What YouTube's monetisation policy means for advertisers & creators

Touted as one of the most creator-friendly social media platforms, YouTube is raising some eyebrows with its updated monetisation policy that allows it to monetise every-form of content, even the one that is not a part of its YouTube Partner Programme (YPP), without actually parting its money with creators who have a smaller viewership. Effective June 1, 2021, this will also impact the monetisation of the YPP creators with viewers in the US, as the revenues will be considered as royalties from the tax perspective. If they fail to share the tax information by May 31, Google may be required to subtract up to 24% of the total earnings as tax, the company stated.

Digital marketing experts feel that the creators will face a painful pinch of these monetisation policies on their average earnings. 

Do Your Thng Founder Ankit Agarwal says, “YouTube made it abundantly clear that it not only will advertise as and when they want on any video, it also gains the right to charge other users a fee to access any content. For creators, it’s a sucker punch because they don’t receive any compensation from ads run on their videos. That they can monetize them if they have 1k subscribers and 4000hrs of watch time will only be cold comfort. Many small creators purposefully don’t become a part of the YouTube Partner Program because they feel placing ads can potentially drive viewers away. Moreover, at that stage, the return to them is trifling.”

He adds, “It’s not merely creators who’ll feel the pinch, non-profit channels will too. None of the benefits from the ads placed on their content will go to them.”

Tonic Worldwide Chief Business Officer Sudish Balan explains, “The change in policy is not just going to affect creators who are not on the YouTube Partners Program, but it will also see a dramatic drop in revenue for creators in the YPP program. Because YouTube will prefer to exhaust their ad inventories on non-partners videos and save on commission/royalty that they have to pay out. Non-partner creators will not only not get paid but also will not have any control over the type of ads that will be run on their content nor the duration of ads. Which could lead to higher bounce rates.” 

However, ClanConnect Co-founder & COO Kunal Kishore feels that it might be premature to announce that the creators are going to be at a loss because of these policies.

He quips, “Undoubtedly, YouTube is a creator-friendly platform and has always been focused on their growth. I don’t think they will change their whole brand ethos with this policy change. Though right now, it looks like the move is discouraging for the creators, we should wait and see how it all pans out to see the real impact. They might actually have something better in the store for the creators.”  

SoCheers Co-Founder &  Director Siddharth Devnani also shows a positive inclination towards the move. “For new or small creators, this is definitely less than ideal. It is adding a layer of friction to build subscribers - as viewers might be less patient with less established channels. But YouTube provides them with the viewer base which is unmatched. It has the most used search engine on the internet after google.com. So for the new creators, it might be worth it. And with billions at stake in ad revenue, YouTube is bound to find more avenues to monetise it.”

Jackpot for the Advertisers 

While the creators will have some revenue hassles to deal with, advertisers are going to be the biggest winners with these new set of rules. 

Devnani says that the change in policies will increase the collection of content available to advertise on significantly, allowing advertisers to target better, reach out to niche audiences with content that might not be attracting a large number of subscribers. 

Kishore says a similar sentiment, “Advertisers are aiming to reach every nook and corner of the country right now with their ads. New-age regional creators might not be having a large subscriber base right now and with these new policies in place, advertisers can choose to reach out to that niche and dedicated viewership. They are definitely going to be more picky and choosy with their content now.” 

For the time being, he suggested that creators should amp up their attempts to get in direct touch with brands for partnerships as the quantum of advertisements will not immediately bounce up.