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How Demonetization of YouTube Videos is Hurting Content Creators

There is no doubt that there are plenty of videos on YouTube that would not be deemed as appropriate for viewing by general audiences. In light of this, YouTube has been sticking to a policy known as demonetization. The idea of demonetization is that advertisements do not get shown on videos that are deemed inappropriate for whatever reason (content related to sex, terrorism, excessive violence etc.). From the advertiser standpoint, this is actually not necessarily detrimental, because advertisers, understandably, would not want their product to be associated with inappropriate content on YouTube. From YouTube’s perspective, this minimizes risk to YouTube’s public image. Before demonetization, terrorist groups such as Hezbollah were able to generate revenue for their cause through YouTube videos. From the content creator’s perspective, however, this is not good. Conceptually, it seems pretty reasonable that you should not be able to generate revenue off of inappropriate content. However, it is the implementation of said concept that is ruining the revenue of content creators.

The way that YouTube implemented demonetization is through a bot that automatically flags content as inappropriate at the video’s release. The bot, however, is far from perfect and there are plenty of appropriate videos that get flagged as inappropriate and become demonetized. YouTube allows content creators to appeal the demonetization if they feel that it was unjustified. The problem lies in the fact that YouTube videos often get the highest amount of views in their first few days of release, and the appeal process often takes a few days to resolve. This means that content creators lose large amounts of revenue for no reason. Of course, YouTube loses money as well since they also benefit from showing advertisements on videos, but the financial burden on individual content creators is substantially bigger than it is on YouTube.

Looking at the situation from a market perspective, one might begin to question why content creators do not just move to a different medium. After all, the situation can be viewed as similar to the idea of power in exchange with the 1-exchange rule (1-exchange since content creators would most likely not want to split their viewer count across sites and risk not receiving any ad money). Here it would seem that content creators have all the power, since they have the option of choosing any video streaming site and when a content creator posts to one of these mediums, both the content creator and the medium benefit. However, the problem is that YouTube is so absurdly more powerful than the other video streaming sites. Taking this into account, the situation becomes more similar to a matching market, where content creators are the consumers, video streaming sites are the product, and demonetization can be paralleled to YouTube raising the price of their product. YouTube’s overwhelming dominance in the video streaming industry makes it such that even if YouTube pursues demonetization, the payoff for content creators to post on YouTube is still higher than the alternatives. This basically shows that content creators have no practical alternative and YouTube pretty much holds all the power. Even still, YouTube still needs to handle this issue even if it seems that they are doing fine anyway at the moment, since if this continues, content creators will no longer be able to produce content at the rate that they currently do (or perhaps will not be able to make content at all) as they will have to find other work to supplement their falling revenue. This would lead to YouTube making less money, since the relationship between YouTube and the content creators is mutually dependent.

 

 

https://www.forbes.com/sites/erikkain/2017/09/18/adpocalypse-2017-heres-what-you-need-to-know-about-youtubes-demonetization-troubles/#4572934e6c26

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