YouTube: https://youtube.com/watch?v=Xjva2zbLXoM
Previous: Just Some Thoughts
Next: Testing a Product called ROZY

Categories

Statistics

View count:27,377
Likes:1,989
Dislikes:19
Comments:154
Duration:10:21
Uploaded:2020-10-01
Last sync:2020-10-12 14:30
I have a little newsletter at hank.substack.com and I wrote this yesterday and then I had some free time so I decided to record it in audio format and release it that way as well, both because I like hearing my own voice and also because I know damn well that I listen to a lot more than I read these days.
Well, let's try this then.  Hello, it's Hank Green from the Pay Attention newsletter and also other things.  I'm not gonna edit this.  I'm just gonna do it and if I mess it up, you're gonna listen to me mess it up.  This is just an audio version of a thing that I wrote in text so you can just hear it if you would rather do it that way.  

So YouTubers like myself, we take something as a given: that the amount of money we make from YouTube is a function of the amount of money we make for YouTube.  I've made a lot of YouTube videos and on a lot of YouTube channels over the years, so I know very well that not every view is created equal.  Individual videos can make way more per view.  Channels definitely can have huge varieties of how much money they make per view on them.  Lots of different things that affect this.  

The majority of YouTube ads are auctioned off to potential buyers and those buyers are interested in reaching specific people, so if you make content about personal finance for affluent 30-somethings, there's a lot more competition for your audience than if you're making content for teenagers, who don't have as much disposable income, and on YouTube, you make 55% of whatever YouTube makes selling ads against your content.

There's a lot to be said for this transparency.  It has a certain amount of fairness but then it also has a certain amount of unfairness.  People who get ten times more views can end up making significantly less money and that's not really fair to the creator, nor is it fair to the audience who will be less served because advertisers are less interested in them.  That's not a new problem of course, this has always been the case.  Magazines, movies, TV shows, you make more and you can spend more on higher quality content if your audience has the money to pay, either for a subscription or for a product that an advertiser is selling, or both.

This is a completely unexamined--I didn't even write this down--completely unexamined effect of income inequality that the amount of content being created for rich people is just very high and that's nice.  It's pleasant.  It makes the world better for those people.  It also makes them, I would assume, feel more valued in society if they are seeing that like, more stuff is being made for them and the kind of person that they are.  That's a thing.  It matters.  This affects what audiences get served and which creators can make a living and I haven't even considered that there might be a different way.  

Well, TikTok has found a different way.  Also, can we just say on the face of it here that TikTok, I don't know, it's been around, but it hasn't, like, really exploded until this year and--and it, unlike Instagram, which is a functionally identical platform, is sharing revenue immediately and Instagram's just over there being like, figure it out your own goddamn selves.  

Anyway, TikTok found a different way.  So I just made my first thousand dollars through the TikTok creator fund.  That fund budgets 200 million dollars a year to compensate TikTok creators not based on how much money they make for the platform but based on how much engagement a creator's content gets.  My assumption is that the most important bit of engagement is the view, or possibly the amount of time spent viewing.  None of this is explicit.  I don't really know, but I can tell from my numbers that it seems to be mostly based on views, yeah, or maybe time watched.  It seems to be views.  It--if it's time--if time watched matters then like, it's just that there's not a lot of variation in time watched on TikTok so it doesn't--that's not that big of a deal, so view is a good surrogate for that.

However this is decided, whatever metrics go into it, the money is divided up equally among all accounts that receive this engagement or qualified engagement.  To explain how that works, let us give an example.  If we just assume that the only metric that matters is a view.  It's not, but like, it seems to basically be that, if the entire TikTok platform gets a billion views on any given day, again, it's much higher than this, just making the numbers easy, and I am responsible for a million of those views, I will take home 0.1% of the fund's daily allocation, so $200,000,000/365, I guess.  I guess.  I'm guessing.

So the money was in a big pot and then it's getting spread around not based on who was responsible for making that money, but who is responsible for attracting people to the platform, keeping them on the platform, and having them engage on the platform.  There are a couple caveats here.  They aren't that important, but engagement in certain regions and countries might not count or doesn't count or it counts less.  This makes sense to me because, you know, I think that like, and it's sort of a hit to the egalitarian nature of this, but like, ultimately, advertising is much more valuable in the US than say in Brazil.  That's just the case.

There are--second caveat, there are probably some protections against fraud that decrease certain creators' per-engagement revenue because there are, as on all platforms, lots of fake TikTok accounts that are doing fake engagement and you know, we have ot be accounting for that and I am sure that they're doing that work, but the end result is that in my fishing around and asking people questions, everyone is making pretty much the same amount of money per view  on any given day.  Now, there's tons of daily variation because there are a lot more views on TikTok on weekends than on weekdays and so the same number of views will be responsible for a lower piece of a smaller piece of the pie, but  on any given day, it seems like everyone makes just about the same amount of money per view whether your audience is 40 year olds or pre-teens and yes, there are olds on TikTok.  

On YouTube, this difference can be like, 10x to, in extreme cases, like 25x from creator to creator.  TikTok's model I'm not saying is like, good or bad, but it is different in a way that matters, and monetization at all and the systems for monetization on TikTok, like, also matters.  The fact that they have made this creator fund in a world where Instagram continues to just sit, like, sit on it, you know?  Sit on it, and that it is--it's a significant amount of money, like, I have a big TikTok account, but not like huge.  I've got like, 900,000 followers.  I, you know, but like, I mean, there's a lot of TikTokers who are much bigger than me and a thousand dollars per month, that's not bad.  I mean, obviously, like it's not gonna like, be the only income stream that a person has, but it's not bad.  I'm not spending like 40 hours a week on my TikTok here.

Anyway, so it means--what this means is that people with wealthy audiences don't automatically and immediately make more than people with poorer audiences and that might matter.  It's a shift that YouTube could never make now but it might end up actually being a better system for platforms that, at this point, I think care more about rewarding content that rewards viewers rather than content that makes money.  

Now, two important notes.  Number 1, just because this is how it is doesn't mean that this is what was intended. TikTok may have done this because they believe, as is increasingly common, that attention is the one true currency and that it is far too narrow to imagine that just because one person has a more valuable audience means they are more valuable to the platform, but honestly, it like--so the alternative there in TikTok's case being like, you are valuable whether or not you are monetarily valuable, because you, like, you are part of the overall experience of this becoming a culturally relevant force and more and more people adopting the platform, etc, but it's honestly just as likely or more likely that this is a function of just how ads display on the platforms.  

On YouTube, an ad is tied to an individual piece of content, so like an ad runs before my content, while on TikTok, as with Instagram, ads appear as independent pieces of content that are part of the feed.  That makes it hard or impossible to credit any individual creator with any individual ad impression.  Likewise, the technology for figuring all that out, even if you could, sounds really complex, so like, this is just an easier way of doing it in a system where ads aren't tied to individual pieces of content.  

There's also another benefit of having ads tied to individual--not being tied to individual pieces of content as they are on YouTube because the advertiser doesn't then have to like, in this ridiculous way, but the advertiser then isn't responsible for the content of what they're advertising against as they are on YouTube.  So if like your advertisement comes before a really objectionable TikTok, it's not tied to that TikTok the way that it is if a pre-roll runs on a video of like, a terrorist recruitment or something, which was a big problem for YouTube, so that's just an additional separate advantage of that phenomenon that has nothing to do with this, the broader discussion that we're having here right now.

Important note #2, just because these dollars are more egalitarian doesn't mean that other dollars are more egalitarian.  Brand deals, in-app gifts, merch, crowdfunding, all those things, as always, will be more lucrative for people who have audience who have more disposable income, but in this one way, which is more than usual, there is a kind of egalitarian distribution of resources that will impact which creators are able to make a living through their passion, which audiences--and which audiences are going to be served when they otherwise would not have been and a message to any TikTok employees out there who may be listening to me right now, the quality and quantity of content on your platform will only go up as the creator fund budget increases, and if you make it a fixed percent of your ad revenue and you make that percentage match or exceed YouTube's, I promise you, you will not feel bad about the kind of magic you inspire people to create.

All right.  This was radical egalitarianism of TikTok's creator fund matters!  All right.  I guess--thanks for listening?  I guess that's it.