Content creators in recent years just haven't been able to catch a break. Starting with the "Adpocalypse" of 2017 to now, it seems like the playing field is being strongly leveraged against them. This time, its creators who produce children's content that lie in the crosshairs.
It starts with a settlement between YouTube and the FTC.
The Federal Trade Commission ("FTC") reached a settlement with YouTube earlier this year for a record breaking $170 Million over alleged violations of COPPA - a US law that went into affect in 1998 that was designed to protect children from data collection online.
This settlement was the result of an official complaint filed by both the FTC and New York Attorney General, citing that YouTube and Google were illegally collecting personal information of minors aged 13 and under. COPPA requires that for this collection to take place, Google would need the consent of the parent or guardian of each individual user. In this case, Google's personalized ad targeting that they make use of for YouTube content's monetization tools was the problem.
Let's get to the impact.
This is a big deal for creators. Google is widely known for their high quality ad targeting abilities that allow brands to target by age, gender, interests, and hundreds of other metrics. This level of precision comes at a higher cost, but leads to better payouts for YouTube content and higher conversions for advertisers.
However, Google is now required to make adjustments to the YouTube platform to ensure complete compliance with COPPA. That's an extremely large hit to the advertising model for the millions of hours of kids friendly content that live on the site.
Starting on January 1st, 2020, all videos that exist on YouTube must be flagged as being kid-directed or not. This doesn't just mean new uploads, either, it means all new videos as well as the entire channel history of each creator. That's a lot of content to flag correctly against the FTC's definition, which encompasses a lot of factors. As of today, the following factors are considered when determining if content is kid-directed or not:
- The subject matter of the site, service, or platform
- The video's visual content
- If a video is of animated characters or child-oriented activities and incentives
- Music or other audio content of the video
- Age of models within the video
- Presence of child celebrities or celebrities who appeal to children in the video
- Language or other characteristics of the website or online service
- Whether advertising promoting or appearing in the website or online service is directed at children
If a video is kid-directed, that means it's going to be affected by these upcoming platform changes. The FTC has also expressed interest in expanding the list to include "child-attractive" videos, or anything that kids could be interested in. This leaves a lot of gray area for a lot of creators.
The results of kid-directed video monetization aren't pretty.
Tubefilter did an experiment with a handful of creators where they asked them to temporarily disable "Interest-Based Ads" on their videos in their channel settings, just to see the impact in the potential future. Creators who turned off this setting for just a few days saw drops in their revenue up to 90%. I REALLY wish that was a typo.
The consequences for choosing to be compliant mean personalized ads for kids can't happen, and creators see a significant drop in revenue. Creators that ignore the "kid-directed" box in an effort to keep personalized ads on their content risk FTC fines that could cause bankruptcy. This is the definition of a choice between two evils.
Luckily, nothing is set in stone yet.
The FTC has already extended their deadline to receive input. If this affects you, you can leave an official comment to the FTC directly - and you should, because the future of content under this rule looks extremely grim for creators. After you do that, it's also important to consider your current revenue options - because staying with only YouTube as your primary income source has become unstable and dangerous.
YouTube has proven that your income stream isn't stable. Expansion is a MUST.
With changes like this occurring seemingly every month, full time creators need to start treating their brand as a business. YouTube is a fantastic launch pad, but the sooner you can diversify your revenue stream, the more stable you are in the face of these revenue risks.
Start a Merchandise Line
Merchandise is all over the place on YouTube: and for good reason. As soon as you begin leveraging your brand into a physical product, you take an important step in ensuring your channel financial success isn't dictated by an algorithm. Fans support you with cash up front, and your brand gets physical advertising in person. It's a win win.
Create Content on Multiple Platforms
If you're a gaming creator, start live streaming on sites like Twitch or Mixer. If you're lifestyle, interact with your fans often and regularly on Instagram or TikTok. It may seem like a hassle to build your fanbase again on multiple platforms, but by ensuring you have content viewable in as many places as possible, you create more stability.
Accept 3rd Party Deals and Sponsorships
We started Melon Seed Media for this exact core purpose. If you can create a stable revenue stream of third-party sponsors that's independent of YouTube's ad systems, you successfully avoid taking the financial toll of losing ad personalization. Many brands pay more than what advertisements would, or offer affiliate programs to help you benefit from traffic you generate. (You also cut out the middleman that is Google.)
Encourage Fan Support Through Tips and Memberships
There are many third party websites that let people monetize what they do through purchases and memberships for anything from early access to videos to game servers. We began the Donoro project to make this easier and lower the bar to entry, but again, moving revenue earning off of YouTube will increase your stability.
It's not an easy time to be a creator. Constant rule changes, monetization hits, new policy enforcement, and algorithm cryptology mean many factors are working against you. However, if you begin to treat what you've built as more than just a channel, there's no limit to how far you'll go.