This question will sound ridiculous, but it isn’t: Is YouTube a success?
Please hold your boos. It’s hard to imagine the internet without YouTube. Buying the video site in its relative infancy was one of the smartest things Google ever did. But after nearly 15 years of being part of Google, the most successful money machine in internet history, it’s still not clear that YouTube has fulfilled its financial potential both for itself and everyone involved in its vast digital economy.
Two data points: The money that YouTube keeps from selling advertisements — its main source of income — was about $11.2 billion in the past year, not much more than the ad revenue of ViacomCBS, a mid-tier American TV company that owns the CBS television network. Twitter, which is not so hot at money, pulls in roughly double the ad sales on average from each of its users compared with YouTube.
No one should feel bad about YouTube. Yeah, it’s fine. But it says something about the vitality of the internet that YouTube is probably the most vibrant economy online and it’s still hard to call it an unqualified financial winner. And if YouTube isn’t winning, its masses of video creators also won’t be.
The internet’s big promise was to give anyone a shot at making a living from doing what they love, but YouTube shows just how elusive that dream turned out to be. If YouTube isn’t quite living up to high hopes, that means the internet isn’t, either.
Let me dig a little deeper into how odd YouTube is in one important respect: It pays some of the people and companies that stock its virtual shelves with products.
At Facebook, Instagram, TikTok, Snapchat and Twitter, we make their products for free — with some exceptions — in the form of our silly memes, photos from engagement parties and beauty tutorials that we post. For video makers that meet YouTube’s standards, the site typically hands over to those people and organizations about 55 percent of the money from ads that appear in or around their videos.
Because of YouTube’s revenue sharing and other ways for content creators to make money from videos, it most likely has delivered more income to people online than any internet site ever. (This is impossible to prove. People do make money in less direct ways from building an audience on places like Instagram and TikTok, but YouTube remains a go-to spot for people to earn an income online.)
Maybe YouTube, particularly after revelations several years ago that companies’ advertisements were appearing in videos that promoted anti-Semitism and other horrific views, has been less aggressive than companies like Facebook and Twitter about shoving commercial messages everywhere. This is a good thing, even if those are missed opportunities for YouTube and video makers to earn more money.
The end result is that YouTube makes a lot of money for itself and video makers, and its revenue is growing very quickly, but the numbers remain kind of meh relative to its size and influence.
The fact that I even mentioned YouTube in the same paragraph as the middling TV company ViacomCBS and Twitter … well, that says something about how YouTube has underwhelmed for some time. YouTube’s cut of ad revenue is also less than half the size of Netflix’s yearly revenue. (Those figures don’t count YouTube’s income from other sources including subscriptions, which the company does not regularly disclose.)
If YouTube has so far fallen short of its financial potential, what does that say about the rest of the digital world? If you read the work of people like my colleague Taylor Lorenz, who chronicles the internet’s labor force, it’s easy to see that there may be a mismatch between the promise of the internet economy and the reality.
Some people do earn a good living from their creations on YouTube or other apps, but many others are constantly hustling for peanuts and burning out.
It’s hard to stand out in the sea of people making dance videos on TikTok, livestreaming video games on Twitch or hosting YouTube talk shows, and it has always been that way for creative professions. Except digital optimists wanted to believe that the internet would make it easier and more democratic for anyone to find their fans and their calling.
That’s why YouTube’s finances matter to the rest of us. If YouTube isn’t quite working out, then the promise of the internet isn’t, either.
Tip of the Week
Watching the Olympics is still hard
Watching TV should be easy, but GOOD GRACIOUS it’s not simple in the United States to watch the Olympics events we want to see. Brian X. Chen, the consumer technology columnist for The New York Times, walks us through his efforts.
I learned the hard way that people who ditch cable TV still get the short end of the stick.
This week, I was trying to watch a replay of the rock climbing events at the Olympics. I was particularly interested in seeing Adam Ondra, the world’s best climber.
But the recording of the semifinals that NBC made available on YouTube TV, the online bundle of TV channels that I pay for, trimmed the climbing coverage to just one hour. To my frustration, the segment omitted most of Ondra’s airtime. (Read this if you want to know how Ondra did in Thursday’s competition.)
I posted a snarky complaint on Twitter. I soon learned from my followers that the Olympics coverage that Americans see on prime-time television or stream on services like YouTube TV is vastly inferior to the more complete Olympics event coverage in the NBC Sports app.
I downloaded the NBC Sports app and there it was: full footage of each event! But I ran into another problem. To use the service, I needed to log into the app with account information for a cable TV subscription, which I don’t have.
(There is also Olympics coverage on Peacock, the video streaming service that’s part of the same company as NBC. It’s confusing.)
Long story short, cord cutting is great. It’s far easier than it used to be for sports junkies to watch live games and events online. But it’s still optimal to have cable TV, too. Who can afford all these subscriptions?
Before we go …
We still haven’t figured out health apps: New York is the first large jurisdiction in the United States where restaurants, gyms and other public places will require that customers provide proof of vaccination against the coronavirus. My colleagues Erin Woo and Kellen Browning look at the privacy implications of electronic systems to keep track of vaccinated people. (Other countries have also rolled out digital vaccine verification systems.)
Facebook vs. academics: The company said that researchers who solicited volunteers to help study the opaque system of ad targeting on Facebook are threatening people’s privacy. Facebook has a valid argument, Bloomberg News says, and so do the academics.
Remember the Segway? No? Exactly. A former book agent writes in Slate about his role in overhyping the Segway, a novel but ultimately unpopular scooter introduced in 2001 that promised to change the world and did not. It’s a useful lesson in how the pressure of impossible dreams can ruin the chances of a new product.
Hugs to this
The crowd at the 1996 Democratic National Convention danced to “Macarena.” It is painfully corny and wonderful.
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