Tarmack
Rhetorical Porcupine
When being contacted, or contacting a network, if you meet their requirements you are most likely to be offered a revenue share. I don’t believe any networks offer a fixed CPM anymore. And with a revenue share there are some important questions that you need to ask the recruiter so that you understand what you’re getting.
There are two kinds of Revenue Share. The first and least complicated is the Gross Revenue share. Second is the Net split which means there is a middleman somewhere along the way who is also getting paid. This is usually a parent network (MCN) above the sub-network that has made you an offer. We know that YouTube is going to take 45% of everyones earnings, so we can disregard that immediately. Whatever is left is the Gross earnings of the channel itself, ie the amount that is going to be split by the channel and the network. Let’s say that it’s $100, so the math is as simple as possible.
So let’s take the Gross Revenue Share through to completion. If you have a remaining Estimated earnings of $100 and were offered a 70/30 revenue share, you will keep $70 and the network will keep $30. Simple stuff.
Let’s take the same example, but make it a Net 90/10 split, but with the intermediary parent network taking a 25% cut first. So we start with $100 and the parent network takes $25 first. That leaves $75 to be split by you and your sub-network. In this example, 90% of the remaining $75 is $67.50 that you get to keep.
So, you can see now how a 70/30 split can actually be better than a 90/10 split, if the 70/30 is Gross and 90/10 is Net. But the 90/10 split sounds so much better when a recruiter sends that initial message.
ALWAYS read your contract, but also make sure you ask about this specifically. It isn’t peanuts in the long term.
There are two kinds of Revenue Share. The first and least complicated is the Gross Revenue share. Second is the Net split which means there is a middleman somewhere along the way who is also getting paid. This is usually a parent network (MCN) above the sub-network that has made you an offer. We know that YouTube is going to take 45% of everyones earnings, so we can disregard that immediately. Whatever is left is the Gross earnings of the channel itself, ie the amount that is going to be split by the channel and the network. Let’s say that it’s $100, so the math is as simple as possible.
So let’s take the Gross Revenue Share through to completion. If you have a remaining Estimated earnings of $100 and were offered a 70/30 revenue share, you will keep $70 and the network will keep $30. Simple stuff.
Let’s take the same example, but make it a Net 90/10 split, but with the intermediary parent network taking a 25% cut first. So we start with $100 and the parent network takes $25 first. That leaves $75 to be split by you and your sub-network. In this example, 90% of the remaining $75 is $67.50 that you get to keep.
So, you can see now how a 70/30 split can actually be better than a 90/10 split, if the 70/30 is Gross and 90/10 is Net. But the 90/10 split sounds so much better when a recruiter sends that initial message.
ALWAYS read your contract, but also make sure you ask about this specifically. It isn’t peanuts in the long term.
