In his most recent video, Ryan Kaji throws a brand-new electronic toy truck, wheels still spinning, off an artificial waterfall into a cerulean backyard pool, then he cannonballs in after it. Ryan is demonstrating his truck’s amphibious capability during a toy unboxing video, which accrued nearly 900,000 views. He’s filming in his family’s recently upgraded backyard, a far cry from the picket fence lawn that set the backdrop for his first YouTube videos. But a lot has changed since his first uploads just three years ago. At 9 years old, Ryan Kaji of Ryan’s World, is YouTube’s top earner, paid $29.5 million by the site annually. With 28 million subscribers, Ryan is the unrivaled star of Youtube Kids, and a top contender for YouTube at large.
His reign is followed by 22-year-old Jimmy Donaldson, who does expensive and philanthropic stunts as Mr. Beast, at $24 million, and a group of longtime friends doing comedy and playing amateur sports for the Dude Perfect channel, earning $23 million. YouTube’s top 10 earners represent a collection of the most lucrative genres on YouTube: comedy, amateur sports, kids content, makeup tutorials, and gaming. YouTube’s most successful stars are both entertainers and entrepreneurs, tailoring their content to the algorithm’s monetizable guidelines and audience preferences, and trying to stay within the guidelines of the site’s content parameters.
YouTube, which was originally conceived of as a more accessible video-sharing platform in 2005, ushered in a new era of video content on the web, facilitating everything from independent creative expression to business-oriented video platforming. It’s hard to overstate its popularity, its far-reaching impact, and how the platform has shifted over time, from a home for small creators and home videos to one of the defining corporate institutions of our time.
As of this year, 73% of Americans use YouTube regularly. A reported 62% of businesses use the site to advertise, although the participation rate remains far short of the 81% of businesses that use Facebook videos for that same purpose. People watch more than one billion videos every day. YouTube, coming in just behind Google, is the second-most visited website in the world. When Google acquired YouTube in 2006 for $1.65 billion, it was considered a major, and surprising deal. Today, YouTube is undoubtedly one of Google’s most profitable entities, and continues to grow, increasing its employee headcount by 46.5% in just the past year.
Excepting those at the very top of YouTube who derive the vast majority of their income from the YouTube Partner Program, most YouTubers support themselves with diversified income streams that include paid channel subscriptions, merchandise, in-video advertising (or, sponsored content), third party platforms like Patreon and second jobs. For mid-level creators, with one hundred thousand to one million subscribers—small compared to Mr. Beast’s incredible 47 million, or T-Series astronomical 166 million—YouTube operates as a functionally different entrepreneurial space.
YouTube’s Partner Program, launched in 2007, is likely responsible for a significant portion of YouTube’s current success. The Program financially incentivizes creators to make independent, engaging content for YouTube, while sharing the enormous advertising revenue with them. And while YouTubers are allowed creative autonomy, YouTube functionally acts as the ultimate arbiter of advertising revenue, using ever-shifting parameters to determine what can be monetizable content. For example, content can’t be violent, sexual, criminal, or include any of the many other characteristics Youtube has deemed unsuitable for the platform.
Conversely, YouTube favors content that fits neatly into its less controversial guidelines: creators are rewarded for content made in English anywhere in the world (although there are over 80 localized versions of Youtube). The longer a video is, the more valuable it is, given that it offers more opportunities for advertising. And YouTube tends to favor content that is family-friendly, whether or not it is aimed towards YouTube Kids, because it is both uncontroversial and lucrative.
Preferences are enforced both explicitly and implicitly. YouTube is renowned for its algorithmic sidebar and curating an addictive stream of videos on Autoplay, both of which have created a siloing effect that has been both praised for meeting consumer interests and condemned for polarizing content and viewers. But the controversial content that has drawn outspoken condemnation is rarely the content that makes money, usually being demonetized first, removed from Youtube’s recommended algorithms, or, in some cases, deleted from the site completely. In the past, YouTube has also demonetized videos on trending topics that might spread misinformation or be deemed controversial, like they did for videos on COVID-19 early in the pandemic.
It wasn’t until this year that YouTube finally shared “Revenue Per Mile” statistics with creators, a metric that clarified the process of how they generate and accord revenue per view. Until recently, YouTube didn’t allow content creators to share how much they made because Youtube executives often arranged private contracts with creators. As it stands, Youtube pays publishers 68% of the ad revenue, advertisers bid on views anywhere from $0.10 to $0.30 per view. For a video with 1000 views, a creator might get paid $3 - $5.
Still, YouTubers used to make more money on the site. Today’s decreased earning potential is partly attributable to the 2017 “Adpocalypse,” followed by other similar events that sent advertisers running from the site and left Youtube creators scrambling in the aftermath. After a series of debacles with increasingly outraged public opinion, sparked by PewDiPie’s appalling jokes and Logan Paul’s horrific behavior in Japan, YouTube pivoted away from riskier content towards more traditional media, privileging established entertainment stars like late-night TV shows, and designing the more explicit monetizable guidelines they have today.
Today, the revenue tends towards creators at the top, who dominate streaming time and concentrate earnings, assisted by the algorithm and Youtube’s favor. It also speaks to a larger trend underway, signaling a potential exodus of young people from the site, even as 81% of people aged 15-25 use the site regularly. YouTubers making content that might have previously appealed to young fans, are leaving to pursue other lucrative opportunities with more creative freedom on platforms like TikTok and Twitch—with 850 million monthly active users and 140 million users, respectively. As many YouTubers threaten to leave the platform entirely, others have talked about forming a union for Youtubers. Michael Phillipou of RakkaRakka told Logan Paul, both creators having fallen from Youtube’s favor, that their next move might include an exit, “We leave. We find somewhere else that wants our videos. That used to be YouTube, but it’s not anymore. And I don’t think it ever will be again.”
While TikTok’s web traffic has soared in the last year, Youtube and Twitch have remained consistent, maintaining a steady daily pageview.
Both young people and content creators are establishing themselves in places that embody what the old YouTube used to look like: more reliable earning opportunities, and more creative freedom.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.