Sunday, May 7, 2017

The YouTube Red Checkmate

I’ve had many issues with YouTube’s Content ID System and the revenue (or lack thereof) that YouTube pays to content owners.  Without rehashing all the details (which you can find here, here, and here), the short story is that I was strong-armed into utilizing Content ID to monetize user-generated uploads containing my music, under what I perceive to be deplorably substandard deal terms (i.e. 55% of net revenue, with no clear understanding of what “net” constitutes).  

While this compromise was necessary to combat unauthorized uploads of my music (and their illegal monetization of my content), when it came to my personal YouTube channel I elected not to monetize my own uploads with ads, in protest of the revenue splits that I find so distasteful (and in defiance of the emerging ad culture).  So I wasn’t making money on my personal uploads, but neither was YouTube.

Then around the end of 2015, YouTube began unrolling something called YouTube Red.  This was a new subscription based service that would allow subscribers to watch unlimited YouTube content without any accompanying or intrusive advertisements, in exchange for a flat monthly fee.  It was touted as a new revenue stream for creators, who would be paid according to how much their content was watched by YouTube Red subscribers each month.  Sounds good … you know, apart from receiving only 55% of net earnings within this new revenue stream.

Fast forward, YouTube Red is fully up and running in all territories, and Red income begins being collected on my behalf within the Content ID System.  Then a realization eventually ensues.  Shouldn’t I be receiving YouTube Red income for my personal uploads?  After all, my YouTube channel is set up and approved for monetization (I simply disabled the ad option on all my videos).  Let’s go take a look.  Huh, I see there are YouTube Red views, but no YouTube Red money.  What gives?

Well, it turns out that in order to receive my share of Red income for any given video, I am required to enable ads on that video.  Even though these are two completely independent and unrelated revenue streams, YouTube holds Red earnings hostage until you agree to play the ad game.  Of course, YouTube has not volunteered or acknowledged this fact, but it has been unequivocally established in practice (at least in my case).  Basically, YouTube has designed an all or nothing monetization scheme - opt in and collect both ad and subscription revenue, or opt out and collect nothing.

Naturally, this introduces a new variable into the analysis.  While foregoing ad revenue results in a lose-lose scenario, foregoing Red revenue results in a win-lose scenario, whereby YouTube pockets their share of Red revenue regardless of the fact that I have not received mine - my share of Red income just gets distributed to other content owners.  So essentially, not participating in Red income equates to literally giving my money away to other people.  

Thus, I now find myself in a situation where, in order to receive my share of YouTube Red earnings, I must monetize my YouTube channel with ads.  Game, set, match.  Well played YouTube.  Well played.

1 comment:

  1. Hi Zack! Tremendous respect and appreciation for your work, and I love your NOMAD album.

    I'd like to invite you to check out my blog post which analyses some of the lyrics from 'The Runner'.

    Find it here:
    http://www.hriwrite.com/2017/01/the-poignancy-of-sonder.html

    Feel free to ask me a question, collaborate or abuse me.

    ReplyDelete