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That question sounds ridiculous, but it isn’t: is YouTube a success?
Please keep your boos. YouTube has become an indispensable part of the Internet. Buying the video site in its relative infancy was one of the smartest things Google has ever done. But after nearly 15 years as part of Google, the most successful money machine in internet history, it is still not clear whether YouTube has reached its financial potential, both for itself and for everyone involved in its huge digital economy.
Two data points: The money YouTube keeps from selling advertising – its main source of income – was about $ 11.2 billion last year, not much more than the advertising revenue of ViacomCBS, a midsize American television company that owns the CBS television Network. Twitter, which is not that big on money, averages about double the ad sales from each of its users compared to YouTube.
Nobody should feel bad about YouTube. Yes it’s OK. But it says something about the vitality of the internet that YouTube is probably the most dynamic online economy, and it’s still hard to call an unconditional financial winner. And if YouTube doesn’t win, neither will its masses of video artists.
The internet’s big promise was to give everyone the opportunity to make a living doing what they love, but YouTube shows how difficult that dream turned out to be. If YouTube doesn’t quite live up to high hopes, it means the internet doesn’t either.
Let me elaborate a little on how weird YouTube is in one important way: it pays some of the people and companies who fill their virtual shelves with products.
On Facebook, Instagram, TikTok, Snapchat and Twitter we post their products – with a few exceptions – for free in the form of our silly memes, photos of engagement parties and beauty tutorials that we publish. Typically, for video makers who adhere to YouTube standards, the site gives about 55 percent of the money to these people and organizations from ads that appear in or around their videos.
Because of YouTube’s revenue sharing and other opportunities for content creators to make money from videos, it has most likely generated more revenue for people on the internet than any other website ever. (This is impossible to prove. People make money in less direct ways by building audiences on places like Instagram and TikTok, but YouTube remains a go-to place for people to make money online.)
Perhaps, especially after revelations a few years ago that company ads appeared in videos promoting anti-Semitism and other horrific views, YouTube is less aggressive than companies like Facebook and Twitter when it comes to getting commercial news everywhere. This is a good thing even if these are missed opportunities for YouTube and video makers to make more money.
The bottom line is that YouTube is making a lot of money for itself and the video makers, and its revenues are growing very rapidly, but the numbers remain rather small relative to its size and influence.
The fact that I even mentioned YouTube in the same paragraph as the mediocre TV company ViacomCBS and Twitter … well, that says something about how much YouTube has been underutilized for a while. YouTube’s ad revenue cut is also less than half of Netflix’s annual revenue. (These numbers don’t count YouTube’s revenue from other sources, including subscriptions, which the company doesn’t regularly disclose.)
If YouTube hasn’t reached its financial potential yet, what does that say about the rest of the digital world? When you read the work of the likes of my colleague Taylor Lorenz, who chronicles the workforce of the internet, it’s easy to see that there may be a mismatch between the promise of the internet economy and reality.
Some people make a good living doing their creations on YouTube or other apps, but many others are constantly pushing for peanuts and burning out.
It’s hard to stand out from the sea of people making dance videos on TikTok, live streaming video games on Twitch, or hosting YouTube talk shows, and that has always been the case for creative professions. Except for digital optimists, they wanted to believe that the internet would make it easier and more democratic for everyone to find their fans and their calling.
This is why YouTube’s finances are important to the rest of us. If YouTube isn’t quite working, then neither is the internet’s promise.
Tip of the week
Seeing the Olympics is still difficult
Television should be easy, but GOOD GRACIOUS It’s not easy to see the Olympics that we want to see in the United States. Brian X. Chen, consumer technology columnist for the New York Times, guides us through his endeavors.
I learned the hard way that people who give up cable television still get the short end of the stick.
This week I tried to watch a replay of the climbing competitions at the Olympics. I was particularly interested to see Adam Ondra, the best climber in the world.
But the recording of the semi-finals, which NBC made available on YouTube TV, the online package from television channels I pay for, reduced the climbing coverage to just an hour. To my frustration, the segment skipped most of Ondra’s airtime. (Read this if you want to know how Ondra fared in the competition on Thursday.)
I posted a snappy complaint on Twitter. I soon learned from my followers that the coverage of the Olympics that Americans see on prime-time TV or on services like YouTube TV is far inferior to the broader coverage of the Olympics on the NBC Sports app.
I downloaded the NBC Sports app and there it was: full footage from every event! But I ran into another problem. To use the service, I had to log into the app with account information for a cable TV subscription that I don’t have.
(There’s also coverage of the Olympics on Peacock, the video streaming service owned by NBC. It’s confusing.)
Long story short, cutting cables is great. For sports junkies, it’s much easier than it used to be to watch live games and events online. But cable television is still ideal too. Who can afford all of these subscriptions?
Before we go …
We still haven’t figured out any health apps: New York is the first major jurisdiction in the United States to require restaurants, gyms, and other public places to provide evidence of vaccination against the coronavirus. My colleagues Erin Woo and Kellen Browning are studying the privacy impact of electronic systems to keep track of people who have been vaccinated. (Other countries have also implemented digital systems to verify vaccines.)
Facebook vs. academics: The company said researchers who recruited volunteers to study Facebook’s opaque system of ad targeting are threatening people’s privacy. Facebook has a valid argument, says Bloomberg News, and so do the academics.
Do you remember the Segway? No? Exactly. A former book agent writes in Slate about his role in exaggerating the Segway, a scooter introduced in 2001 but ultimately unpopular that promised to and did not change the world. It’s a useful lesson on how the pressure of impossible dreams can ruin your chances of a new product.
The crowd at the 1996 Democratic National Convention danced to “Macarena”. It’s painfully cheesy and wonderful.
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