I think we are about to enter an era where creators (finally) will be able to feature copyrighted material in exchange for a certain % of the revenue. Ideally the revenue cut will reflect actual usage of copyright material i.e in proportion to % of the video.
We're in a nebulous area of copyright law right now. To think that this is an olive branch from copyright owners is an enormous mistake.
My reasons are as follows:
YouTube operates on an immediate punishment, deferred resolution system in favor of copyright holders. ALL content can be flagged, regardless of type without any oversight or review. This is a clear violation of the principles of Fair Use. In order for someone to do a review or news piece of/on Nintendo product, they need to let Nintendo claim some of that revenue. This introduces a conflict of interest. News stations don't have to pay Budweiser when they do a news story on the company. Nor do reviews of any kind ever have to ask permission to do their review. It is the entire basis of consumer protection in law.
And, I personally don't believe in the idea of visual sharing of gameplay being a violation of intellectual property. This is a misnomer we have been fed by lawyers over the last 15 years that video games are licensed, not purchased. Absolute garbage. It is an interactive medium in which the player, whether through voice or not is creating a new experience simply through their own choices and methods of interacting with the software. It is no different in my eyes to a visual sharing experience of playing any other game of any type, whether boardgame, sport or hell, even action figures or toy cars.
I'm not too concerned at the moment that this will take off. Nintendo has essentially ensured that a significant portion of their most enthusiastic fans with YouTube channels won't upload videos. They've actively reduced their incoming views and thus exposure by electing to take 30-40% of the revenue. Here's some numbers to show that it's not just wrong to do, it's also stupid. In order to buy 1,000,000 views on YouTube through standard CPM rates of $8, you need to spend about $8,000-$10,000. If bought enmasse it roughly mirrors a $0.01 per view cost. That $8,000-$10,000, will be reduced by 45% to pay YouTube, and further reduced by 60-70% for the revenue share concept. So Nintendo will bring in somewhere around $1,300-$1,600 in ad revenue from every 1 million views. Just for some rough proportional numbers, let's say monthly Nintendo product views are 1 billion. They would make around 1.3 to 1.6 million in revenue.
We know that the fear of uploading Nintendo content is reducing the number of videos. Let's just see what a 20% reduction would do. They will bring in 1 to 1.3 million in revenue now, because the views have dropped. But to keep the same exposure, they would need to now buy 200 million views to compensate. Those 200 million views, at $8 CPM, will cost them $1.6 million dollars. They made an optimistic 1.3 million, but are now $300,000 in the hole (every month), all because they decided they wanted a piece of the pie and have to pay YouTube for the privilege of scaring off some of their audience.
Now, you'll note that my numbers are made up. I don't have any sources other than $8 being a pretty accepted average CPM and 45% being the YouTube cut. But I don't need solid numbers because this kind of proportional math works at all levels to show that all it takes is a 20% drop in video exposure, to make this a stupid idea. If you want to play with the numbers, you'll find that the equilibrium point will occur somewhere around a 15% drop in video exposure (conveniently right around the 16.5% of gross revenue that Nintendo takes with their 30% net revenue share). And by equilibrium, I mean that the revenue generated can precisely pay for the lost views in the form of ads. And none of that takes into account the idea that organic content made by passionate fans is much more well received than advertisements.
TL;DR In order for Nintendo to come out ahead in profit on this program, they need their total viewership across all of YouTube to drop less than 15% due to channels avoiding Nintendo content. I think this is unlikely.
And now I think I need to script this into a Feature Creep episode.[DOUBLEPOST=1423168467,1423160777][/DOUBLEPOST]I made one error in my post. I didn't account for un-monetized views in the ad revenue generation. So given that 50% monetization rate is a pretty solid guesstimate, it just makes the whole story even worse by cutting the revenue generation in half. This puts the viewership drop equilibrium at about 9%. If they drop 9% viewership, they can break even by purchasing ads with the revenue they take from content creators.
