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YouTube Generated $28.8 Billion in Ad Revenue in 2021, Fueling the Creator Economy

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YouTube Moves Away from Original Programming to Focus on Creator Funding Initiatives


While TikTok continues its meteoric rise, and looks set to become an even more influential platform this year, YouTube remains the clear leader in the online video space. And it looks set to maintain the top spot for one key reason – its revenue-sharing program, which sees billions shared with creators each year, and which no other platform is close to matching just yet, in terms of a sustainable creator monetization model.

YouTube’s Partner Program, which is now well embedded, and established within its own ecosystem, is now a key driver of the broader creator economy. And this week, as part of parent company Alphabet’s Q4 performance update, we got some more insight into just how significant this element has become.

As per Alphabet’s report, YouTube generated $8.6 billion in ad revenue in Q4 2021, while for the full year, YouTube brought in $28.8 billion in advertising income.

As you can see, that’s a significant jump on YouTube’s 2020 performance. And with around 55% of YouTube ad revenue going to creators, that means that YouTube paid creators more than $15 billion throughout 2021, a huge chunk of the overall creator economy funding.

Though that’s not exact. YouTube does share 55% of its ad revenue with creators based on the ads displayed on their clips, but it also has other ad options outside of this, while its move to monetize all content, not just videos in its Partner Program, as of November 2020, also makes the full revenue split less clear-cut than 55% of its overall take.

But even so, it’s still a huge amount, and a massive lure for YouTube, which the platform will continue to use to try and sway creators away from TikTok, by offering more incentive, more opportunity and greater rewards for their efforts.

YouTube, of course, has also been looking to combat the rise of TikTok with its own alternative in ‘Shorts’, which, according to Alphabet CEO Sundar Pichai, continues to see significant momentum.

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YouTube Shorts continues to drive significant engagement. We just hit five trillion all time views, and have over fifteen billion views each day globally. This is helping our creator community reach newer and bigger audiences. In fact, more people are creating content on YouTube than ever before. Last year, the number of YouTube channels that made at least $10,000 in revenue was up more than 40% year over year. And we’re continuing to improve support for Artists and Creators.”

Pichai also notes that more creators are now earning money from YouTube’s non-ad products, including Super Chat and Channel Memberships, while its $100 million Shorts Fund is now available in more than one-hundred countries.

Creator funds like this can be problematic, in that the amount remains static, while usage changes (as recently explained by YouTube creator Hank Green). But YouTube, with its expanded funding models, is in a much more sustainable, profitable and beneficial position for creators than emerging platforms like TikTok, which is still working out how to best facilitate creator funding within short video clips.

Short videos are too short to insert mid-stream ads, which makes direct revenue attribution more difficult. That’s pushed TikTok to explore other alternatives, like brand partnerships, though it remains to be seen whether TikTok can establish enough of a business model on this front to keep its most popular creators around long term.

Another option that TikTok’s exploring is eCommerce, and enabling creators to generate revenue by selling products tied to their TikTok clips.

Which YouTube, too, is testing:

As per Pichai:

“We’re making it easier for viewers to buy what they see – and simpler for advertisers to drive action with innovative solutions like product feeds in Video Action Campaigns and emerging formats like live commerce. Backcountry.com generated a 12:1 return-on-ad-spend with product feeds in 2021 and plans to double its investment in 2022. While Samsung, Walmart, and Verizon partnered with creators to host shoppable holiday livestream events in the US”

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Just as this is a key opportunity on TikTok, it’s also similarly significant on YouTube – and potentially, even more so, with many people searching on YouTube for product info, while YouTube clips are also linked to Google searches.

That could make this another valuable avenue for YouTube creator monetization, and another element in which YouTube could beat TikTok out, with more incentive for big-name stars.

Also interesting – Alphabet says that it will test some of its eCommerce ideas for YouTube in India first “because we can get quicker feedback”.

“A very dynamic, youthful population. And so we’ll do it there, and then roll it out globally. So we are constantly looking for opportunities like that.”

And in another direct assault on TikTok, YouTube’s also now testing commerce links in Shorts:

“Super early also on testing how shopping can be integrated with Shorts. And so, again, early, but I find the opportunity space here pretty broad, and it’s exciting.”

It’s interesting to consider the broader chess game at play here, and how the bigger players are looking to counter the growth of TikTok where they can, and hit the rising platform where it hurts, in terms of monetization and creator promotion tools.

TikTok is the cool app of the moment, and it’s definitely been great at capturing attention. But just like Vine before it, creator monetization remains a challenge – and already TikTok creators are calling for a bigger slice of the revenue pie, under threat of them potentially taking their content to other platforms instead.

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Which is exactly what happened to Vine, with its top stars calling for more money as the app continued to grow, which eventually lead to them migrating to other apps.

TikTok is far bigger now that Vine ever was, and seems too big, really, to fail at this stage. But then again, if this does become a key sticking point, and creators do take their talents, and audiences, to other apps, it remains a possibility that TikTok might not make it in the long term.

Meanwhile, YouTube continues to go from strength to strength, and iterate on its already established monetization models. TikTok may be popular, but the battle for online video supremacy is still ruled by the incumbent, and will be for the foreseeable future at least.



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Fresh fears after Facebook’s role in US abortion case

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Facebook's role in an abortion prosecution has raised fresh worries from advocates

Facebook’s role in an abortion prosecution has raised fresh worries from advocates – Copyright AFP/File Javed TANVEER

Glenn CHAPMAN

Facebook sparked outrage by complying with US police probing an abortion case, boosting simmering fears the platform will be a tool for clamping down on the procedure.

Criticism built after media reports revealed the social networking giant had turned over messages key to a mother being criminally charged with an abortion for her daughter.

Advocates had warned of exactly this kind of thing after America’s top court revoked the national right to abortion in late June, as big tech companies hold a trove of data on users locations and behavior.

Jessica Burgess, 41, was accused of helping her 17-year-old daughter to terminate a pregnancy in the midwestern US state of Nebraska.

She faces five charges — including one under a 2010 law which only allows abortion up to 20 weeks after fertilization.

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The daughter faces three charges, including one of concealing or abandoning a corpse.

Yet Facebook owner Meta defended itself Tuesday by noting the Nebraska court order “didn’t mention abortion at all”, and came before the Supreme Court’s highly divisive decision in June to overturn Roe v Wade, the case which conferred right to abortion in the United States.

“That sentence would seem to imply that *if* the search warrants mentioned abortion, there would be a different result. But of course that’s not true,” tweeted Logan Koepke, who researches on how technology impacts issues like criminal justice.

When queried about handing over the data, the Silicon Valley giant pointed AFP to its policy of complying with government requests when “the law requires us to do so.”

Nebraska’s restrictions were adopted years before Roe was overturned. Some 16 states have outright bans or limits in the early weeks of pregnancy in their jurisdictions.

– ‘Can’t release encrypted chats’ –

For tech world watchers, the Nebraska case surely won’t be the last.

“This is going to keep happening to companies that have vast amounts of data about people across the country and around the world,” said Alexandra Givens, CEO of the non-profit Center for Democracy & Technology.

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She went on to note that if companies receive a duly-issued legal request, under a valid law, there are strong incentives for them to want to comply with that request.

“The companies at a minimum have to make sure that they’re insisting on a full legal process, that warrants are specific and not a fishing expedition, searches are very narrowly construed and that they notify users so that users can try to push back,” Givens added.

Meta did not provide AFP the Nebraska court’s order. The police filing asked the judge to order the company not to tell Burgess’s daughter about the search warrant for her Facebook messages.

“I have reason to believe that notifying the subscriber or customer of the issuance of this search warrant may result in the destruction of or tampering with evidence,” police detective Ben McBride wrote.

He told the court he began investigating “concerns” in late April that Burgess’s daughter had given birth prematurely to a “stillborn child”, which they allegedly buried together.

Advocates noted that apart from not using Meta’s products, one sure way to keep users’ communications out of government hands would be for them to be automatically encrypted.

Meta-owned WhatsApp has end-to-end encryption, which means the company does not have access to the information, but that level of privacy protection is not the default setting on Facebook messenger.

“The company has never said it would not comply with a request from law enforcement in a situation related to abortions,” said Caitlin Seeley George, a campaign director at advocacy group Fight for the Future.

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“If users could rely on encrypted messaging, Meta wouldn’t even be in a position where they could share conversations,” she added.

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