A Penny for Your Pageview?

Jacob Harper |

In 1995, the famed Hollywood scribe/luxurious hair-owner Joe Eszterhas was paid $2.5 million to write the film Jade. That film would go on to ring in less than $10 million in box office. Liberally assuming an $8 movie ticket, this meant that the producers of the film paid Joe $2 for every person who saw the film. This, of course, doesn’t even take into account the production costs, which if anyone is curious, totaled $50 million.

No one will argue that Joe got an exceptional deal, or that bombs don’t drop in Hollywood. What is interesting about this, and many of routinely high-paid Eszterhas’ projects, is how high “creatives” were paid for a time. While Hollywood scribes don’t quite get that kind of cash, and a standard script fee is roughly $100,000, it got us thinking: the overwhelming majority of young people consume their content online now, whether on a financial news website (ahem), or a streaming service like Spotify, or like Google Inc.'s (GOOG) video sharer YouTube. So, we wondered, if Hollywood in its heyday paid its writers $2 a viewer at its worst, what’s in it for the creatives on the web?

Short Answer: Around a Penny

We found despite the difference in written and listening mediums, a common rate for creatives seems to be about a penny a view. Or, in the case of music streaming services, a penny a listen.

Spotify pays in relation to total number of plays on their site – that is, if an artist receives two percent of all listens, they get two percent of the pay. Of course, the question still remains, how much is that?

A member of the indie band Parks and Gardens claimed on Twitter that they receive “$0.00966947678815 per stream,” or just under a penny. Cellist Zoe Keating reported she made $808 on 203,000 total streams from a variety of sites, with her Spotify plays garnering between half a penny and 99/100 of a penny a play.  

Writing for the web varies, but a penny per view seems, if not standard, at least widely accepted. Seeking Alpha writer Jorge Aura claims exactly that rate on his writer’s page. Content juggernaut Examiner.com also puts roughly that rate in its advertisements looking for writers. While upper-end sites obviously pay higher, or pay flat rates, a penny a view (or lower) is an accepted rate.

Longer Answer: Unless You’re on YouTube

YouTube is a trickier one to measure, as the rates for its official “partners” and the random monetized cat video differ. $25 per thousand, or a quarter a penny a view, was the rate for InVideo. But then, YouTubers get more or less depending on clickthrough rates, whether they’re a partner or a “network,” and what kind of ads they play.

But that $25 per thousand might actually be high, and the rate is much, much, much lower. While YouTube requires partners to stay mum on their pay, the rumored rate appears to be between 50 cents and $2.50 per thousand.

On the low end, that's a twentieth of a penny a view, or 400 times less a view than Joe Eszterhas got for Jade.

A View by Any other Name…

The main issue question is why views on YouTube garner so much less than writing or making music for consumption on the web. The answer, really, is volume. YouTube gets so much content they don't have to pay.

Advertisers care about eyeballs and earholes, specifically the number reached. A view is a listen is a read. It's all one person reached. But the biggest medium is also the most flooded. There's only one Joe Eszterhas, but there's literally millions of YouTubers, churning out content for free. There's simply no reason to pay more, even to the semi-pro YouTube partners.

After all, why buy the milk when you get the cat video for free?

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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