[This is an important post from Jonathan Lee (@telecomsense) that fills in some of the available data on just how much of YouTube is music and infers what that means for royalties.]
YouTube Is Primarily a Music Service
Given recent headlines criticizing YouTube’s algorithms for promoting home movies of pre-teens to pedophiles, violent videos to young children, as well as political extremism/bullying, you might have the idea that a lot of people watch these videos; they don’t. As this fascinating post–describing documents that surfaced in Viacom’s copyright suit against Google–explains, YouTube became popular not because of homemade videos, but because it embraced piracy.
[Editor Charlie sez: Hey Susan, do you like apples?]
Alphabet CFO Ruth Porat told investors during an earnings call on Monday afternoon that YouTube pays out a majority of that advertising revenue to its creators. Although Porat wouldn’t say how much of the $15 billion goes to its content makers, she did specify those payouts belong to YouTube’s “content acquisition” costs, which run around $8.5 billion.
For people trying to make their living on YouTube, many feel like they don’t see nearly enough of that $8.5 billion. Top creators tend to earn the most ad revenue via higher rates — as long as their content is advertiser-friendly — because they generate a large number of views. Other advertising revenue then trickles down to the thousands upon thousands of creators who belong to YouTube’s Partner Program.
Many personalities have said they feel like they have to fight for advertising revenue, turning to subscription services like Patreon and signing brand deals since ad revenue isn’t reliable. Now, in the wake of major changes to YouTube’s advertising policies when it comes to content aimed at children (which may include popular video genres like gaming), advertising revenue looks even more fraught.
YouTube has long enticed creators to work on its platform with advertising revenue, but most creators didn’t know how much YouTube was making. Now they do — and, as one YouTube employee told The Verge, this feels like “a real seminal moment.”
A new study suggests what we’ve suspected for years is right: YouTube is a pipeline for extremism and hate.
How do we know that? More than 330,000 videos on nearly 350 YouTube channels were analyzed and manually classified according to a system designed by the Anti-Defamation League. They were labeled as either media (or what we think of as factual news), “alt-lite” intellectual dark web, or alt-right.
Martin Vassilev makes a good living selling fake views on YouTube videos. Working from home in Ottawa, he has sold about 15 million views so far this year, putting him on track to bring in more than $200,000, records show.
Mr. Vassilev, 32, does not provide the views himself. His website, 500Views.com, connects customers with services that offer views, likes and dislikes generated by computers, not humans. When a supplier cannot fulfill an order, Mr. Vassilev — like a modern switchboard operator — quickly connects with another.
“I can deliver an unlimited amount of views to a video,” Mr. Vassilev said in an interview. “They’ve tried to stop it for so many years, but they can’t stop it. There’s always a way around.”
After Google, more people search on YouTube than on any other site. It is the most popular platform among teenagers, according to a 2018 study by the Pew Research Center, beating out giants like Facebook and Instagram. With billions of views a day, the video site helps spur global cultural sensations, spawn careers, sell brands and promote political agendas.
Wieser told The Post on Wednesday that the impact will be felt by Google, which instead of discussing how to take away TV ad dollars in upcoming ad negotiations will now be mired in “brand safety issues.”
“The marginal increase [in ad dollars] is less likely to occur,” Wieser said.
He said the impact on Google was likely to be around 1 percent of its revenue base, or $1 billion.
“Google’s stated solution was late and woeful,” Wieser said. “Given numerous opportunities to nip it in the bud, they’ve seemingly made it worse.”
When is an “ad credit” actually a refund? As Chris wrote on MusicTech.Solutions, Google advertisers should be entitled to refunds stretching back years for Google’s failure to live up to its promises to protect advertisers from their ads appearing in terror videos.
Many Wall Street analysts are trying to play down the continuing advertising controversy at Google’s YouTube, but Alphabet Inc. investors are likely jittery — and should be.
The bigger fear for investors is that an advertiser backlash could spread from YouTube to Google’s overall search business, or cast a pall over YouTube’s planned “skinny bundle” service. Since the story broke, Alphabet shares have fallen nearly 4%.
Google’s efforts to handle the situation are getting mixed reviews from investors who see cause for concern.
“Their public statements do not suggest to us that the company appreciates the degree to which advertisers are concerned and the continuing announcements of advertisers suspending their activity on Google properties reinforces our view,” Pivotal analyst Wieser wrote.
Trip Chowdhry, an analyst with Global Equities Research, predicted that Google will need to give out ad credits to lure back advertisers, which would also impact YouTube revenue.
In light of the Google/YouTube boycott by brands whose ads have appeared next to hate speech. We thought we’d reprint this piece from November 2014!! Forget exploitative pay from Spotify! Do you want your music on YouTube Music? Will you be alongside Hate rock songs? Jihadi Recruitment Music Videos? Probably. YouTube is full of this […]