This doesn't make sense to me. The advertising rates are a connection between the advertiser and the consumer. If the content scales to infinity, there's still the same number of consumers that advertising dollars compete for regardless of available content.
> The channels that will survive here are going to play ball and raise the quality of their content and production values. They're going to be family safe. They're going to provide lots of content and it's going to be shot multi-camera by a staff of people. Smaller creators days on the platform are numbered.
> Thing is, the channels that do this best can do this for themselves. They don't need YouTube if they build a dedicated-enough audience.
Then that leaves room for the smaller creators.
The advertiser has a set budget and is looking at a supply of content. If there's a fixed supply of avenues to reach their customers, then they have to bid against lots of other advertisers to reach those customers. The rate to advertise goes up. If the supply of avenues to reach customers is near infinite, then the cost to reach those customers is almost nothing because there's no market driving up the cost of advertising. It doesn't make sense to spend more money to reach those customers. Reaching customers is cheap and easy. This is Supply & Demand 101.
In terrestrial advertising, there's only a small number of advertising slots that are valuable because that content is gated by place & time. This is not true online (caveat, read below).
(caveat explanation) Okay, I lied: It actually is really valuable. Joe Rogan's advertising slots are _extremely valuable_ and he uses them to to advertise businesses he has a partial ownership stake in (Onnit), which is brilliant. This is the same shit the Zuffa brothers did with the UFC & Xyience and it put millions upon millions of dollars in their pockets. But that's not advertisers paying for those slots, that's pocket A paying pocket B...and as a regular advertiser you can't buy that slot!
PewDiePie is probably making a small fortune off G Fuel, those chairs, and his phone games. These are the smart content creators today. Everyone relying on YouTube or Twitch partner programs for monetization is just on the dole or will be.
If you're a content creator with a reasonable following and not on a 2-3 year plan for productizing your brand, you're on a path to insolvency.
> Then that leaves room for the smaller creators.
Not on YouTube. And video hosting with a global CDN costs money and requires some know-how.
In other words, creator and content growth outstripped ad spend growth.
And by several orders of magnitude. I'm surprised at how many highly intelligent people out there have failed to grasp these basics.
It's also sort of a winner-take-all market. Established channels for each customer segment will capture all of the revenue. Everyone else fights for scraps.
If you look at art/culture trends through modern history, teens aspire to the accomplishments of the generation before them. The clearest sign of YouTube being "done" was all of the surveys of teenagers aspiring to be Youtubers.
If all 100 of the streamers creating content about diy synthesizers have an audience that also watches this larger channel about vintage amplifiers, I might be better consolidating my spend there...or if I'm a small advertiser with a tiny budget, I might be better off doing just the opposite and spending tiny amounts at the 100 small channels.
The point is that as an advertiser I'm almost fully in control over my own destiny, which is simply not true with television and radio networks.
Advertisers and Content Creators aren't really against each other...they're kind of following separate destinies, but if a Content Creator is entirely reliant on Advertisers for their funding model and the market is heavily skewed in favor of Advertisers like online content and newspapers are now, then Content Creators are going to have a really bad time. And there's a bloodbath just over the horizon.
If you look at Netflix, it's the opposite problem. Content Creators are reaping huge rewards and Advertisers have no power, but that's also financially untenable.
I don't see how Netflix model is financially untenable.
They won't keep paying that bill forever.
Think about that for a second. All of those Netflix subscriptions and it's still a flaming fourteen billion dollar crater.
How are they going to close the gap? Where are the new subscribers? How much will the rate go up?
The answer is neither of those. It's far more likely that the money faucet going to content will change first.
Instagram is where high quality content is migrated by virtue of the greater speciation of branding opportunities.
Google keeps things a bit messy so they can drive ad rates higher.
Sure, we have ad block, but digital advertising that performs performs amazingly. When you hit your segment, the money rolls in.
Content creators are complaining about YouTube being strict but YouTube is strongly incentivized here to cut the supply of content. They want to raise advertising rates and charge advertisers more money! That means raising the bar of production value, etc, because YouTube wants to keep the same kind of viewership numbers. YouTube is now mainstream television.
The channels that will survive here are going to play ball and raise the quality of their content and production values. They're going to be family safe. They're going to provide lots of content and it's going to be shot multi-camera by a staff of people. Smaller creators days on the platform are numbered.
Thing is, the channels that do this best can do this for themselves. They don't need YouTube if they build a dedicated-enough audience.
I've been looking at how to make this process easier for people, using things like Cloudflare Stream, and think there may be some business opportunity here.