Why Not Copy YouTube’s Good Idea?

This article is part of the On Tech newsletter. Here is a collection of past columns.

This week, On Tech will examine the economics of what is sometimes called the internet creator economy. There are people who are so good at making online entertainment or information that they try to make it a job. Your favorite comedian on Instagram, plant forager on TikTok, or YouTube stunt performer are creators.

Some of you might be thinking: That is a job? It is. These online pros are testing the internet’s promise of enabling anyone to earn a living from creative pursuits. We are entertained by creators’ work, and they influence what we buy, the music we listen to and how products are promoted.

Internet professionals are also the tip of the spear of what’s working and what is not with digital life as we know it. More creators are now saying they want a shot at sharing in online companies’ riches — and we should listen.

Let me back up.

We mostly work for free on the internet.

There is no Facebook, Instagram, YouTube, TikTok or Reddit without the posts, memes and gardening groups that we make voluntarily. Some people have figured out ways to make money from online popularity, including by selling merchandise, getting paid by their fans and signing promotional deals outside the big internet sites.

But shouldn’t all online stars — and maybe the rest of us who post online, too — share in the internet companies’ wealth?

YouTube figured out a way. Since 2007, the Google site has sold advertisements on YouTube and handed over more than half of the money to people who make videos, once they reach a certain level of popularity. When YouTube makes more money, those video makers do, too.

Other companies, notably Facebook and the streaming site Twitch, cut a small number of video makers in on their ad money. But YouTube remains the only major digital service that systematically redistributes a big chunk of its revenue to people who make its products.

Last week, the popular internet personality Hank Green made a video that compares what he is paid on YouTube (good) versus what he is paid from TikTok (not so good), which has a shared lump sum of money for creators that the company doles out under a complex formula.

Green’s point was that as TikTok earns more, creators effectively earn a smaller share of what the company brings in. Implicit in his video was a question of why more companies don’t do what YouTube does and share a sizable chunk of their advertising income.

All the internet companies now say that creators are crucial to keeping users entertained and loyal, and they’re trying to make it easier for fans to pay creators or buy their products.

That’s all potentially useful. But internet companies largely make money from ads. Green imagines creators banding together to push more of these companies to directly share their ad dollars with the people who keep their virtual shelves stocked. It could make a healthier and more resilient online life for all of us, and better jobs for the people trying to make a living from their work online.

“There is a business case to be made for sharing revenue and also there’s a fairness case,” Green told me.

Green in his video pointed out that because YouTube ads run within most videos, it’s more straightforward for YouTube to divvy up the ad money to creators. It would be more difficult for TikTok, Instagram or other sites that don’t use ads in the same way. YouTube’s revenue-sharing model is also an option for only the most popular video makers.

Green knows that YouTube-style revenue sharing won’t be a cure-all for everything that’s wrong with the internet. And like any work force, not all creators want the same thing. Some agreed with Green that YouTube-style revenue sharing is a good way for them to earn a steadier and more sustainable living. Others said they preferred TikTok’s fund for creators or Twitch’s ways of letting people earn money from live streamed videos.

The investor Li Jin told me that the best path to healthy digital economies is not for internet companies to redistribute their income differently, but to obliterate the companies’ absolute power over online creative work.

There’s also a financial mercenary argument: Why would any company give up money if it didn’t have to? There will always be some hungry young people who are happy to make stuff online for nothing.

But this is a moment when established norms of the internet are being questioned. Let’s extend that to the economics of who is paid, and for what, to keep the internet fun and useful for all of us.

Coming on Wednesday: Apple’s app commissions erode earnings for creators. And Thursday: How one online personality makes money from digital work, a zillion different ways.

Before we go …

  • The hottest celebrities in crypto currencies are mayors: Some local leaders including Scott Conger of Jackson, Tenn., are becoming boosters for virtual currencies and related technologies. Their projects might create new revenue streams and attract more residents, or they might mostly be hot air, my colleague David Yaffe-Bellany writes. (Relevant point: There’s a crash in crypto currency prices right now.)

  • An expert in harmful online information became pregnant. And the unhelpful health information and pushy salesmanship that Nina Jankowicz found on pregnancy apps shocked her, she writes for Wired. (A subscription may be required.)

  • Big Tech keeps getting bigger: U.S. regulators want to make it harder for big tech companies to buy up competitors or bulk up in other ways through acquisitions. But Microsoft, Google and Amazon each bought more companies in 2021 than they did during any other year in the past decade, CNBC writes.

Hugs to this

This Great Horned Owl is keeping its egg toasty on a windy day. (Those ear tufts blowing in the wind are just too much.)

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