John is an experienced freelance content writer with an eclectic employment history.
Since its inception in 2005, YouTube has made a lot of people very wealthy—some have even become millionaires. One of the remarkable things about the growing number of people who make thousands of dollars per month on YouTube is that many of them would likely not have been able to achieve that same degree of success on any other platform. Sure, you can look at someone like Dodie Clarke and think, “she’s very talented; she would have found a way to do this without YouTube,” but could you really say the same for someone like PewDiePie?
Despite all the wealth that YouTube has been able to generate for its users, it is often maligned as an unreliable source of income. Ask some of the most financially successful YouTubers for advice on making a living, and they will likely tell you to find ways other than YouTube’s built-in methods to monetise your content. So, why is that? First, we need to understand how YouTube’s core monetisation works—on the surface, at least.
How Does YouTube Monetise Videos?
YouTube earns money by displaying advertisements before, after, during, and beside videos. The amount of money they make depends on things like how valuable the content is to advertisers, how much of the ad viewers watch, whether users click on ads, and how many ads can be displayed around a single video.
For eligible videos, YouTube shares this ad revenue with the creator, which is the way many YouTubers earn whatever it is that they earn from their channel. This is known as the YouTube Partner Programme, and it is this method that experienced YouTubers often warn against relying on.
What’s the Problem With the YouTube Partner Programme?
YouTube is a private company, and, for the most part, they can do pretty much whatever they want when it comes to their own policies. If you don’t like it, go to another platform. Of course, the practical reality is that there aren’t really other platforms when it comes to doing what YouTube does—at least, not platforms that offer the same traffic potential as YouTube.
The unfortunate side effect is that when YouTube decides to change things (sometimes without warning), it’s the content creators that suffer, and this is where the unreliability comes in since YouTube is always changing things. So, what do they change most often?
One of the main causes for concern is the algorithm, and it’s one that content creators of all kinds are familiar with. Writers suffer from changes to Google’s search engine algorithm, musicians suffer from changes to Spotify’s music algorithm, and YouTubers suffer when YouTube makes changes to their recommendation algorithm.
Suddenly, all those things you were doing that ticked all the unseen mystical boxes for YouTube’s recommendations are wrong, and you find your views and new subscriber numbers dropping off a cliff.
The world has become very polarised in recent years, and companies are increasingly reluctant to be associated with certain types of content for fear of the social backlash they might receive. This, in turn, has led to YouTube drastically limiting what kinds of content can be monetised and giving advertisers the option to say no to having their ads shown alongside certain types of content.
Family-friendly content (but not for children—more on that below) should be fine, but if you’re talking about anything remotely controversial, saying certain words, or even if you just happen to upset the wrong people who go on to abuse YouTube’s flag system, you could find yourself demonetised.
Granted, changes to the law affect YouTubers less frequently than algorithm changes and advertising trends, but it has happened. Notably, the COPPA child-protection laws forced YouTube to essentially stop advertising on videos made for children.
There is a lot of nuance to this, but in an oversimplified fashion, YouTube is not allowed to collect data on children, which makes them unappealing to advertisers since the whole point of online advertising (to them) is making use of all that lovely personal data to target laser-focused ads. Unfortunately, no ads, no money.
How Is YouTube Fixing This?
Now, understand that this is my hypothesising rather than official information, but it looks as though YouTube is aiming to dramatically reduce the reliance on advertisers for monetisation.
They have brought in things like Super Chat, through live-stream viewers can pay to get a message pinned to the top of the chat. They have introduced Memberships, through which viewers can pay a monthly fee for special perks and exclusive content. They have introduced merchandise options, and I don’t doubt there will be more in the fullness of time.
The key thing here is that none of this money relies on advertisers. If your content is controversial or problematic (as long as it’s not actually illegal), it won’t matter to your Members because they have subscribed to you for that content. And, of course, YouTube gets their cut of that money.
I can’t say for certain what YouTube’s priorities are regarding monetisation. It could be that all of these changes are just attempts to keep up with the competition like Twitch and Vimeo. That being said, advertising is a volatile revenue source for YouTube as well, and I have to believe they would rather not be reliant on it as their main revenue stream if they have other options.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2021 John Bullock