YouTube creators sign AI licensing contracts to cash in on unused footage

The news: Creators on YouTube are selling their unused video footage to AI companies.

• OpenAI, Google, Moonvalley, and others are purchasing the content to train and improve AI models, per Bloomberg.
• Companies are paying between $1 and $4 per minute of footage, depending on quality and format.

Why sell random videos? YouTube creators may produce hours of footage that doesn’t make it into final cuts, and selling this unused content to AI companies offers a way to monetize their extra work.

• However, giving up footage of their faces or likenesses could make creators feel like their personal data is no longer their own.
• For some users, $1 per minute may not be enough incentive to watch their work and image absorbed by Sora and other video generators.

YouTube takes 45% of creators’ net revenues for ads shown or streamed on their public videos, and platform payouts account for only about 23.5% of social media creators’ revenue, per our forecast.

Working within bounds: YouTube doesn’t allow scraping of video transcripts or clips, though creators can sign individual licensing contracts with AI companies.

Google has used “some portion” of YouTube’s library to train its Gemini chatbot through individual contracts. Both companies are owned by Alphabet.

Shrinking pool: AI models may soon face scaling challenges due to the dwindling pool of high-quality data available for training. That could slow down timelines for model improvement in the future.

Creators’ unique, unpublished YouTube content could be a valuable resource for video generators from OpenAI, Meta, Adobe, and others.

Our take: As more creators start licensing their footage to AI companies, supply could outpace demand, making contracts less lucrative.

AI companies may also find more ways to make synthetic content, reducing the need for real-world footage. This could close the window of opportunity for creators to profit from these deals.

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