Business

YouTube millionaires

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Google’s success in wringing more ad revenue from YouTube is giving rise to a new class of dot-com millionaires.

Google revealed last week that it is running ads against three billion videos a week on YouTube, up 50 percent from last year. That means the amount of cash it shares with its YouTube partners is going up as well. Google gives its content makers more than 50 percent of the ad money from their videos.

Hundreds of YouTube stars are making more than six figures, and hundreds more are making more than $40,000 a year — roughly the median salary in the US. There are even stars who have topped a million dollars, although the company wouldn’t say how many.

“However well YouTube does, the partners are doing better,” said Kate Rose, a member of YouTube’s communications team.

That means a number of people are quitting their day jobs for a full-time stint on YouTube. They start as amateurs and when Google sees their stars rising, the company reaches out to them to join the YouTube Partners program. There is also a program for one-hit wonders to attach ads to their viral videos.

Maangchi, a.k.a. Emily Kim, started posting Korean clips on YouTube from her kitchen in Canada three years ago. She later moved to Manhattan’s West Side and worked as a counselor for a nonprofit while continuing to post her Korean cooking show on YouTube.

She has grown into a minor Web celebrity and quit her day job to focus on developing her brand. She has a YouTube channel, a Web site and an iPad app.

“I had to choose,” she said. “So I quit my counseling and I chose YouTube.”

She now makes a living equivalent to what she was making in the nonprofit sector — but not yet six figures, she said. Maangchi has invested in the quality of her productions and now delivers a more polished product to her followers, which is how a lot of YouTubers progress.

“We’ve seen partners evolve over the last three years,” said Shenaz Zack, product manager at YouTube. “We’ve seen the production value of these videos have gone up tremendously. No longer are they bedroom-only .”

There was a time when Google was criticized for paying $1.65 billion for YouTube in 2006. The site was popular but not profitable, and making money off it seemed questionable.

Today, the site is paying off. Evercore Partners forecast that the site will generate $900 million in revenue this year, up from $640 million last year.

Google says it has 15,000 partners around the world, and they take home a bigger slice of the ads than the company. That means a YouTube Partner could pull in $30,000 on average this year if they split the pot evenly with Google.

Of course, that’s just a rough estimate, and not all of Google’s YouTube ad money is generated through the partners program. Still, the potential to make a living on YouTube is clear.

“Yes, you can make millions of dollars on YouTube,” Zack said. “But if you want to consistently keep at it, it’s a full-time job.”