YouTube Revenue Is Down — Here’s How Creators Can Adapt
COVID-19 has led to an explosion in content consumption, on top of the massive, world-altering explosion that was already taking place.
People stuck at home in quarantine (and often without work) tend to pass the time by consuming content. Streaming is up across the board, for music, TV, and YouTube videos.
My own YouTube channel is perfectly positioned for this, on paper anyway. I cover home automation and other home-oriented tech products. Two of the only things you can do right now are purchase tech products online, and do projects in your home. So you’d think my channel would be doing great.
And again, on paper, it is. In March of 2020 — the month that coronavirus lockdowns began in earnest — my views skyrocketed by almost 30%. The increase was so dramatic that Google popped up a little “Congrats, your traffic is way up.” message in my creator studio app.
My top videos over the last month include ones about Fitbit trackers, setting up home WiFi, and the like. All of these are probably a response to the lockdowns--people are trying to create an at-home exercise routine now that gyms are closed, set up their WiFi for better bandwidth to accommodate working from home, etc.
There’s a catch, though — and it’s a big one. Despite this big boost in traffic, my revenue is down. Way down.
My March revenue was down about 20% versus revenue in February, despite March having more days and my channel picking up more views due to the lockdown-related explosion in content streaming.
What’s going on? And how can creators adapt to these changes? Let’s dig in and learn more.
You’re Not Alone
If you’re a YouTube creator and you’ve seen a big drop in your revenue lately, know this: you’re not alone.
According to a recent article in OneZero, many YouTubers have seen drops of 30% to 50% in their CPMs, and some have seen their CPMs reduced from $12 to as little as $4. This drop in the value of each view means that even though views are up, overall revenue is still declining for many YouTube creators.
My own CPM has decreased from around $13 at the start of the year to just $8 in April. That’s a drop of 38%, in line with the estimates OneZero provides for other creators.
What’s going on? Is Big Bad Google siphoning off funds and profiting from the traffic increase?
Likely not. It appears that the reason for the drop in revenue is a huge drop in advertising spending on the platform. As OneZero reports, many companies have paused their YouTube campaigns amid an uncertain economy, some until the end of the year. Since YouTube pays 55% of ad revenue to creators, this drop in demand for ads is tanking our earnings.
In all likelihood, the drops are uneven. I probably have it pretty good, since many of the topics I cover relate to projects in the home, and tech which would be even more useful during a lockdown. Even in a pandemic, companies still want to sell products to my audience, so they’re still buying ads.
But for creators who cover the travel industry, food, or topics like cosmetics, the decline is probably even more intense. And these industries may take even longer to recover, leading to depressed earnings for months or more.
AI Run Amok
There’s another factor weighing on revenue, too. As I’ve reported before, up to 10% of my videos get flagged by Google’s AI for having inappropriate content. Usually, this is something totally innocent, like using the word “trigger" to talk about my Dyson vacuum, making Google think I’m talking about firearms.
Usually, these mistakes are easily cleared up by requesting a human review. I’ve never had a restriction remain after a review--Google’s humans have always corrected the AI’s error and allowed my videos to be monetized.
But with Google’s team swamped and dispersed by COVID-19, there are barely any humans left for Manual reviews. That means Google is relying almost entirely on its AI to review videos, at least for now.
That creates a lot of risk for creators. If I invest the time in making 10 videos, and one of them gets flagged by the AI, I’m losing out on 10% of my earning potential, possibly for months. Or possibly forever, if Google chooses never to go through its backlog of flagged videos and review them manually. It makes it harder to justify creating new videos since their earnings potential is uncertain.
How Creators Can Adapt and Thrive
So what are YouTube creators to do? In the short term, we’ll likely have to try our best to weather an environment with much lower earnings — as many in other industries have done. Some creators--especially those with high overhead costs or reliance on location-based shoots--will be forced to walk away from their channels or to sell their channels outright.
But there is one glimmer of long term hope. With people stuck at home and desperately seeking content to consume, my subscriber counts have skyrocketed. They’re up almost 100% month over month since the lockdowns began, and my rate of subscriber growth is actually continuing to increase.
I suspect that other channels are experiencing the same thing. As watch time is up--and people who never tried YouTube before or rarely used it surge onto the platform amid COVID--whole new audiences are becoming available to creators.
In the short term, we have limited opportunities to monetize those new audiences. Ad revenue is down, and sponsorship money (which usually comes with a large subscriber count) is likely down as well.
For the creators who can weather the storm, though, we can likely emerge from the crisis with a greatly expanded audience of followers. And the world may become more and more used to using YouTube for content, especially as scripted and reality television has largely stopped worldwide during COVID-19.
Those audiences hold the promise of monetization down the line, especially as COVID-19 hopefully abates, and the advertisers and sponsors hopefully return.
So if you’re a YouTube creator, expect some pain in the short (and maybe even mid) term. But don’t miss out on the opportunity to grow your audience despite the crisis, putting yourself in position to emerge stronger down the line.
For now, try to focus on subscriber growth instead of revenue growth as your main metric (hard, I know, if you’re relying on your channel’s income to pay the bills, or as the main marketing strategy for your brand.)
This would also be an ideal time to focus on cutting your costs and lowering the cost of making each video. More than ever, audiences are tolerating (or even expecting) lower production values across their content channels. When Jimmy Fallon can shoot a network talk show in his living room on an iPhone (and put it on Youtube, by the way) you can almost certainly create new videos without investing a lot into your production costs.
If you can, too, it’s helpful to think of ways to give back. Can you promote mask donation or another important cause on your channel? Can you share tips to help get parents or kids through the pandemic?
I’m looking into videos about hydroponic pandemic gardening, tech for working from home, 3D printing PPE, and other helpful content for my channel. Other creators have made similar pivots, including one of my clients, who pivoted from nutrition videos to emergency videos about how to create a home garden and grow food during a COVID-19 lockdown.
Sometimes, a challenging situation can breed a lot of new creativity. Is there a new type of video you’ve been meaning to try out? A new direction you’ve thought about taking for your channel? Or perhaps a longer-term project you’d like to do (and document), but have never had time to implement? Now might be the perfect time to embark on these experiments, and to create new videos documenting your longer-term endeavors.
It’s also the perfect time to start a new YouTube channel. The boost in traffic and the world’s need for new content is driving a ton of watch time and subscribing. With a new channel, you can’t monetize through ads until you reach 1,000 subscribers and a watch time threshold anyway. That makes it hard to justify starting a new, experimental channel under normal circumstances since you’ll know that you won’t be able to monetize it for a while.
But since revenue is down overall, the opportunity costs for starting and growing a new channel are much lower. And the massive increase in content viewing means you can likely get to the subscriber and watch time thresholds for monetization much faster.
New content is a priority, too, since people are watching so many videos that they’re likely to make it through all the old content is your niche fairly quickly. So creating a new channel — and filling it with new videos — is a perfect move at the moment, since it puts new content in front of viewers who are starved for something new in your niche. Once you reach your thresholds, you can always monetize your channel down the line, when the advertisers hopefully return.
A loss of revenue is a challenge for anyone, especially creators who often don’t have the safety net of unemployment or other assistance. But even if earnings are down, for now, we as creators can focus on “investing" in a larger audience, new content directions, or even entire new channels. This will help us to make it through the current crisis creatively, and if we can hold out for a while, it may lay the groundwork for new opportunities in a better future.