Ranking in as the second most visited website in the worldsecond most visited website in the world (right behind its parent company Google), Youtube is one of the most influential websites in the world. Over 300 hours of videos are uploaded onto Youtube every minute and over 3.25 billion hours of video is watched on Youtube monthly. Since its start on Valentines of 2005, Youtube has been pushing the envelope of delivering mainstream entertainment in a non-conventional method (at the time). The website has been increasing its revenue since its formation and is paying its content creators, “Youtubers” a premium as high as seven figure salaries. How does Youtube manage to pay all of its content creators while still driving up profits? Here’s a timeline of Youtube monetization:
August 2006 – Participatory video ads and brand specific channels introduced
August 2007 – InVideo Ads introduced
December 2007 – Youtube Partner Program launched (salaried Youtubers)
March 2008 – Youtube analytics tool launched
October 2008 – Click-to-buy e-commerce platform launched
November 2008 – promoted videos launched
November 2008 – pre-roll ads launched
January 2009 – homepage ads go from 1 to 7 formats
August 2009 – Individual video partnerships launch
November 2009 – skippable pre-rolls launch
December 2009 – video targeting launched
March 2010 – Youtube mobile ads launched
(SOURCE: Youtube 5 Year)
Youtube has found a way to monetize on a free content service and has set the precedent on how many video streaming services make money. However, the history of how Youtubers monetize their videos was intentionally left out of the timeline. The timeline progression of Youtuber monetization and partnership has been pivotal in shaping the content that is being produced at the time.
The first type of Youtuber monetization was through AdSense and the number of views. Today, AdSense is still used for revenue but Youtube has moved away from the total number of views as an adequate method to pay Youtubers. The number of views for a video was very easy to abuse in multiple ways. The first way was “clickbait”, where a ridiculous title or provocative thumbnail was posted on the video to pique the viewers interest. One Youtuber had provocative picture on everyone one of her uploads while the actual video was nothing but blank (cannot link due to not safe for work nature) and made up to 8,000 dollars a month. The next way was the use of viewbots and 5 star bots. Viewbots were cheaper than the money made from the increased view count until Youtube began checking for viewbots (this is why old Youtube videos were stuck at 301+ views for a day). Five star bots were bots who would rate the video in order to increase the popularity and visibility of the video. Every video on the front page of Youtube would do substantially better just due to the exposure.
Following these reoccurring problems, Youtube switched to a viewing time based monetization, AdSense revenue, and subscriber monetization. Youtubers would make money based on how long a video has been watched for instead of click counts. On the surface, this seems like a good way to combat click baiters but it has had one of the biggest impacts on the content produced by Youtubers. Many high production videos and animated videos are less than 10 minutes long but take exponentially longer to make than multiple other types of videos. However, under the new monetization policies, the short, high quality videos would struggle to make a sustainable living. Many Youtubers talked about the detriment of this policy and a Youtuber by the name of “RubberNinja” explains it clearly. Today, Youtube videos consist of video game playthroughs, toy review videos, and vlogs. These types of videos can easily generate footage and take a substantially less amount of time to edit. For many gaming and review channels, uploading 3 to 4 videos is not unusual compared to an animator who would upload a video every two weeks with only 1/4 of the time length. With the newer generation incoming with iPads and iPhones, the new demographic of viewers under 13 years exponentially increase the success and popularity of gaming and toy review channels. Personally, my brother only watches these types of channels like “Evantube” and “Pewdiepie”.
Today, Youtube has finally moved into the realm of paid subscription with its new service, “Youtube Red”. Youtube Red provides subscribers exclusive content from their favorite Youtubers with no advertisements. Youtube is directly challenging streaming platforms like Netflix and Hulu by creating a replacement for cable with completely new content (Netflix has original shows House of Cards and Stranger Things). However, many wonder today if Youtube Red is really a success or just a fad. Currently, Youtube Red does not provide enough content for people to stay subscribed long term. The only benefit of Youtube Red past its content is its ad free videos and the ability to lock your phone on the Youtube mobile app (there are ways to get around it anyways).
Personally, I think if Youtube wants to fight against titans like Netflix they will need to fix their monetization structure to reward high quality videos without making people subscribe. Youtube’s freemium model and the ease of access for video creators is its strong suit, so alienating some of its content creators to benefit a niche community (vlogs, gameplay, etc) is not sustainable. Youtube doesn’t need to create full seasons of shows, but it needs to be more about the high quality content and less about the memes.