YouTubers Losing Revenue as Advertisers Ditch the Platform

Vik Yabannavar/Ultralink

The internet is a wonderful, terrifying place, where anyone can and will speak there mind. Since it’s inception the web has remained a safe haven for hate speech, supremacy and political and religious extremism. It should come as no surprise that with somewhere near 300 hours of video uploaded to YouTube every minute, the media giant would have its fair share of undesirable content.

While the company has tried to mitigate the influx of hateful content creators to their site with programs like YouTube Heroes, which was intended to let the average user flag offensive videos to bring them to the staff’s attention, all attempts at stemming the flow have been thus far unsuccessful.

Recently, however, YouTube has sent a clear message to its funders and creators alike, by proudly stating it was going to maybe try to change some things in a move which not only threatened to put many of its top channels out of business, but failed to quell the concerns of the advertising firms which have been steadily abandoning them.

This comes as a direct result of YouTube’s update to the AdSense program which serves the dual purpose of targeting viewers with specific ads, and paying the YouTubers, giving roughly 50% of the revenue back to the channel the ad played on.

It all seems well and good, generous even, so why the recent controversy?

Since as early as 2012, brands like L’Oréal and Coca-Cola have been complaining about what content their commercials appear in front of. YouTube developed the AdSense program under the guidance of Google’s AdX veterans to create an advertisement friendly website, meant to target users with custom tailored content and to remove any ads from videos that could be deemed controversial.

In March tensions finally boiled over as more than fifty major companies, including big names like AT&T, Pepsi-Co and General Motors officially declared they’d be dumping the site until YouTube had improved their image.

“Google is responsible for ensuring the high standards applied to government advertising are adhered to and that adverts do not appear alongside inappropriate content,” said a spokeswoman of the British government on behalf of the Incorporated Society of British Advertisers. “We have placed a temporary restriction on our YouTube advertising, pending reassurances from Google that government messages can be delivered in a safe and appropriate way.”

The staff at the YouTube headquarters in San Bruno, CA has worked tirelessly over the past five years to create an automated system that scans video metadata looking for controversial trigger words. This process, which is part of their AdSense program, was devised in response to advertisers who felt YouTube and its parent company, Google, weren’t doing enough to ensure an attractive platform for their brands.

Suffice to say when the boycotts started rolling in, the staff was none too pleased. In response, Philipp Schindler, Chief Business Officer for Google said in a newsletter:

“We have a responsibility to protect this vibrant, creative world — from emerging creators to established publishers — even when we don’t always agree with the views being expressed.

But we also have a responsibility to our advertisers who help these publishers and creators thrive. We have strict policies that define where Google ads should appear, and in the vast majority of cases, our policies and tools work as intended. But at times we don’t get it right.”

With this, AdSense was refined and updated and several new creator friendly features were introduced into the system, including one that notified a channel when one of its videos had been demonetized. This, along with a new, stricter screening program caused dozens of YouTubers to cry foul to fans, claiming that they were making a fraction of what they had been.

“Out of our last eight videos we’ve had only one that’s been normally, (air quotes) ‘normally’ monetized,” said Israeli-American creator Ethan Klein, of sketch-comedy channel h3h3 Productions. He goes on to describe the reasons YouTube gave for demonetizing on of their videos Daddy of Five ft. Steve-O.

“One of the notes we were given was ‘peeing’. We did an obviously fake peeing moment and that was apparently too controversial for brands to run on.” Klein clarified that it was “a little sprinkle of water for comedic effect.”

h3h3 are not the only ones to feel the burn of YouTube’s automated process. YouTube mega star Felix Kjellberg, better known as PewDiePie, did a segment on his channel where he tried to access his channel through restricted mode, a service which goes a step farther than AdSense to filter out anything it deems as not strictly kid friendly and found that the only video left on his channel was one he did on bootleg Frozen games.

“The Elsa one is okay?! It has breastfeeding in it! Frozen Elsa titty is okay, I repeat Frozen Elsa titty is okay. That’s going to be all my content from now on. Thanks YouTube.”

Kjellberg among others has complained of a substantial loss of income due to the new demonetization of videos, with most channels who have come out about the process experiencing a loss of around 20-35% and some of the more infamous channels like Filthy Frank reportedly suffering near total losses.

Though it might seem far fetched, as it turns out, YouTube pays pretty well. That 50% of ad revenue goes a long way for content creators with a steady stream of views. It’s hard to make a rough estimate of how much a channel makes since Google keeps any data about the earnings its creators make under strict lock and key, and the general consensus among creators is to keep quiet about their paychecks or chance backlash.

Even with all the secrecy, some past leaks give us a small insight into the way money is passed around. In 2015, hacking group OurMine launched an attack on Markiplier, posting his income for the month on an online forum where it went viral. That November his channel garnered somewhere around 185 million views, with a concrete earning of $665,820.16 for that month. In case you were curious, that’s about $0.36 for every 100 views, and a very comfortable living.

YouTuber Vexxed, a gossip channel with a modest subscriber count of posted a video about his earnings over a month with analytics which looked something like this:

A small sample, sure, but from here we can see that he’s making about $0.26 on every 100 views, which doesn’t seem unreasonable for a smaller channel with lower watch times. It’s important to remember the only reason even this much information is public is because Vexxed is a channel that invites controversy, and isn’t afraid to take on YouTube or his viewers.

So if creators are paid this handsomely anyways, what’s the harm in losing a little income?

YouTube seems to routinely forget that the platform it has provided has allowed not only for artists to grow, but for businesses to begin as well. In order to produce a steady stream of videos to keep their viewers interested, creators often employ full time staffs, meaning everyone from editors to cameramen to office space will need to be accommodated for in a monthly budget.

YouTube has created an empire for itself, comprised of hundreds of thousands of individuals, all of whom are entirely subject to whatever tumultuous changes it makes to the site. This has prompted some creators to turn to alternative revenue methods. Fan sourcing is particularly popular, with Patreon serving as the go-to for many.

Some have begun diversifying into other fields beyond video creation. Let’s play channel The Game Grumps have begun their third season of touring with their improv comedy show, Game Grumps Live, which sells out quickly and nets them a comfortable profit. Ethan Klein of the aforementioned h3h3 has begun trying his hand at stand up. Matthew Patrick of Game Theory now offers his services as a well respected business consultant for other YouTube creators, as well as signing on for a YouTube Red show.

Though YouTube has provided creators with a means to re-monetize incorrectly flagged videos, this recent scare acted as a wake up call for many. The Internet Creators Guild has been quick to point out that the ad blocking of many of these videos began as early as 2012, so it’s likely that the revenue loss simply went unnoticed until the recent system restructure which now clearly displays notifications.

Either way, it’s clear that the platform is going to continue to bend to the will of the hand that feeds it, meaning that creators will either have to adapt to the new policies, or flock elsewhere. Though the system may not be perfect, hopefully the staff at Google can find a way to make everyone happy, otherwise we might see a new online video giant as early as 2020. For now, many are hopeful that all the controversy will end in something less than a total cession of entropy for YouTube.