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Why YouTube and TikTok stars are diversifying their sources of income


Nearly three times as many kids want to be a YouTube star when they grow up than those who dream of being an astronaut. But influencers are also starting to shift their goals: to make more and more money elsewhere, away from the platforms that originally launched their brands.

Nearly two-thirds of YouTube channels now try to make money with their content elsewhere – by connecting to crowdfunding platforms, selling merchandise such as t-shirts or directing audiences to their OnlyFans accounts – according to a recent analysis of 136,000 channels.

This shift points to a larger tectonic shift for people who rely on big tech platforms to make money from their creative work. Increasingly, they are pushing back on platforms such as YouTube, Instagram and TikTok, and seeking more independence over their income that does not depend on the whims of the platforms.

When your salary depends on an algorithm

YouTube creators were among the first to find out what happens when a platform’s algorithm decides to stop paying you.

Five years ago, a so-called adpocalypse hit YouTube, a phenomenon that sent creators’ earnings plummeting almost overnight. Triggered in part by a 2017 news report that revealed major brands were paying to have their products advertised on terrorist recruitment videos, advertisers pulled their money from YouTube and creators’ revenues plummeted quickly and severely.

But lately, YouTube has hinted that the creators of the platform have recovered and are earning more than ever. CEO of parent company Alphabet, Sundar Pichai, told analysts on Alphabet’s 2021 full-year earnings call that the number of YouTube channels earning more than $10,000 a year from advertising revenue from the platform had grown 40% year over year.

” Since the first day, [YouTube has been] very focused on making sure we can support creators well,” he said.

History, including the apocalypse, does not necessarily support this claim. In fact, says Zoe Glatt of the London School of Economics, who studies the lives and businesses of YouTubers, creators are now tapping into multiple revenue streams to maintain stability.

“Content creators are required to diversify their sources of work and income across many platforms and projects if they hope to build lasting audiences and careers,” says Glatt. “At a fundamental level, there is deep concern in the creator community that a platform that seems to be a mainstay of the social media ecology could disappear overnight.”

This anxiety is a recurring theme among creators who also rely on other online platforms. On April 11, tens of thousands of Etsy sellers closed their shops to protest rising fees for every sale they make through the platform. The most recent price hike saw sales fees rise to 6.5% of each transaction, nearly double the 3.5% fee before 2018.

TikTok’s nascent creator base has also been agitated after a highly anticipated creator fund was found to be paying pennies on the dollar for 1,000 views. In a recent video, YouTuber-turned-TikToker Hank Green blasted the short-form video app for its low payouts. “[They’re] bad for creators,” he said.

Other platforms have encountered similar issues. Creators who post on OnlyFans became all too aware of their precarious income in August 2021, when the platform appeared to indicate that any creator posting adult content – ​​who was and is the core component of OnlyFans – would be banned. of the platform due to a dispute. with the site’s payment provider. The decision was reversed after a major backlash, but the dispute has pushed some creators to rival platforms, looking for other ways to ensure their income stability.

In creator revenue streams

The world of YouTube is one of polar opposites: the highest-earning YouTuber in 2021, Jimmy “MrBeast” Donaldson, raked in around $54 million last year.

This comes from a split of ad revenue generated by creator videos, as well as other options, such as direct giveaways and paid subscriptions. YouTube takes around 30% of its creators’ revenue. For the vast majority of creators, their cut does not represent much, if they hope to live from it. A major academic study from 2016 suggests that 96.5% of YouTubers do not make enough money from advertising revenue alone to cross the poverty line in the United States. In 2008, only 2.8% of YouTube channels in the sample were linked to an external fundraising platform. In 2018, it was 20%.

For some creators, it’s not just that YouTube isn’t paying well enough, it’s that their revenue streams could disappear altogether based on a seemingly arbitrary decision. Platforms like YouTube were initially touted as ways to make money that were independent of traditional gatekeepers like studios and publishers. Instead, it may feel as if one’s income is being held hostage.

Jay Hunter, part of the professional wrestling-focused YouTube channel OSW Review, which has 182,000 subscribers, says he constantly worries about YouTube’s revenue disappearing. The entire OSW Review YouTube channel was mistakenly removed from the ad revenue program in September 2019 and only reinstated after a fan-initiated social media campaign on Twitter. “YouTube is a nightmare to navigate as a creator because its rules are intentionally opaque, allowing them to make whatever decisions they see fit,” says Hunter. He calls it a “volatile platform changing its preferences with alarming nonchalance.” Hunter’s channel instead relies on Patreon subscriptions of over 2,000 fans totaling over $10,000 per month and merchandise sales.

Simon Clark, who makes video essays on climate-related topics and has 422,000 subscribers, says he still relies mostly on YouTube, with no plans to quit. But Clark wants to be prepared in case his YouTube-based revenue drops. “I know it’s highly unlikely that YouTube will disappear tomorrow,” he says. “But I always like to have alternative monetization strategies in case YouTube crashes or, more likely, I want to move away from it.”

In an emailed statement, a YouTube spokesperson said, “These creators are bona fide businesses and have contributed significantly to the creator economy, so we expect them to diversify their source of income.”

YouTube, for its part, has encouraged creators to appeal when their channels are demonetized. The company also now offers nearly a dozen in-house programs for creators to earn money that aren’t based strictly on ads, apparently trying to replicate models like Patreon. But it still requires a lot of faith in one platform. Poet and vlogger Leena Norms, who has 162,000 subscribers, declined offers from YouTube to sign up for her Patreon equivalent. Regarding Patreon, she says, “I trust them.”

Glatt says it’s no longer enough to just be “just” a YouTuber; you are expected to be a brand, producing for YouTube, TikTok, Instagram, Twitch and any other platforms that will come in the future.

“Entrepreneurs see themselves as cross-platform media brands, both dependent and independent of the platforms they work on,” says Glatt.

Collective action for creators

For some who build their careers on technology platforms, earning income from alternative sources is not enough: they think it’s time to unite and rebalance power.

Etsy’s recent seller strike is an attempt to make the platform heed creator demands, while Twitch streamers have already used content blocks to try to protest what they perceived as an inaction by the video streaming platform to combat abuse directed at users. .

For YouTube creators, however, efforts to lobby the platform for a bigger ad revenue cut have not taken off.

Several organizing campaigns have been launched over the past decade without success, including the Internet Creators Guild (ICG) – which was launched in 2016 and shut down in 2019, saying it couldn’t find a way to be financially viable.

The YouTubers Union established itself in Germany, and a similar UK-based company, The Creator Union, launched in 2020 to much fanfare, but neither made much headway.

In the absence of meaningful collective change, creators must fend for a sustainable, shock-resistant income – in case something like the adpocalypse strikes again. Even MrBeast doesn’t make all his money from ads alone: ​​he launched a brand of burgers in December 2020.

Norms says, “If people only relied on YouTube to make money, there would be very few full-time YouTubers in the world.”

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