Welcome! I'm Simon Owens and this is my media industry newsletter. If you've received it, then you either subscribed or someone forwarded it to you.

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What to make of the paltry payouts from YouTube Shorts

Longtime readers of this newsletter know I’ve been highly critical of the “creator fund” systems erected by platforms like TikTok and Instagram. Like Hank Green, I consider these funds to be completely arbitrary in how they distribute money to creators. I also think the funds undervalue those creators’ contributions to each platform’s bottom line.

That’s why I’ve been so bullish on YouTube Shorts. While it did start out with its own creator fund, its creators could at least monetize their audience more effectively by expanding into longform video. A typical journey would start with a creator producing lots of short videos and then gradually transitioning into the longer content that benefits from YouTube’s revenue sharing. No such pathway exists for TikTok or Instagram creators — hence why so many of them try to migrate their audiences onto YouTube.

Then last month YouTube launched a true revenue sharing model for Shorts. While its methodology for distributing funds is kind of complicated — it involves setting aside a specific amount for music rights holders — the company is basically sharing 45% of all revenue generated through YouTube Shorts ads. In my opinion, this positioned YouTube to dominate in shortform video.

It’s only been a month since this new program launched, but Business Insider checked in with several popular creators to see how it’s impacted their bottom line. While a few generated decent revenue from Shorts — several earned in the low five figures — their RPMs were pretty pathetic. Not a single creator earned more than $0.06 per thousand streams. At least one person told Insider that the revenue generated wasn’t worth the time investment:

"Shorts are really great for exposure and reaching a wider audience, but they take time to make and edit like long videos," she said. "Because this is my full-time job, I need to be creating content that both inspires and excites me and provides a solid return on investment. Creating short-form content isn't something I'm passionate enough about to dedicate the time it takes."

So is this a bad sign for the future of YouTube Shorts and its ability to attract top talent away from TikTok and Instagram? 

I don’t think so. This is a brand new ad format for YouTube, and marketers are historically slow in adopting new formats. Even the largest brands only set aside a tiny portion of their marketing budgets for experimental ad buys, and it’s only after they’ve seen clear ROI that they begin ramping up their spending.

Look at the history of any successful ad product — whether it’s Facebook’s promoted posts, Instagram Stories ads, Google AdWords, or even YouTube’s own midroll ads — and you’ll see a gradual learning curve as brands got to understand the format. I have little doubt that YouTube Shorts ads will one day be hugely successful — and that creators will also benefit from that success.

What do you think?

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How Jay Gilbert built his influential music industry newsletter

When it comes to disruption, few industries have experienced as much upheaval over the past 20 years as the music industry. The lucrative CD era ended with the rise of Napster piracy, and the introduction of Apple’s iTunes did little to stem the losses. It's only within the last decade, with the rise of streaming services like Spotify, that music revenue has begun to recover.

Jay Gilbert had a frontrow seat to all of this turmoil. Working for companies like Warner Music and Universal Music Group, he got to know just about every facet of the music-making process. Then in 2015, he struck off on his own and launched a consulting business. To help raise awareness of his services, he began writing a weekly newsletter called Your Morning Coffee. What started out as an email sent out to a few hundred friends eventually grew to 15,000 readers, and it’s now one of the most influential newsletters in the industry.

In my interview with Jay, we talked about how the newsletter found an audience, its contribution to his consulting business, and why he doesn’t want to scale it into a traditional media company.

Watch our interview in the video embedded below:

If video embeds don’t work in your inbox, you can find it over here. 

Maybe Lucy won’t pull the football away this time

The history of Meta is littered with examples of the company introducing a new product and then pivoting away the moment media outlets begin to heavily invest in it. First it was video, then it was live streaming, and most recently it was Instant Articles.

One of Meta’s many abandoned projects was Bulletin, a newsletter platform that was positioned as a Substack competitor. For the better part of a year Meta signed contracts with writers ranging from celebrities to local news journalists and paid them to produce regular content for Bulletin. Then in October it announced it was shutting Bulletin down completely.

But fear not, because Techcrunch reports that Meta-owned Whatsapp is working on a brand new content format…newsletters:

WhatsApp already offers individuals the ability to “broadcast” their messages to many people at once. It’s a game-changing feature that can allow you to have dialogues open with multiple people at once. It appears that the current thinking with the newsletter feature is to expand on this use case. WaBetaInfo, which has a stellar record of spotting forthcoming changes, says this newsletter feature “will be a one-to-many tool for broadcasting information.”

Publishers should absolutely invest in this new product and devote entire teams toward populating their Whatsapp newsletters with content. What could possibly go wrong?

Let's talk about how to build a successful ghostwriting business

One of the biggest misconceptions in media is that a byline denotes authorship. For every column or book you come across that’s been written by a high-powered executive or famous celebrity, there’s a good chance they employed a ghostwriter to help them.

In fact, ghostwriting can be an incredibly lucrative profession, paying many multiples of traditional journalism. But how do you break in and find clients, especially when you can’t brag about your past work?

That’s a question we’ll be answering in a live Zoom call this Thursday. Featured guests include:

• Jonathan Rick, a longtime communications consultant whose work has appeared in the New York Times, the Washington Post, and Time, along with business-oriented outlets like Fast Company, Forbes, and the Wall Street Journal

• Dan Gerstein, CEO of Gotham Ghostwriters

• Wayne Pollock, founder of Law Firm Editorial Service, a thought leadership ghostwriting service serving law firms and their partners.

• Matthew Rees, founder of Geonomica, an editorial consulting firm

• Pat McNees, author of multiple ghostwritten books

Want to join the call and ask them questions? You can find the login info over here.

Quick hits

An interesting experiment in subscription bundling: pairing a news product with a non-news product. [Digiday]

The newsletter Graydon Carter launched after leaving Vanity Fair now has 300,000 paid subscribers. [Axios]

"After long relying on ordinary users for content, social media companies are giving up on them. Regular people either post too infrequently, are too boring, or both. And now they’re being pushed aside." [Big Technology]

A deep dive into Vogue's China operations, which are incredibly important to the company given the country's massive footprint in the fashion industry. [NYT]

I can't imagine that this will move the needle much when it comes to driving subscriptions for Medium. [The Verge]

More and more VCs are finding ways to invest directly into individual creators. [Tubefilter]

Tortoise has built a really impressive podcast operation and figured out how to fund it with memberships. [Press Gazette]

Thought bubble: Why aren’t there newsletter ad agencies?

I wish there were newsletter ad agencies similar to how there are already podcast ad agencies and influencer marketing agencies. I would turn over my ad sales to them in a heartbeat.

I'm not talking about newsletter ad marketplaces like Swapstack and Paved. I'm talking about an actual agency with dedicated sales reps who are going out and finding advertisers for me.

On a related note: if you're an ad sales rep who sells ads on behalf of creators on a commission basis, definitely reach out.