YouTubers make bank with back-catalog sales
Future. Taking a page from the unending investment in music catalogs, Spotter is buying out the rights to past videos from top YouTubers, giving them an influx of cash to grow their business. It shows that the influencer market has matured and that even an old video from MrBeast can become a valuable asset… and even giving creators a pathway to make fewer videos at a higher quality instead of constantly posting videos just to score more ad revenue.
Some top YouTubers are cashing in on their libraries.
- L.A.-based startup Spotter Inc. is paying upfront fees to creators for exclusive licensing rights to their back catalogs and the ad revenue that comes from them.
- That gives creators capital to expand their operations and gives Spotter a (hopefully) growing revenue stream.
- Spotter pays out large amounts of money (as much as $40 million) by projecting how much revenue a library will generate over the next three to five years by analyzing the past couple years’ earnings.
Spotter mostly focuses on creators who work in categories that “tend to be consistent and have staying power,” such as food, gaming, and videos for kids. It also tries to sign up multiple creators in a certain sub-topic (like Minecraft or BBQ) simultaneously.
Spotter has already paid around $350 million dollars to over 150 creators, including MrBeast and Dude Perfect. And the company has raised an additional $200 million to keep the payouts flowing.
But Spotter isn’t the only startup in the influencer-payout game. Jellysmack, which like Spotter, is backed by SoftBank, has positioned itself as an investor of Facebook and Snapchat creators. And Creative Juice is providing creators with banking tools that they wouldn’t be able to access otherwise from more traditional firms.