YouTube Is Failing Miserably.

Current State of Affairs

Revenues are falling for many YouTubers, largely due to the increasing popularity of ad blocking. Those who used to be able to rely on ad revenue as the sole source of income are desperate to find new ways to keep YouTube their full-time occupation.

Patreon

PatrickJMT is a popular YouTube math tutor. Every high school or university math student has probably watched a video of his.

Due to falling revenues, he has appealed to his viewers to support him with monthly donations through a service called Patreon so he can afford to continue doing YouTube full time. The more you donate, the more perks you receive, though it costs a hefty $200/month contribution just to potentially get personalized content.

Patrick’s channel has:

• 147 million views
• ~500,000 subscribers and
• 1,874 videos

6 months after his appeal, he’s only earning an extra $800 per month through Patreon. There is no way that is the best he can do with a channel of that magnitude and quality.

Leverage

Tutorials are a popular category of videos on YouTube. It’s also one of those categories where ads aren’t the best way for the creator to make money.

Think of a math tutorial channel with an average of 10K viewers/video. That might earn the creator around a measly $20. But with 10,000 people who find the videos useful, it’s not hard to believe that the teacher could charge $30/half-hour for a one-on-one session and have a constant stream of clients. More than enough to pursue it full-time and choose their hours. Or host a small live session with a cap of say 10 people and help them with their specific sticking points for an entry fee. The same goes for other types of tutorials, like makeup which is massive.

This is why I say there should be 1000x more people earning a living through YouTube. There is a massive amount of people making awesome content in the purgatory between 0 and 1 Million subscribers (which itself doesn’t guarantee you’ll make a living, either). All of these creators could charge a premium for personal interactions and make enough to quit their day jobs.

Google Helpouts, an expert on-demand video service that was shutdown in April 2015, probably would’ve been a massive success if it were integrated with YouTube.

Ideally, the progression of a channel should be:

• Few subscribers, spending part-time making videos
• Enough viewers to have a stream of people paying for personalized interactions and pursue YouTube full time
• Lots of subscribers, less of a need to offer extremely personalized interactions. Can rely on ad revenue and other sources of income (merchandise if applicable, sponsorships etc.)

Vessel

Vessel is a site where fans subscribe to their favourite YouTubers for $2.99/month for early access to their videos on the platform, 72-hours before they’re published on YouTube for free. This proves that fans are in fact willing to pay for extra perks.

YouTube star Anna Akana says she’s “making 20 times more with Vessel for doing the same amount of work, if not less, than with YouTube”. It’s not surprising that the service has tons of big names onboard.

YouTube should always be looking to maximize revenue for its creators without detracting from the free experience. The idea of a paid subscription for early access is one that should’ve been implemented long before Vessel was created.

What Next?

It’s clear that there are still plenty of ways to monetize online video that have yet to be discovered. As more companies like Facebook and Twitter push their way into online video and new companies like Vessel emerge, YouTube is left with no choice but to find more ways for creators to monetize their channel or be unseated as the King of Online Video. Companies like Twitch that provide interesting perks for paying subscribers should be looked at for inspiration.

It won’t be easy, but big changes need to be made. More experiments need to be conducted.

YouTubers are tired of putting in a full-time effort to earn a part-time income, fans are willing to pay for perks. Whoever makes another community with awesome content, solves the problem of YouTube’s terrible comments, and provides innovative ways to monetize channels will rapidly take over before YouTube can react. This threat should be taken extremely seriously before it’s too late.