Youtube from Google is one of undoubtedly the most popular social media platforms in the world with billions of users from across the globe including Papua New Guinea. As a result Google Founders Larry Page and Sergey Brin become billionaires and listed on Forbes.com’s world’s rich list.
So, the simple question any average user of Youtube would ask is this. How do Youtube make money. Here is how Youtube make money as a social media business company and pays it’s content creators.
Youtube (A Subsidary of Google Inc)
Youtube was created in Febuary of 2005 by three former employees of Pay Pal as an online video sharing site. After it became so popular with users, Google Inc bought Youtube for US$1.65 billion in 2006, just after one year. In 2020, according to statistica.com there are 2.6 billion users from around the globe. This amount of users (audience) on the platform means that companies and organizations around globe are interested to access this market audience and the way to access this audience is through Google who owns it. So here is the business model for Youtube in a more simpler sense. There are three key players on Youtube. First is the advertisers. They are the companies, individuals, and organizations who advertise their products and services on Youtube. Second is the content creators. They are the organizations, individuals and companies who create content and upload on Yoube and users or consumers are those of us who watch the videos.
Advertisers on Youtube.
Advertisers on Youtube create their advertisements media, pay Youtube and supply those advertisements media. Youtube, then place the advertisements in the content videos that the users are watching.
Youtube Content Creators.
Google as the owner of Youtube doesn’t create any video content at all. The original idea of Youtube website remains, which is a online-video sharing site. Individuals, organizations and companies are free to create a Youtube channel and upload the contents and share it with the users from around the globe.
Youtube User (Audience).
The Youtube users are the consumers of videos on the site. Content creators and advertisers can also be consumers if they are using the service t watch their own videos or videos from other creators and advertisers.
How Does Youtube Pays Content Creators?
Users go to Youtube to watch videos and since videos are created by content creators, Google has to come up with a program to pay content creators so that they can continue to create and upload quality video contents to the site. This is where Google Adsense program was created. A payment system created by Google to pay content creators. This includes the owners of websites with text contents as well as videos creators. Creators of contents who have Youtube channel accounts or websites can apply to Google to participate in Google Adsense program. Once they are accepted, they are regarded as content publishers and given a Google Adsense Publisher ID number. This number can used to track their contents, either as Videos on Youtube or published on their websites.
Every time, Google serves an advertisement via the publisher’s website or Youtube channel, the publisher or content creator is paid a certain portion of that advertisement fee from Google. This compensates them for their efforts as creators of content. The earnings are tallied every month and whenever the amount reaches a threshold of more than US$100.00 dollars, Google pays them automatically into their nominated bank accounts in their countries.
This is why Youtube is so popular with so many quality videos on any topic from all over the globe.