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Who pays for the hosting costs then? It is very expensive for YouTube to host all of the videos that they do, and they way they pay for that is taking a portion

Who pays for the hosting costs then? It is very expensive for YouTube to host all of the videos that they do, and they way they pay for that is taking a portion of advertising revenue. Small YouTubers are subsidized by larger ones, since larger creators give YouTube the ad revenue they need to pay for the costs of hosting all of the videos that don't get much ad revenue. If YouTubers stop using YouTube ads entirely, I think it will be increasingly unprofitable for YouTube to allow smaller YouTubers, and casual people, to post videos on the platform. And I don't see how this middle way is any better for most YouTubers anyways. The reason some YouTubers get demonetized is that advertisers don't want to show ads on certain types of content. If advertisers don't want to show ads on a video through YouTube, they probably won't want to do that through this third party service either. For large YouTubers it can certainly help (which is why they are already doing it) since advertisers can seek out large YouTubers who have a fanbase matching their requirements, but I don't see how it helps in general.

derefr 7y ago
In such an alternative approach, YouTube would still be taking a cut of the fees as the payment-processor interceding between advertisers and content-creators. Their business model would be equivalent to that of Patreon's, in the sense that when the content-creator gets paid, they get paid. With current YouTube, any fees paid in by advertisers are theirs to do with as they like, and payment-of-content-creators is just a nice thing that YouTube happens to do, but can not-do on a whim with no ill effects. "Revenue from advertisers" and "expenses paying out content-creators" are two entirely independent lines on their balance sheet. In this alternate model, the money they would receive from advertisers would now be a liability on their balance-sheet, something owed (except for the fraction taken as fee) to the content creator, just as if it was money in a savings account they were holding for the content-creator.
- eclipxe 7y ago
  But...why?
  - derefr 7y ago
    Because then YouTube has no incentive (or ability, really) to prevent what it thinks of as “advertiser-unfriendly” content-creators from being monetized. As long as there are advertisers making deals with a content creator, that content creator is, by definition, advertiser friendly.

derefr 7y ago

In such an alternative approach, YouTube would still be taking a cut of the fees as the payment-processor interceding between advertisers and content-creators. Their business model would be equivalent to that of Patreon's, in the sense that when the content-creator gets paid, they get paid. With current YouTube, any fees paid in by advertisers are theirs to do with as they like, and payment-of-content-creators is just a nice thing that YouTube happens to do, but can not-do on a whim with no ill effects. "Revenue from advertisers" and "expenses paying out content-creators" are two entirely independent lines on their balance sheet. In this alternate model, the money they would receive from advertisers would now be a liability on their balance-sheet, something owed (except for the fraction taken as fee) to the content creator, just as if it was money in a savings account they were holding for the content-creator.

eclipxe 7y ago
But...why?
- derefr 7y ago
  Because then YouTube has no incentive (or ability, really) to prevent what it thinks of as “advertiser-unfriendly” content-creators from being monetized. As long as there are advertisers making deals with a content creator, that content creator is, by definition, advertiser friendly.