Here’s why you’re about to see a lot more ads
YouTube, much like Google, is a permanent fixture in our vocabulary. Everyone knows how to look up a video on the internet — you YouTube it.
The interesting part is that only a fraction of users understand the business model, content production environment, and culture on the platform. And why would the average user care, right? They don’t create content on, profit from, or engage in business with YouTube — they just watch their favorite creators’ seemingly unlimited amount of content.
But with all that content comes ads and creator rights — and here is why you’re going to start seeing more of the former and less of the latter.
The YouTube Partner Program
So let’s back up a little bit, and blaze through the requirements for making money on YouTube, then we’ll talk about what just changed.
The low-down is that you need 1,000 subscribers and 4,000 hours (in the last 12 months) to enroll in the partner program. Once you’re in, you can link up your AdSense account and start runnings ads on YouTube — YouTube pays you depending on the following.
- Watch time
The CPM, or earnings per 1,000 views you get, will depend on those three factors and range between 80 cents to a whopping $15. The average user will see between $3–6, or so it seems from countless videos on the topic.
Now, you probably knew all that, but if you’re an inquisitive social media rascal like me, you’ve got a few questions.
Ads: Google’s Cut and How That’s Changing
Google/YouTube splits those earnings with the creator, they take 45%, and the creator gets 55%. And you know what? That’s fair. It’s a great platform, terrific business, and it’s rarely ever worth building your own video infrastructure to host your videos.
But with the new terms of service, creators smell something fishy.
On November 18, 2020, thousands of creators received an email outline of the new terms of service. Essentially, it said one thing.
“YouTube’s right to monetize: YouTube has the right to monetize all content on the platform and ads may appear on videos from channels not in the YouTube Partner Program.”
Google is saying two things here:
- We’re not going to allow you to make money if your stats are under a certain amount, but we are, in fact, we’re taking the full cut.
- If you choose not to display ads on your videos to keep the quality at a higher standard, we will, and we’ll take the full cut.
These new terms obviously set off alarms.
Reddit was the first place where the discussion started, specifically in the ASMR subreddit. ASMR consists of long videos where a creator usually performs some meditation, whispering, or quiet relaxation content, where mid-roll ads can be intrusive.
With many creators opting for other forms of monetization and no ads, and the droves of creators that haven’t crossed the threshold to monetize, this started to feel like a money grab.
And you might be thinking, they’re tiny creators bringing in a fraction of the views that others bring in; why does this matter?
Good question and the answer is the long-tail.
YouTube’s Long-Tail: How They Make Money
Let’s talk about Amazon for a quick second. Amazon has thousands of authors selling eBooks on its platform. Although making large sums for themselves, the top authors don’t really make Amazon’s profits.
The long-tail, the thousands and thousands of authors who are barely scraping by, all pooled together — that’s where Amazon makes their money.
I’ve talked about this in a different article, but essentially, every successful content platform is the same: YouTube, most of all.
YouTube has 31 million channels and 5 billion videos watched per day. New estimates from the sources below now say 37 million. That is a massive long-tail, and if the math is correct, and it is, YouTube will make most of their money from the smaller creators.
22,000,000 channels are under 1,000 subscribers. That’s 22 million content machines that aren’t being monetized by YouTube.
YouTube only monetizes videos from 1,000 subscribers or more, so it’s long-tail gets cut short. So why not let everyone monetize, right? After all, it would be advantageous to everyone.
See, this is where it gets scandalous.
YouTube’s Advertising Scandal
The whole reason why YouTube implemented the partner program thresholds back in 2018 was in response to the scrutiny of the mass election meddling in 2016 and advertiser concerns for ads showing up on controversial videos.
But even with annual revenue between $16 billion and $25 billion, they took a cut to ease advertiser concerns. Now fast-forward to the end of 2020, it seems like YouTube wants to have their cake and eat it too.
With the whole reasoning for the thresholds being cited as protecting advertisers long-forgotten by the public, YouTube wants to tap into that long-tail of 22 million users and monetize without consent.
“Since you’re not currently in YPP [YouTube Partner Program], you won’t receive a share of the revenue from these ads .”— YouTube Terms of Service, October, 2020
YouTube is essentially giving itself a free pass to monetize, in full, the first 4,000 hours, at a minimum, of a creator’s content. A creator’s video could go viral, hit 10–20 thousand or more hours in watch-time, but without those 1,000 subscribers, they wouldn’t see a dime.
Absolutely appalling practices from a company that has long positioned itself as a creator-focused player.
Why This Matters to You
There’s now the written confirmation, a right by YouTube to put an ad on every single video on the platform. Not only does this come in the way of creators who are all about shipping quality content, but it also reaps the efforts of millions of small creators without paying a dime.
If you’re a creator, on any platform, in any medium, this is your fight too. It’s personal. Creators like you should be paid for their efforts.
If YouTube puts in thresholds to protect democracy and retain advertisers, that’s completely fine. But evidently, those concerns are no more. And if they’ve skirted those concerns and are looking to run ads on smaller channels again, they should pay the creators for it.
The fact that they’re forcing ads on creators is a whole other issue.
The more that consumers and creators are aware of these enormous companies and their business practices, the stronger the creator community becomes and the better the content.