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Summary:

$5 million sounds like a lot of money for YouTube to give away to its partners in grants. But given the success of Next New Networks’ Key of Awesome, which was an early recipient of a YouTube Partner Grant, it might be a safe bet.

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$5 million sounds like a lot of money for YouTube to give away to its partners in grants, a move announced during last week’s VidCon conference. But the YouTube Grant Partner program already has one success story under its belt — Next New Networks’ The Key of Awesome.

Prior to its official announcement last Friday, the Partner Grant program had an incubator period beginning last fall, where a very small group of partners received grants under a similar structure. According to Barely Political creator Ben Relles, Next New Networks was one of those participants, receiving funds last October that went towards launching Key of Awesome. The music parody series has since racked up over 100 million views since its launch.

“Obviously [Key of Awesome] was a runaway hit,” NNN CEO Lance Podell said via email. “Support from within the industry from the leader [YouTube] is only more evidence that web original programming is the next source of entertainment.”

Handing out this cash isn’t an act of faith according to YouTube partner development manager George Strompolos, with whom I sat down Friday evening. Instead, he said, “it’s about predictability.” As explained in Strompolos’s blog post announcing the program, Partner Grants are essentially advances on the future revenue share of partners, funds which can be used for anything from production to staffing to equipment.

The key to determining whom YouTube will be approaching as a potential grant recipient (at this point, YouTube comes to you, not vice versa) is all down to looking at partners with pre-established reputations for creating popular content. “We’re looking to make strategic investments in quality content that’s sustainable,” Strompolos said.

The money being granted (and eventually paid back through the partner’s revenue sharing) will range from tens to hundreds of thousands of dollars, depending on a partner’s needs.

As to who else might get involved in the program, Strompolos pointed to Mystery Guitar Man as an example of “a creator who would score well,” but also said that anyone from independent artists to non-profit organizations to companies like Machinima.com would be eligible.

When asked if the program would ever be open to partners who didn’t have the same viewcounts and subscribers as a creator like Mystery Guitar Man — but might be able to move up to the next level with additional investment — Stromopolos said, “We’re starting with top metrics but there’s room for that in the future.”

However, in terms of determining the worthiness of potential grant recipients, Strompolos said, “We always prefer objective over subjective measurements.”

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  1. michaeltapp Monday, July 12, 2010

    “The money being granted (and eventually paid back through the partner’s revenue sharing) will range from tens to hundreds of thousands of dollars, depending on a partner’s needs.”

    Sounds like the kind of deal record companies typically make with bands.

    “We will front you the $ to make the album, but we own the finished product and you have to fully pay back the loan.”

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  4. MichaelTapp hit it on the nose :)

    Basically, its a scheme to milk the talent YouTube has obtained with its platform. Pay up front with the hope of monetarily raping them at a later date. What easier way to filter the talent them my simply filtering the # of eyeballs and filling their coffer with cash to entice the content producer.

    Schemes 101.

  5. Phil Johncock Tuesday, July 13, 2010

    I agree with MichaelTapp and Wow. Seems to be a “loan” and not a “grant” at all.

    Phil Johncock
    The Grant Professor

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  7. It is similar to a record company. ANd it does sound like an investment – not a grant. But a record comapny will also take a huge percentge. This seems like a positive step for YouTube to be taking to create a win win situation for them and their partners.

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