Introduction
YouTube is a free video-sharing website that makes it easy to watch online videos. You can even create and upload your own videos to share with others. Originally created in 2005, YouTube is now one of the most popular sites on the Web, with visitors watching around 6 billion hours of video every month.
YouTube is an American online video-sharing platform headquartered in San Bruno, California. Three former PayPal employees-Chad Hurley, Steve Chen, and Jawed Karim—created the service in February 2005. Google bought the site in November 2006 for US$1.65 billion; YouTube now operates as one of Google's subsidiaries.
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In February 2019, PewDiePie, the most subscribed YouTuber at the time, came under fire for posting videos that YouTube deemed 'Anti-Semitic' and 'hate speech. These videos included references and jokes about Hitler and two Indian men holding a sign stating 'Death to all Jews'. During this same time videos including, 'Chief Keef dancing to Alabama N*gger', and other extremist content, surfaced leading to the UK Government, Coca-Cola, Dr. Pepper, Johnson & Johnson, and many major brands pulling or pausing their advertisements on YouTube.
Methodology:
This document will evaluate how YouTube can cut its losses by losing advertisements from big companies and how it can increase its revenue from within the company. SWOT analysis will be a key tool to figure out where are YouTubes' opportunities and threats and their strengths and weaknesses. Another key tool will be the fishbone diagram as it will help turn the light on the many causes of this huge revenue loss for YouTube. The research question was changed from “ how did the YouTube ad apocalypse affect YouTube creators” to “ how did the ad apocalypse affect YouTubes revenue” because if I was to stick with the first research question my IA will not be valid since YouTube creators are not one person or a company and it would not have matched the required word count. This document is supported by 4 written articles and the YouTube website. All the data used for this document is secondary research since it was widely available and it shows many viewpoints on the issue.
YouTubes SWOT analysis:
• Strengths
- Reputations and image: YouTube is the biggest video-sharing website as of 2009. YouTube has over 2 billion users all over the world. YouTube is a very and easy stable website financially and it's very simple to use hence the huge number of users. Although the market for video sharing platforms is massive and there are many competitors to YouTube the biggest name in that market is YouTube since the launch of the company YouTube has dominated the market.
- Loyalty: YouTube users are very loyal to the website you can rarely find a user of YouTube that also uses Vimeo because YouTube is the bigger name and YouTube allows anyone that has a YouTube account completely free to upload a video to the site which gathers more people around. YouTube relies on the creators because the creators bring more eyes to the site. YouTube has the biggest creators in the world for example PewDiePie also known as Felix has more than 107 million subscribers (Tuesday, 20 October 2020) so his fans are very loyal to him which leads to them being loyal to YouTube since he only uploads videos to YouTube there are many more examples of this.
• Weaknesses
- Unreliable: due to the huge number of users the stress is caused by millions of users on the site at the same time the site crashes for a day or two days. (last crash was on December 18, 2019)
- Everything is public: since anyone can post a video on YouTube and it’s completely free some users steal other users’ content which causes copyright issues. If any user with a big following makes a mistake using a slur word and has children watching their videos all the time this can cause backlash online. YouTube can also cause issues with privacy invasion.
- YouTube accounts are easily disabled: anyone can report a video or your YouTube channel. And sometimes channels are disabled on baseless claims and this causes the creator to lose out on money since YouTube pays its creators to upload videos on the site.
• Opportunities:
- Adding new services: YouTube is a free video-sharing website you can upload and watch videos for free but what if YouTube added a paying service that people pay for monthly or yearly and get exclusive content back for paying X amount of money?
- Paying for music: music artists upload their music videos or lyric videos to YouTube for free and anyone can listen to music free on YouTube as mentioned earlier. YouTube would make more money by adding a section and allowing users to pay to listen to music as they did with “YouTube originals” which is a paying service that YouTube offers. YouTube originals offer tv shows that are exclusively on YouTube since the director of these shows are paid exclusively to work on YouTube. If they implement this idea, they would probably see a huge influx of money.
• Threats:
- The Facebook threat: Facebook over the past year has come back and is the biggest threat to YouTube at the moment since YouTube has guidelines that you have to follow when uploading a video Facebook has much easier guidelines to follow which makes it easier to upload a video there and not risking it getting taken down and on Facebook, there is a built-in relevance feed so any videos that you have liked for example if you have liked a sports video when you go to your feed more sports videos will be shown to you YouTube doesn’t have that and that’s a big hit on YouTubes side.
- TikTok's dominance: TikTok has blown up over the past two years and has over 2.7 billion users and is also a free video-sharing application. Tiktok has a hefty creator funding behind them of over 150 million USD. This attracts many creators to focus on TikTok instead of YouTube since TikTok has the same built-in relevance database that Facebook uses it also attracts people who just want to watch videos on the app without sharing any.
YouTube cause and effect analysis:
At that time the videos surfacing were not monetized and were not put in the guidelines moreover this might show the incompetence of the YouTube staff at that time and how they could not take down a video that had over 200 million views it should have been a very simple action but the video was taken down only after 200 million views which caused a huge backlash online about this as mentioned in the methodology many other videos also made this issue more mainstream media. Another issue that still surfaces from time to time to this day is content that is not age-gated or age-restricted. Many creators have received unfair lawsuits for using slur words or showing explicit content since YouTube has a system in place that is supposed to age-gate those videos but that system has failed and that has shown over the years. “ I upload videos for 18-year-olds my content is very mature and not meant for kids everyone knows this, but I’m still getting these lawsuits from parents of 13 or 14-year-olds who watch my videos it's not fair, its YouTube mistake and I’m the one losing my money over this” stated Harry from the w2s channel on Twitter. YouTube has not solved this issue to this day and more and more creators are moving to other platforms to upload their content since they are basically only losing money on YouTube because of all these lawsuits and advertisers pulling and pausing their ads on the platform. All of these issues have caused this ad apocalypse which has resulted in YouTube losing out on hundreds of millions in revenue.
Conclusion:
YouTube lost out on an estimated 757 million USD because of the ad apocalypse. The effect was all short-term at that time because YouTube have made their guidelines clearer, and they also fixed many issues with the monetization database and even fired some staff that was incompetent in making those decisions which caused this huge loss for the company, but there are still niggling issues that still surface. There were some limitations to my research since some articles about this issue have been taken down because of lawsuits from YouTube there are many viewpoints on this issue and some articles were all based on lies so it was difficult sometimes finding the right information.
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