In a nutshell
- Big YouTubers can lose money due to demonetization, copyright issues and relying solely on ad revenue.
- Failure to budget appropriately for expenses like production and marketing can lead to financial losses for content creators.
- Adapting to changing trends and algorithms is crucial for maintaining viewership and revenue on YouTube.
If you’re a content creator on YouTube who’s earning money, you probably understand how profits are generated on your channel. According to Influencer Marketing Hub, content creators receive approximately 55% of the revenue generated from their channels. Furthermore, the average YouTuber earns approximately $0.18 per view or $18 per 1,000 views. Impressively, despite the challenges posed by the pandemic, the top ten highest-earning YouTubers collectively averaged around $300 million in earnings in 2021. Today, becoming a successful YouTuber can be a highly lucrative career choice, especially when you attain the status of being one of the platform’s top earners.
However, there’s fine print associated with financial success on YouTube. Despite the potential for substantial earnings, many individuals find themselves either breaking even or even operating at a loss while pursuing their YouTube ambitions — and this includes big creators. How is such a situation possible? Let’s delve into the factors that can lead even the most prosperous channels into financial difficulties.
Some big YouTubers face high production costs
Creating studio-quality content that attracts thousands of views can be expensive. Paradoxically, the more you earn, the more you may find yourself spending — just look at MrBeast. Although the cost of video production equipment is decreasing, various factors can significantly impact the expenses associated with your video. The type of video you produce, the location you’re filming, the type of gear you need and crew involvement all contribute to the overall cost of production. Additionally, both pre-production and post-production phases play a part in high production costs as well. So, oftentimes, the bigger a YouTuber grows, the bigger their content gets, and, in turn, their production costs skyrocket.
Demonetization is major a factor
Demonetization stands as the primary cause of big YouTubers experiencing revenue losses on the platform. There are several reasons behind a video’s demonetization, with the most common being a violation of YouTube’s advertiser-friendly content guidelines. YouTube will demonetize a video, whether the violation was unintentional or intentional. Consequently, even if a video garners millions of views, the creator won’t earn a single cent from it.
Another way big YouTubers get demonetization is through copyright infringement. The well-known issues surrounding the YouTube copyright system affect creators of all sizes. Creators across the platform are constantly hit with copyright claims. This occurs regardless of whether the creator justifiably violated copyright policy or not. Unfortunately, the time it takes for creators to resolve the issue with YouTube and the copyright claimant often results in their videos already having lost significant revenue.
Bad monetization strategies play a part too
While AdSense remains the primary source of revenue for most creators, the highest-earning ones often derive their income from multiple income streams. Relying solely on advertisers and YouTube for payouts is a concern for many creators, especially following the Adpocalypse of 2017. Big creators who depend exclusively on ad revenue are essentially placing their monthly income in the hands of YouTube and its advertisers. While not inherently a flawed strategy, it carries significant risk, potentially resulting in substantial financial losses if YouTube chooses to demonetize their channels. Even if an appeal leads to YouTube reversing its decision, creators still face losses due to the time it takes for the platform to review its verdict.
It may come down to poor budgeting
Neglecting to allocate funds for taxes, emergencies funds and future investments can have detrimental consequences for big and small creators in the long term. Financial planning plays a pivotal role in ensuring the sustained success of your channel, akin to managing a business. It’s essential to maintain meticulous records of your expenditures since what you earn in one month may not be the same in the next. Despite the cost-saving aspect of having a free channel on social media, successful creators must still budget for various expenses, including technology, marketing, editing and potentially hiring a team of professionals if you’re not a one-person operation. Inadequate budgeting for your productions can result in financial losses.
Their content is no longer in demand
As is the nature of the internet, content types and trends evolve over time. Take, for instance, the game “Pogostuck: Rage With Your Friends,” which gained significant popularity among viewers and creators upon its release. YouTuber Markiplier’s first Pogostuck video alone garnered over 5.5 million views. However, as time passed, the Pogostuck trend waned as new content and creators emerged. If a creator continued to focus on Pogostuck when the platform was moving away from it, they would likely experience a decrease in both views and revenue, even if they had previously earned substantial income from Pogostuck videos.
Content creators who neglect to adjust their content strategy and adapt to shifting trends and algorithms should anticipate a decline in both viewership and revenue.
Start planning for tomorrow now
There are numerous reasons why big YouTubers could experience financial losses. YouTube is a fast-moving platform where profitability can shift around. It’s essential to plan for the future, even when your channel is thriving at the moment. Learn from what we discussed here to ensure you’re ready to handle whatever challenges come your way.