheet so they stay in sync as you make updates.

So that shouldn't take long to set up or maintain - but imagine having this set up for 10 different projects and you can see the overhead of keeping up with it starts adding up. Now consider that in all likelihood the revenues you'll be splitting up are in the range of tens or maybe low hundreds of dollars (if you're lucky) a month - it's a lot of work to go through all that so you can send a bunch of people $5-$10 checks each month. I'd say you might want to put more time in up front figuring out how to generate a substantial revenue stream before spending too much time figuring out how to share those revenues.

 

[JoeBloom]

There was a popular book years ago (pre-digital) called "Feature Filmmaking at Used-Car Prices" which espoused basically the same approach - the problem always comes down to the overhead of tracking the distribution of profits. It's hard enough on a one-off feature project, but I imagine it would be a nightmare to do across a series of smaller projects with different people involved in each.

It should be pretty straightforward to set up a spreadsheet on google docs to do the calculations. First row is income, each additional row is a crew/cast member with a formula set to calculate a percentage of the first row. Each column then becomes whatever period you are using - monthly, quarterly, etc. If you're aggregating income from multiple sources and/or deducting expenses you might want to add a worksheet for each period, list all income/expenses in that sheet, then link the income field on the first sheet to the total from that sheet so they stay in sync as you make updates.

So that shouldn't take long to set up or maintain - but imagine having this set up for 10 different projects and you can see the overhead of keeping up with it starts adding up. Now consider that in all likelihood the revenues you'll be splitting up are in the range of tens or maybe low hundreds of dollars (if you're lucky) a month - it's a lot of work to go through all that so you can send a bunch of people $5-$10 checks each month. I'd say you might want to put more time in up front figuring out how to generate a substantial revenue stream before spending too much time figuring out how to share those revenues.

All solid points. Thanks very much for your input.
Of course I am yes, thinking ahead a fair bit, as I do need to create something substantial of worth before I would or should be worrying about revenue streams. However the thing is my plans are to use actors quite early on, just one or two on possibly a recurring project, and would like to be able to offer them something of value more than just to be featured in a project.

In saying that, it may be best considered to offer projects to actors/crew at first on an unpaid (or expenses depending on my spare change!) basis initially, and continue to do this until there is a substantial revenue stream that can then be used to share between participants. It may be that the most logical way to do this is to build up the revenue first by spending 0, to then be able to offer paid work once there is an actual revenue to speak of, simplifying the entire process. As well at that point, I would have a good idea of potential earnings for projects from previous ones made on the cheap/free, and can decide on pay accordingly.

This is going to be a part-time project for me, taking up my spare time until it reaches a stage of noticeable revenue, from then I will see how I go and if I can go full time. Of course, yes, I am thinking massively ahead, I'm a dreamer.

Here's to a successful 2014!