Because your target consumers are watching more YouTube channels than ever before. Example: as a 3D printing and general "maker" enthusiast, there used to only be a few channels putting out a few videos a month in these categories. Now I'm subbed to probably a dozen and their release frequency is increasing while the overall ad budget has probably not grown much. On a per-channel, per-minute basis, the dollar value has thus gone down.

In other words, creator and content growth outstripped ad spend growth.

> 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.

Ah, so the important part isn't that creator or content growth is outstripping ad spend; it's that viewer growth is outstripping ad spend. (Which means less revenue per view.) That makes way more sense.

I'd say it's both. More viewers, so per-view revenue is down, but more creators and videos as well so per-video revenue is also down due to increased competition. The net result is what you see today on channels - ad revenue used to be plenty for creators, but now they're plugging sponsors, merch, Patreon, and anything else they can to make up the shortfall.

True, but that's a separate issue from the one being discussed in this article. Increased competition between creators may make it more difficult to get viewers, but it doesn't directly hurt CPM.

What the other guy said. Also, segments have overlap and you can target.

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 pay a Netflix subscription, while I pay Google nothing.

I don't see how Netflix model is financially untenable.

It isn't your subscription that funds Netflix's original content, it's investor cash burn. To the tune of about ~$14B since 2011.

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.