YouTube to (Finally) Monetize Viral Videos

YouTube (s GOOG) today announced it will share ad revenue with makes of popular one-off viral videos, a sensible move that we’ve urged the site to do in the past. Videos that are detected as accumulating a large number of views quickly will be added, with their creator’s permission, to a limited form of the YouTube partner program, which was previously only available to creators with an established body of popular content.

While YouTube first started sharing revenue with star users in May 2007, the site has been very cautious about selecting which of its videos it monetizes. It doesn’t even show Google AdSense next to non-partner videos. And while that’s certainly depressed the site’s revenue over the last couple years it’s also helped the company avoid lawsuits and sign on media partners. YouTube today only monetizes a sliver of its views, though a Google exec recently said that number had tripled in the past year.

YouTube is not appointment television, so the real benefit of this plan is to capture the zeitgeist of what people are watching on any given day and sell it to advertisers. Not to get all I-told-you-so, but here’s what I wrote in June of last year in an essay called “A Simple Plan to Cash in on One-Hit Wonders“:

“YouTube’s daily hits are irregular, and that’s a big part of its charm. You’re not tuning in at 8 p.m. for your favorite show; you’re getting sent a link by one of your friends, clicking on something related, browsing around to today’s top hit, and looking up from your screen half an hour later. According to comScore, YouTube viewers watch an average of 49.7 videos per month on the site. The real action on YouTube on a daily basis is unpredictable — it often comes from first-time uploaders with compelling content that separates them from the pack.”

On a conference call today with reporters, YouTube did not disclose a specific threshold for including virals in its partner program, but it does already have a program for targeting ads to videos it thinks it is about to go viral based on acceleration of viewing, favoriting and ratings (of course, only for partner videos).

YouTube is today inviting a thousand or more established virals to be part of the program, said Tom Pickett, the site’s director of online sales and operations. He said the two-year-old hit Battle at Kruger, which has more than 45 million views, still attracts thousands of views per day.

A side note: Fans of the JK Wedding Entrance Dance had noted that the bride and groom in that great recent viral didn’t profit from their own creativity, even after Sony essentially approved the video’s unauthorized use of Chris Brown’s “Forever” and had YouTube add revenue-sharing links to buy the official song — something YouTube had trumpeted as an example of new frontiers in monetization. A YouTube spokesperson noted today that the new one-off monetization program still wouldn’t put any coin in Jill and Kevin’s pockets, since it’s currently incompatible with the Content ID program that Sony is using for the video.