In 2007, YouTube launched the YouTube Partner Program (YPP), giving creators the ability to earn a portion of the platform's advertising revenue. This was a milestone that enabled creators to monetize their work and transform their own experiences, insights, knowledge, and creativity into livelihoods.
From then on, we saw the emergence of YouTubers becoming wealthy through making videos, ushering in the era of "creator" as a career aspiration for the Alpha Generation. But it didn't end there—other platforms such as Instagram, TikTok, Twitch, and Discord have also seen the rise of professional creators who make a full time living from making content.
From then on, we saw the emergence of YouTubers becoming wealthy through making videos, ushering in the era of "creator" as a career aspiration for the Alpha Generation. But it didn't end there—other platforms such as Instagram, TikTok, Twitch, and Discord have also seen the rise of professional creators who make a full time living from making content.
Recently, we have seen a notable trend of professional creators announcing much-needed breaks to combat burnout. It's also not uncommon to hear about creators with large followings who have created their own platforms to connect with their community of dedicated fans.
That begs the question: why are creators leaving the major platforms where they have already built up a large following? What made them look for alternatives?
PART 1. Why creators are leaving the major platforms
The YouTube Partner Program (YPP) that launched the creator economy
In an effort to inspire more people to create content, Google introduced the YouTube Partner Program ("YPP"), which made it possible for creators to earn money just from uploading videos. Eventually, this sparked the beginning of the creator economy*.
(* Creator economy: An economic system in which creators add value through content creation)
But is YPP really a program for YouTubers?
YPP has faced criticism from numerous creators for restricting their ad revenue, even after meeting the monetization threshold. Ongoing scrutiny of their activity level also adds to their frustrations. Recently, YouTube's announcement of new eligibility criteria for monetization has caused a lot of concern among YouTubers. Other platforms are no exception to these issues.
The growing concerns of popular creators
01 Lack of ownership of the content
Creators must upload content consistently to receive payment. Even if payment is suspended due to inactivity for more than six months, ads still appear on content that has already been published—without any guarantee that the creators will be compensated later on. This lack of monetization is tantamount to denying creators full ownership of their content.
02 Burnout from algorithms that fuel greed and competition
Taking YouTube as an example, the AI algorithm significantly impacts content views and distribution. However, the specific criteria of this algorithm remain undisclosed to the public, leaving YouTubers to rely on their own operating experience to make educated guesses. Unaware of how YouTube's recommendation system operates, many YouTubers are led to believe that consistent video uploads lead to higher view counts. The influence of the algorithm on videos from other channels also creates a sense of competition among YouTubers. The end result? Mental and physical exhaustion from working long hours.
In a newsletter by Publish Press, which covers stories about the creator economy, a story was shared highlighting the experience of video creator and science fiction author Lindsay Ellis. Despite having 1.2 million subscribers on YouTube, she chose not to upload new content to the platform due to the detrimental impact of the algorithm on her mental health.
03 Lack of ownership of data
On YouTube, the number of subscribers is not necessarily proportional to the ad revenue. Ad revenue is decided based on views rather than subscribers, making it difficult for YouTubers to predict their earnings accurately. This situation is not unique to YouTube, but applies to other platforms as well. While platforms offer aggregated data through dashboards, gaining insights into the next level of "business" data, such as identifying loyal fans, understanding their journey, their actions, and level of engagement, remains challenging. For creators solely relying on the platform, comprehending their core fandom based on the provided data becomes a struggle. This lack of clarity makes it challenging for them to create content and manage their business effectively through data-driven decisions based on a deep understanding of their fans.
04 The platform's content policy
YouTube maintains a zero-tolerance policy against violent or dangerous content, contributing to the improvement of content quality and user protection. However, this policy also results in some unintended consequences. For instance, a scene showing a high percentage of skin color is automatically flagged as explicit content, and a channel with three copyright warnings is removed rather than being made private. This leaves channel owners in a vulnerable position. The fate of their channels rests in the hands of YouTube's policies, which can be unsettling for creators—making it crucial for them build owned channels.
The importance of a predictable business model
Building a sustainable business necessitates careful planning and future forecasting. However, creators face challenges in their operations due to unpredictable ad revenue and internal platform regulations. The critical issue lies not in the lack of channel growth or profitability, but rather in the volatility that hinders stable channel operations and long-term company development. The platforms are, of course, aware of these challenges.
Alongside the traditional advertising model, Google has introduced YouTube Premium, a subscription-based model that offers a predictable revenue stream. They have also enhanced sponsorship, membership, and shopping features within YouTube channels, providing extended opportunities for creators to monetize their content.
However, just like YPP, there are some limitations for eligibility.
As for YouTube Shopping, although it presents itself as a shopping experience within the platform, it ultimately directs users to external channels. Viewers or subscribers are prompted to click on product tags within the video, which then leads them to the retailer's website. In other words, it is not a direct eCommerce solution integrated within the platform itself—but more of a product tagging feature.
YouTube is not the only platform providing direct monetization solutions for creators. TikTok has released its Creativity Program, while Instagram has introduced Instagram Subscriptions. There is a general consensus that content creators across platforms need more effective methods to monetize their work.
But creators still suffer from unpredictable income, despite the efforts of major platforms. This makes it difficult for them to expand beyond content creation to licensing their intellectual property (IP) and hiring additional staff to scale their operations.
PART 2. The exodus from the major platforms—and the importance of building your own
Exodus rush: Why depending on the larger platforms can make ad revenue less stable and undermine leadership
Going back to the YouTube example, popular YouTubers benefit from the exposure provided by YouTube's algorithm in that it helps them reach a large audience. However, they also have to deal with a system that limits their control over the content they create and the data generated on the platform. Creators play a crucial role in the success of platform companies, including YouTube, yet the compensation system for creators remains precarious. They are not assured full ownership of their content and data, highlighting the inherent instability in the current setup.
The real issue isn't just about how much revenue you make, but rather the unpredictable nature of running one's own business. Experienced creators will tell you that's why it's crucial to lessen your reliance on big platforms, like ad revenue, and instead create your own platforms where you have more control over your online space.
(Image) The YouTube Revenue Model. The more direct revenue creators receive through branding, the more stable the business.
Owned platforms put the power back in the hands of creators
Once you've established yourself as an influential enough creator to qualify for monetization, the next move is to explore ways of generating revenue beyond ads. A great approach is to diversify your income by branding your intellectual property (IP).
To enhance branding, the first step is to establish your own online presence. Creators can achieve this at a relatively low cost and low barrier to entry with a cloud-based software-as-a-service (SaaS) platform builder. From there, you can customize the features to suit your specific business needs, such as monetization, sponsorships, subscriptions, and commerce, resulting in an independent, branded platform. This approach empowers you to amplify the value of your personal brand through compelling content, foster a dedicated community, and venture into selling physical products leveraging your original Intellectual Property (IP).
Once you have a dedicated fandom on your independent platform, you can shift towards direct-to-customer (D2C) monetization. This approach allows you to directly monetize your relationship with fans, eliminating intermediaries and enabling you to retain a larger share of the revenue. Moreover, by diversifying your income beyond advertising, you gain the ability to predict your earnings more accurately.
As you establish your own platform and strengthen your brand, a notable benefit is regaining ownership of content and data. Not only do you gain control over the revenue generated by your content, but you can also use the data to understand fans' behavior. This valuable insight helps you effectively manage your business and make informed decisions.
But here's the thing: it's not easy to establish your own brand and build a business on your independent platform. That's because up until now, your primary focus may have been on content creation.
Scaling your business with IT technology and expert consulting
While it may be relatively straightforward to create an independent space using IT technology, the various aspects involved in running an actual business—including marketing, operations, partnerships, payment processing, distribution, shipping, and customer service—can be overwhelming for creators to handle independently. In such cases, you can gain a competitive advantage with support from consulting that helps with the operational aspects.
However, that leads us to the question: Are these options true alternatives to the big platforms? Is it feasible to concentrate operations solely on your own platform?
Can you leave the the major platforms behind entirely?
The algorithms of the major platforms have enabled creators to get their content seen, gain a substantial following, and even uncover lucrative business prospects along the way.
Therefore, when you've established your own platform for various reasons like revenue diversification or ensuring business stability, it becomes a difficult choice to completely abandon a major platform. After all, you have a dedicated and supportive audience that has been with you for years. There is also still potential to earn ad revenue, even if it's unpredictable.
The most practical alternative in this scenario is to operate both your own platform and a prominent existing platform simultaneously, each serving distinct purposes. While the large platforms allow you to reach a wide audience and promote your content to the masses, you can also gather a community of dedicated fans on your own platform, fostering a relationship-based fandom business.
By prioritizing autonomy and reducing reliance on large platforms, you can gain more control over your business. Less dependence on ad revenue and a focus on developing independence can lead to greater stability. Furthermore, by cultivating meaningful engagement with a loyal fandom rather than mere subscribers, you can establish a strong foundation for your business.
Beyond the Core
In his book "Beyond the Core," management consultant Chris Zook highlights the importance of core expansion as a key strategy. This principle holds true not only in traditional industries but also in the creative economy. It involves strengthening your core to achieve greater output and, when necessary, creating a new core to overcome limitations.
Armed with data ownership on their owned platforms, creators like yourself can gain valuable insights about loyal fans. You can work towards building a fandom business that genuinely connects with your core fandom by actively addressing their needs in content and commerce. Through membership operations, you can foster a sense of community and expand the core by attracting individuals who share similar interests. This approach aims to create a business that wholeheartedly embraces the core fandom, offering a welcoming and fan-friendly experience.
As a creator, have you reached a growth plateau on the major platforms?
Now is the time to become serious about your fandom business with your own platform.
[Reference]
The Million-Follower Factory: TikTok Is Making Everyone Famous—But Few Creators Are Cashing In
Adobe <Future of Creativity(2022)>
SignalFire’s Creator Economy Market Map
The State of the Creator Economy – Assessing the Economic, Cultural, and Educational Impact of YouTube in the US in 2022
10 ways to monetize on YouTube
YouTube Partner Program overview & eligibility
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