In an attempt to keep its stars happy, YouTube has announced the addition of a new talent option that will allow content creators with more than 100,000 subscribers to sell memberships to their fans. It will give ‘loyal’ viewers the chance to enter a YouTube paid subscription in exchange for perks such as custom emojis, exclusive content, and merchandise. Will this be enough to keep its content creators happy after growing concerns over YouTube’s repeated algorithm changes?
Stars’ growing frustration with YouTube
YouTube content creators have long demanded more ways to grow their channel and make money other than through advertising. US vloggers such as Phil DeFranco and Casey Neistat have called for new money-making measures, with complaints escalating over the past year.
Many YouTube channels have suffered from steep declines in advertising sales as the Google-owned website constantly tinkers with its algorithms, routinely changing which videos are eligible for publicity. It has also stripped ads from many channels to appease companies whose ads run in front of videos that they consider to be inappropriate.
Alex Warren, the author of ‘Technoutopia: How optimism ruined the internet’, told Verdict: “When it comes to managing its algorithms, YouTube has been placed in an impossible position. On the one hand, the video giant is under constant pressure to fight trolling and hate speech across its platform. On the other, every time a new stricter algorithm or content policy is introduced, content creators are outraged by the sudden loss of advertising revenue, subscribers, and views.
“While clearly struggling to strike a balance between these opposing pressures, YouTube’s approach has not helped the issue. Rather than deciding set changes to the algorithm and announcing them publicly, YouTube instead chose to roll out updates incrementally, with limited visibility as to what it was changing and why. The result has been outraged content creators seeing their traffic drop by as much as 40% overnight, with no explanation as to why they are being penalised.”
Many disenchanted YouTube stars have moved to services such as membership platform Patreon, which offers exclusive experiences to its subscribers in exchange for a monthly fee. Others are moving to the popular Facebook and Amazon’s Twitch service, where many content creators already make more money from selling subscriptions than they do through advertising.
How will the YouTube paid subscription service boost users’ earnings?
Warren said: “The decision to start selling the subscriptions is long overdue, but it’s easy to see why YouTube has been putting it off.
“In the last 12 months, vloggers and YouTube stars have found it harder and harder to make money on the platform. Advertising simply isn’t delivering the same return that it did two to three years ago, with numerous YouTubers now turning to services, such as Patreon to beg for additional funding from fans.
“Despite being well aware of this fact, YouTube has generally ignored the issue. Why? Because to acknowledge that advertising-funded media isn’t providing a return on investment is to admit that the very system that YouTube and Google bases its business model on is dying. The addition of the talent option is a major turning point for the brand. It represents a real admission that things aren’t working and that the ad-funded internet is broken.”
The move would see YouTube minimise the threat from rivals, and the company provided statistics on the growing number of people who make a living on its site. It announced that, since 2017, the number of YouTube channel owners earning a five-figure salary has risen by more than 35%, and those earning a six-figure salary increased by 40%.
In an interview yesterday at the annual convention for online video in California, YouTube chief product officer Neal Mohan said: “This is a means to diversify that revenue picture. It’s something creators have been asking for. We’ve built products hand-in-hand with them.’’
He added that YouTube creators will also be able to sell merchandise from their channel page.
Subscriptions are important for advancing the goals of parent company Alphabet, which is trying to diversify its revenue sources. The company sells phones, home speakers, and cloud software. YouTube has introduced a paid music service in addition to its live TV service.
The YouTube paid subscription service has already been made available to some channels devoted to video game streaming, and will soon be available to thousands of channels.
Emma Usher, founder of influencer marketing platform thevipsuite.co.uk and celebrity consultancy RunRagged told Verdict: “I’m surprised it’s taken YouTube this long to launch a feature like this. There’s a lot of money changing hands between brands and influencers and the commission the video streaming giant will earn from this will increase their revenue beyond advertising. But this isn’t the only benefit.
“With the arrival of Instagram TV–an aggressive move–the competition for YouTube to retain the biggest influencers has become more of a challenge so helping them make more money through subscriptions will support that retention effort. It won’t be long before the other platforms introduce similar features.”