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New Zealand's longest-running online daily news and commentary publication, now in its 25th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

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End of the road for YouTube

20 November 2020

YouTube has just shot itself in the foot, again.

One of the reasons that YouTube has become the leading video-based platform on the internet is down to the way it incentivises creators to produce good quality videos on a regular basis.

It does this through its YouTube Partner Program (YPP). Anyone who has sufficient subscribers and whose videos are popular enough can join the YPP providing their content is not extreme and doesn't breach the "community guidelines" for decency and wholesomeness. Members of the YPP actually earn money from advertisements that YouTube places on their videos and this even allows some lowly creators such as my self to earn a humble living from this activity.

When I create a video and upload it to YouTube, I define what sort of ads (if any) I want to appear on that video. There can be pre-rolls, mid-rolls or banner ads.

If I decide to allow advertising, YouTube will then place ads of the chosen types on that video and share the ad revenue with me. I think the ratio is about 60 percent to YouTube and 40% to me.

Make enough videos, get enough views and even the fraction of a cent each video view earns can add up to a modest but useful amount of money every month.

Get a stupidly high number of views (like some of the most popular YouTube channes) and that "modest amount" becomes a sum measured in millions, if not tens of millions of dollars a year.

With this kind of incentive, it's only natural that many people have done what I've done and committed to create and upload videos as a full-time vocation.

As a result, YouTube is a wonderful place where there's a never-ending stream of entertainment, information and other video-based content appearing every day.

However, YouTube has just changed the rules ("Terms of Service") as they tend to do from time to time -- and the implications of those changes are not good for anyone, except YouTube.

In the past, if you were not a member of the YPP or you deliberately chose not to put ads on your videos, those videos were shown without ads. Makes sense doesn't it?

Organisations such as charities, churches, government agencies etc, all tend not to run ads on their videos because obviously that could result in embarassing situations for them. Imagine if female hygene products started appearing on a channel run by The Church of Latter Day Saints or something similar. I doubt they'd be happy about that.

Well, under the new rule changes, YouTube has decided that it will start throwing ads on channels that are not members of the YPP and there's not a damned thing the operators of those channels can do about it.

Even worse, even though members of the YPP program like myself get a share of the revenues that ads on my channel create, non-YPP channels won't get a single, solitary, red cent.

Yep, YouTube keeps *all* the money when it places ads on a non-partnered channel.

This is going to cause *huge* distruption to the YouTube ecosystem and have effects far greater than I think anyone has contemplated. It will be an utter disaster of a magnitude even greater than "the adpocalypse" that happened a few years ago and here's why...

Firstly, by effectively giving itself the right to put ads on *any* channel, YouTube has just increased its adspace inventory by a huge amount. In effect, the supply of ad-space has been massively increased -- but the demand for that ad space will continue as normal.

Thanks to the laws of supply and demand, that means the value of *all* ad-space on YouTube will fall dramatically. There will be an instant over-supply of ad-space that will drive down ad rates by a significant amount. This means that the existing YPP creators like myself will see our earnings fall in concert with that drop in the value of the ads on our vids.

Secondly, YPP creators will no longer get the high-value ads. Those who pay the most for their ads will find them placed on non-partner channels in preference to YPP channels -- because YouTube keeps *all* the money in that case. Why would YouTube share the revenues from high-priced ads with partners when it can pocket the entire amount by running those ads on non-partnered channels?

Yes, YPP creators will get the dregs, the lowest priced ads and this will further drive down earnings for those like myself who commit huge amounts of time, energy and resources to making the content that keeps YouTube at the top.

Finally, the viewer experience for those who simply watch videos will go to hell in a handbasket.

Right now there are a goodly percentage of videos that have no ads because the channels on which they appear are not in the YPP. Once this change comes in, they will also be filled with ads so no matter what you watch, you'll have to put up with the annoyance those ads create.

It's even worse than that though. There are a growing number of creators who, like myself choose not to put mid-roll ads in their videos. By doing this we don't annoy the snot out of viewers. Sadly, those channels that are not part of the YPP won't have any control over the type of ads YouTube puts on their content. This means that the previously ad-free videos are likely to be come the most ad-infested ones on the platform -- especially when you also remember that YouTube will be making twice as much money from those ads as they do from ads on YPP channels.

This is just the latest move by YouTube to screw its platform and one can only hope that it opens the door to alternatives that can now exploit what will soon become outrage within the content creator and "user" communities.

If things turn out to be as bad as I suspect they will, I'll have no option but to host my own content and give YouTube the flick. That'll mean creating new revenue streams but it'll be better being a "partner" where you have no say at all over the conditions, terms and remuneration levels you're working under.

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