How YouTubers finance their videos

{"text":[[{"start":5.35,"text":"Travis Verkaik jumps off buildings for a living. As a business pitch to lenders, it may not be the easiest sell."}],[{"start":12.45,"text":"After studying media production at university in Bristol, Verkaik started making videos about the niche and thrilling sport of parkour."}],[{"start":20.95,"text":"He quickly learnt he could make enough money from social media. But “this was something I had to teach myself”, he says. “As much as I enjoyed my course, it didn’t teach me how to create capital directly from social media.”"}],[{"start":34.2,"text":"Setting up as an influencer is cheap as many video themselves at home with a smartphone. Creators starting out can also sometimes access grants through platforms such as YouTube."}],[{"start":45.5,"text":"But once they are generating a large enough online following, ambitious creators often require more working capital to fund better audiovisual equipment, studio space, managers and accountants. "}],[{"start":57.1,"text":"Mainstream banks and financial institutions have been wary of lending to content creators, given their often small-scale enterprises and the fact that cultivating viewers and a fan base can take time, sometimes many years. Lenders and investors usually want to see some evidence of success before they agree funding."}],[{"start":null,"text":""}],[{"start":74.85,"text":"“The problem for early-stage creators like Travis is it’s about staying alive. There is this funding gap for creators,” says his manager Matt Ramsden at IndyStudios."}],[{"start":85.6,"text":"But as influencers’ earnings climb — from shared advertising revenues and product brand sponsorships — they are becoming harder to ignore and more specialist lenders are stepping in."}],[{"start":97.25,"text":"“The financial community has begun to recognise creators as proper businesses,” says Ben Woods, head of creator economy at Enders Analysis."}],[{"start":105.95,"text":"One draw for lenders and investors is that they can see how much creators make on YouTube. The AdSense software enables financiers to track audience viewing data and advertising revenue. Specialist financiers may offer funding in exchange for a share of future earnings. They sometimes collect creators’ gross monthly revenue and send them the net income once financing fees are deducted."}],[{"start":130.45,"text":"Samuel Oiknine, managing partner at Sekura Asset Management, started lending to creators this year and expects to expand to $100mn in 2027. He estimates that two-thirds of Sekura’s creator financing goes to those on YouTube, while the other third is parcelled out to users of TikTok, Instagram and Twitch, a live-streaming platform owned by Amazon."}],[{"start":152.95,"text":"The opportunities are also attracting some of the world’s wealthiest people. Viewture, which is backed by the Agnelli family’s Lingotto Investment Management and billionaire sports entrepreneur David Blitzer, has lent between $12,000 and more than $10mn to around 50 content creators, including The Sidemen. Creator clients must have earnings of at least $3,000 a month."}],[{"start":179.89999999999998,"text":"“We can take a view, and look at creators with all sorts of experience,” says Jason Kingston-Brown, commercial executive director at Viewture."}],[{"start":null,"text":""}],[{"start":188.7,"text":"Sekura has a higher bar, targeting creators with $1mn in annual revenue. Oiknine used to limit financing to a maximum of $2mn but a new fund with Swiss fintech Copyright Capital will offer larger amounts to those who qualify. "}],[{"start":205.14999999999998,"text":"Not all creator financiers have such strict criteria. Michael Bizenov, managing partner of Sound Royalties, has focused on financing the music industry for more than a decade and recently moved into video. He lends to creators and channel owners who have been in YouTube’s partner programme for at least a year and make $3,000 a month or more on the video platform. “We try to be creative-friendly financing,” he says."}],[{"start":229.99999999999997,"text":"Creators often require funding when they start making more professionally produced longer videos — a form that has been driven by YouTube’s move on to smart TVs. Some top YouTube shows such as MrBeast, Sidemen and Pop the Balloon have moved on to better-funded streaming apps such as Amazon Prime and Netflix."}],[{"start":249.14999999999998,"text":"“The middle and upper market [creators] are no longer sole traders. They have large teams and also have diversified revenue streams,” notes Neil Waller, co-founder of the Whalar Group, an agency that connects brands to creators. “So all of a sudden [they] look like a small- or medium-sized company.” "}],[{"start":267.54999999999995,"text":"The most established creators are also starting to attract interest from private equity firms looking to get hold of significant back catalogues of content. “Some of these [more experienced] creators are starting to burn out and want to exit. Private equity wants to collect [rights to] older episodes and syndicate these,” adds Woods, of Enders Analysis."}],[{"start":289.49999999999994,"text":"Verkaik says his content is beginning to get some traction. A June YouTube video — chasing cheeses rolling down a steep hill in Gloucestershire — got 140,000 views. A short version received more than 5mn hits. He is hopeful of securing investor funding for a parkour YouTube channel. "}],[{"start":306.54999999999995,"text":"“The introduction to all these creator fund schemes has been a huge blessing for people like me,” he says. “It’s made a dream turn into a reality.”"}],[{"start":321.59999999999997,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792302016_5241.mp3"}