YouTube, advertisers to gain but content creators fret over video-streaming giant’s new terms

Starting June 1, YouTube's new policies dictate some important changes

YouTube’s decision to monetise any content uploaded by anybody, without sharing revenue from June 1 will boost its finances and help advertisers but the change is not going down well with many in the digital space including content creators.

YouTube can now show an ad banner on any uploaded video on its website or run advertisements before it can be viewed.

"The problem with this would be for small time creators who started out just now and would not want ads to be shown on their videos because they're just in the start of their journey and would want a hinder-free experience with reaching out to newer audience. This is where I feel a newbie will suffer," said Sanjyot Keer, digital content creator and chef, who runs a food channel on YouTube called Your Food Lab which has 2.26 million subscribers.

Another YouTuber said that so far ads were placed only on content under the YouTube Partner Program (YPP), which gave content creators a share in the revenue.

Aayush Tiwari, VP - Talent Management & Music Business, Monk Entertainment, said that earlier "to enable monetisation, a creator was required to at least have 1,000 subscribers and 4,000 watch hours. After eligibility, a mutual agreement between YouTube and the creator enabled the latter to earn 55 percent of the total revenue on the channel. "

Impact on YouTubers

YouTube's new terms of service gives the platform the right to not only run ads on channels that are yet to meet the above criteria but the platform will also not share revenue generated from ads with creators, Tiwari added.

This is why the new terms of service will negatively affect content creators who work hard to increase their subscribers and use YPP as an additional source of income, Ankit Saraf, Founder, Meraqi Digital, said. "It might also lead to a decrease in their video views especially for smaller content creators, as users might deviate from the video if they see ads frequently.”

Chaaya Baradhwaaj, Founder & MD, BC Web Wise, a digital marketing agency, said if viewers are not be allowed to disable ads then it affects branded content.

"More ads is not a pleasant experience, and not sharing revenue is ok for those who are not looking at YouTube for monetisation, but definitely discourages content creators," she added.

The new policy of YouTube may also lead to broader distribution of ads, said Keer. “since every video could be monetised by the platform, I think the ad distribution would be even on a broader number of videos and there would be lesser ads being placed on bigger channels that might push the revenue to go down," he said.

All good for advertisers

While it is not all good news for YouTubers, for advertisers the updated terms open a world of opportunity for advertisers, said Ankit Agarwal, Founder, Do Your Thng, an influencer marketing platform.

"They (advertisers) can now handpick content from more creators. Besides a broader content menu, they can micro-target audiences and gain more return on their investment. Further, the cost of placing ads may drop down considerably for marketers."

Explaining drop in advertising cost, Sagar Pushp, CEO & Co-founder, ClanConnect, an influencer marketing platform, said, "The cost in my opinion will come down as supply increases. Ad inventory bidding is in real-time and when the inventory will increase the buyer becomes empowered to have a better rate."

Adding to this, Raghav Kansal, Founder of ET Medialabs, said, "Yes, there will be much larger inventory now available for advertisers on YouTube.  Initially, we are expecting a drop in CPM (cost per mille) rates due to increase in supply side of ad inventory. But as more and more advertisers jump onto YouTube ads bandwagon, these rates should soon return to optimal levels."

Along with having better ad rates, advertisers will now have more opportunity for grassroot-level niche marketing, said Pranav Panpalia, Founder, OpraahFx, an influencer marketing and talent management company.

"The community of micro and nano influencers is very strong across all the social media platforms, but earlier it was difficult for advertisers to target this audience community on YouTube. Also, YouTube has a great algorithm to show ads on only brand-safe channels and content. So, it is not that people will see a lot of ads," he added.

Siddhartha Vanvani, Founder & CEO, Digidarts, pointed out that Youtube’s recent ad policy revision will play an essential card of growth and visibility for each brand aspiring to attract a huge number of audience. "Now, the brands can not only target more channels for advertisement but can certainly promote their presence by appearing on the channels of quality content creators," he said.

It's a win-win for YouTube

The biggest beneficiary will be YouTube itself.

According to Agarwal, YouTube is using the updated terms to drive more users towards the subscription. "They’re probably banking on the fact that at least a small subset of viewers would want to have an ad-free experience on the platform."

Ask Agarwal whether the strategy will work and he said, "Indian users are notorious when it comes to paying for premium services. They either can’t afford it or are unwilling to shell out money. It’s the reason why YouTube Music and Premium combined have just over 30 lakh paid subscribers in the country (India). Compared to overall YouTube users (325 million monthly unique viewers) in India, that’s a measly number."

While for YouTube it is a win-win situation by either getting more ad revenue or by adding more subscribers for its premium service, creators will face challenges who will now have to worker harder to create good content, ensure organic follower increase and make earnings by brand associations and not depend on YouTube's ad revenue, said Pushp.