YouTube will begin sharing advertising revenue with users who upload original content that becomes popular.
Depending on the number of views and how well shared the video is, YouTube plans to share an undisclosed percentage of advertising funds.
YouTube has been widely criticized because of its lack of ad revenue, with a growing number of Google investors who are unimpressed with the current advertising performance.
The previous system required interested YouTube users to enroll in a partnership program — most users of popular videos didn’t enroll, which means they didn’t get paid. The new system will have YouTube send out automated messages with an “enable review sharing” message. If the YouTube user agrees, the site will begin selling ads against the video.
It’s unknown how many views a video must receive to be entered into the expanding program.
Although Google plans to promote user-made content, the site also is working with Hollywood movie studios and large record labels.
YouTube now has partnerships with several different Hollywood studios, seeking to woo new advertisers. The YouTube deal with Time Warner will open the door for Warner Bros., Cartoon Network, CNN and TNT video clips to be shown online.
In addition, YouTube also has numerous official channels from record labels, which provide music videos and exclusive interviews.
The exact financial details surrounding YouTube remain unclear. Credit Suisse analysts believe YouTube will lose up to $500M in 2009, while Goldman Sachs anticipates YouTube to post a $300M revenue.
