Money on youtube videohosting

Financial side

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Matt: Hey Adam, Matt sitting in National City of. California right now. About you going to work, just finished one of your podcasts and I can't help but wonder, wanting to know the financial side, I'm an accountant by profession, of your rise in. YouTube. I always appreciate how grateful you are for your position and how you've you made it. And you're very grateful for your listeners.

I would love to know more about how much of your income comes from YouTube. How much of your income comes from sponsorship? Just the economics of, what do you get from a video that makes a million views or a video that doesn't, or from your podcast and love to know those things. I get it. We're in the United States where we don't talk about wages and salaries and incomes all that much. So be as divulging as you'd like to be. Adam: I certainly understand your curiosity, Matt. And I doubt that you are alone in being curious about such things. So I'm going to try to give you the most thorough answer that I can, while still being somewhat tactful.

At the very least, being too specific about numbers could put my business representative, Colin "The Best" West, in a somewhat compromised position when negotiating deals on my behalf. So I'm not going to spill all the beans, but I am going to spill some of them. And I'll start with some really basic stuff that I reckon a lot of people listening already know, but I want to get everybody in on the ground floor. So back in the paleolithic era of 2005, 2006, the first years of YouTube's existence, there was no channel monetization. At least none that operated through YouTube. I suppose somebody could have done their own deal with an advertiser to do a paid message in a video that they posted to YouTube. I'd be curious to know who was the first person to do that. That seems like an answerable question, but it's important to remember that early YouTube had very little original content on it and therefore selling ads against early YouTube content would've been legally fraught to say the least.

Generally people do not like it when you steal their content, put it on the internet, sell ads against it and keep the money for yourself. Early YouTube was illegal uploads of the Saturday Night Live "Lazy Sunday" music video by The. Lonely Island guys where Andy Samberg and Chris Parnell rap about going to eat cupcakes at Magnolia Bakery in the West Village, lower Manhattan. The early days of the boutique cupcake boom that was. I'm so glad that boom eventually busted. Cupcakes are massively overrated, IMHO. It's cake, but way harder to eat. I will say, Lauren, my now wife was working at Columbia University that summer.

And I went to visit her and she was like, "Hey, there's this cupcake place you got to try.". And legit Magnolia cupcakes were really good. I understand the hype around that place, but I still consider cupcakes to be a lower form of cake.

If you want a small cake, get

A petit four, which actually fits in your mouth and will not smear frosting on your nose.

Anywho, as people rapidly started making high quality popular original content to post on. YouTube and as YouTube was bought by Google in 2006, the YouTube partner program came to be in 2007. And here's how the partner program works today. You, a person who makes videos, you upload stuff to YouTube and you gain an audience.

You got to work hard for free for a while until you've reached 1000 subscribers and people have watched your videos for at least 4,000 hours collectively within a single calendar year. Once you've done that, you can apply to have your channel monetized. Lots of people criticize this minimal threshold policy. It's like if you were to go down to McDonald's and work for several months for free before they start paying you. And when they do, if they do, they don't give you back pay for all of the burgers you've already flipped. That would be pretty messed up if that happened, right? But it's not a perfect analogy because when you work at McDonald's, you are directly generating revenue for the company. That's less so the case when you are posting videos to YouTube outside of the partner program. In theory, YouTube does not play ads before, during or after videos that are not posted by someone in the partner program, with one notable exception, and that is content that some other copyright holder has claimed.

YouTube has this system, Content ID, that automatically finds and flags content posted by people who might not actually own it. For example, I can go into my YouTube creator interface right now and look at all of the people who have re-uploaded my videos or parts of my videos. And if I want, I can press a copyright claim against any of those people. And if they don't dispute my claim of ownership, I essentially become YouTube's partner for those videos, even though they're not on my channel. YouTube positions ads around those videos, and I get the money or my share of the money, YouTube keeps their share. I have almost never done that by the way. Most people who use my vids on their channel are doing things that I consider to be fair use. Even if I think their fair use is stupid.

Doesn't have to be smart to be fair, but that's a topic for another day. Anyway, unless it's a situation like that, videos that a non-partner posts to YouTube theoretically, do not directly make money for YouTube because YouTube theoretically does not position ads against such videos. Therefore it's not like they are denying you your share. There is nothing to share. Again, in theory. Obviously unpartnered creators indirectly make a ton of money for YouTube, because anything that brings people to the site makes money for YouTube. Also just because an individual McDonald's franchise is unprofitable doesn't mean the owner can just not pay the employees because theoretically there's no money to share from. They still got to pay their people.

But anyway, I think if I were in YouTube's position, I would still have some kind of minimal view or popularity threshold requirement in place for people to apply to the partner program. I think that makes sense. Or it's more that I just can't think of any system better than that. You have to narrow the field of potential partner program applicants because an actual human employee at YouTube has to do the next step in the process, which is to review your channel. You, the creator, you achieve your minimum view and subscriber count, you apply to join the partner program and a human being at YouTube has to look at your channel and make sure that YouTube really wants to sell ads against your channel.

They've got to make sure that you're

Not just uploading content, that doesn't belong to you.

They got to make sure that you're

Not just uploading blatant incitements of violence or all that kind of stuff.

They say this review process takes about a month and it took about a month in my case.

I think that they need to have a minimal view threshold to keep the workload of reviewing those partner program applications manageable. If humans don't do it, they'll have to write a computer program to do it. And nefarious people will find ways to manipulate such a system. They'll write computer programs that make literally a million new channels a day and populate them with pirated or otherwise illicit content. And each channel will probably only get a handful of views. But if they're all monetized, you have millions of channels that will make you a little bit of money and that would add up. That's a situation that would not be great. So I think I support the minimum views and subscribers threshold for monetization only because I can't think of a better system.

If someone can think of a better idea, I am ready and willing to support that. But anyway, you wait a month for a human to review your channel. And when they do and they approve you for the partner program, YouTube will start positioning ads around your videos and giving you your cut of the proceeds. You retain a pretty high level of control over where ads can go in or around your videos. If a creator you follow ever complains that they don't like how many ads YouTube puts in their videos, you should call BS on that creator because the creator really has a lot of control there. I can individually authorize or not authorize YouTube to play ads before my video, after my video or during my video. I have individual power over each of those three scenarios. I can individually authorize or not authorize those overlayed banner ads, skippable versus non skippable ads, all of that.

I can even block a specific advertiser from advertising on my channel if I want. I should probably do that more often whenever I see an ad that really concerns me. I generally allow all ads except for the midroll ads, the YouTube ads that come in the middle of the video. I find those particularly disruptive. And given that my channel has gotten quite successful and I don't have to scramble for every penny, I usually just don't allow the midroll ads. I will say YouTube did a thing about a year ago, where they went back and automatically turned on midroll ads for a bunch of my old videos and a lot of other people's old videos. And I have not found a way to globally turn that off. I just need to go back and do it manually for each one.

And I will do that at some point. So anyway, YouTube sells space to advertisers and positions those ads against your videos and gives you a cut. The revenue split is reportedly 45, 55. YouTube gets 45%. You, the creator of the video, gets 55% of the ad revenue. I will say I have never seen that number attributed to the primary source, which would be YouTube/Google. I've only ever seen that number in secondary sources like in news reports. I don't know if it's real.

I went looking in the partner program policies document just now to find this number and.

I could not.

Perhaps it is buried in some giant terms of use contract that I signed without reading. I'm not trying to accuse YouTube of anything. I'm just telling you that I tried to verify that 45,55 split number with the primary source and I could not. I'm not sure it's real, but it sounds plausible. Is it reasonable? People argue over that a lot. If you figure that YouTube is acting as your agent in these advertising deals, they're acting as your talent representative, right? A 45% cut for an agent is a gigantic cut compared to other older industries.

Like if you're an author and you have an agent who brokers your book deals with your publishers, if you're an actor and you have an agent who books roles for you, if you're a model and you have an agent who books fashion shows and photo shoots for you, those agents generally take somewhere between 10 and 20% of your earnings assuming that you're not being totally hosed by your agent or manager, the way lots of musicians were in the early days of rock and roll for example.

Don't worry, Lttle Richard. Yes, you're only 19 years old and uneducated. And you grew up in a shotgun shack on the backside of Pleasant Hill in Macon, Georgia. You're a young queer Black man in the Jim Crow south. And your father was just murdered and you have 12 brothers and sisters and you're the oldest who isn't away fighting in Korea and you're currently washing dishes for a living at the Greyhound bus station downtown, where you wrote your first hits as you scrubbed burned beans from the bottom of pots and you're a racist white boss yelled at you.

Don't worry, Richard, "Even though you have absolutely no power in this situation, I, a White record company owner named Art Rupe, I'm going to take good care of you, Little. Richard.

Just sign on the line and I'll take all your publishing rights for Tutti Frutti forever.". Guys like Little Richard got bad deals. If you get a good deal with an agent or a manager, generally you pay that person 10 to 20% of what you make depending on the industry. So compared to those historic roles, the 45% cut YouTube is purported to take, that seems unjustifiably huge, but again, I'm not sure it's a perfect analogy. If you're the talent, YouTube isn't just your agent. They're also the venue where you're singing your songs, right? They own the stage and they're promoting your concert too, via their algorithm. Again, going with the music industry analogy, YouTube is your agent, the promoter and the venue all rolled into one. Those roles have historically been kept separate in the entertainment industry for a reason, probably not great for one entity to have all of that power.

But anyway, in my opinion, YouTube's 45% cut is fine, I guess. Assuming that is what it is. They own the whole shebang. They host my videos. They promote my videos. They sell ads against my videos that involves having a massive sales team that handles all the contracts and deals with difficult clients, with unreasonable expectations and all of that. And then they physically position the ads around my videos. I don't have to do a single thing.

It's not like in the olden days of TV and radio, where you would actually have to make room for the commercials in your show, build the whole show around the commercial breaks. And then you'd have to have a master control center staffed 24-7, where people load up the commercials and hit the button at just the right time to roll the ad. It's not like that anymore.

I do absolutely nothing.

They just roll the ads whenever you

Click on the videos.

And several weeks later, YouTube transfers money into the bank account of Yellow House. Media, LLC, the company that Lauren and I own. If 45% is excessive, somebody else should come along and beat YouTube at their game and take a smaller cut, thereby attracting better creators.

I'm not actually that naive about market capitalism by the way. I understand that YouTube/Google is probably a monopoly at this point. And one of the biggest flaws of true free market capitalism is its inability to deal with monopolies. I believe in market economies, balanced by strong regulatory and welfare states. That basic model has clearly proven itself to be the best at providing the most prosperity to the most people. All the places where people want to live do basically that, including arguably the United. States, even though neither extreme of the US political spectrum would like to admit that the US is a market economy balanced by relatively strong regulatory and welfare states. But I think it is.

Wish some of the aspects of the state were a little stronger and some of them are a little weaker. I don't know. That's what I think about that. If anyone cares what Adam believes about such things, which you probably shouldn't. I'm just a monkey with a microphone. Anyway, that's the basic way that you make money from YouTube. There are other ways which I will talk about in detail soon. This is a single topic episode of the podcast, by the way.

I'm just talking about money for an hour. But sticking with the YouTube partner program for a moment, everybody wants to know how much money do you make from a video with a million views. That's a big hit on YouTube. It's not a 10 times platinum record, but it's a gold record. It's a bonafide hit. How much money do you make from a video with a million views? Well, unfortunately it really depends. It depends on how many views exactly, how long the video is, how long people actually watch it, the extent to which you have a channel that advertisers actually want to be on, which probably hinges on your viewer demographics more than anything else. Do people with disposable incomes watch your channel? It depends on the season.

YouTube partner program income is highly seasonal. Right now, late summer this is the doldrums. Viewers are down. Money is down. I think in part, this is just because now is when all the people who buy and sell ads are on vacation or they're thinking about going on their vacation or they're getting back into the swing of things after their vacation. But anyway, the amount of money that you make from a million views, whatever it is, it is probably a lot less than you would imagine. It's not a perfect example because it doesn't have a million views yet, but it's a recent example so let's go with it.

My video from Monday about weightlifting and

Cooking and the epistemological and rhetorical problems common to both of those areas of human endeavor, that was a different kind of vid for me, bit of a risk, but for whatever reason, people seem to really want to click on it.

 

And it was my biggest hit in several months. As of this recording, it's been up for five days, it has 634,000 views. The trajectory always flattens out a lot after the first couple of days. So it's going to be a few months before it hits a million, but it'll get there. That video is almost 19 minutes. It's on the longer side for me, for sure. Average view duration is about seven minutes. Some people watch it all the way through, some people bail after the first 10 seconds.

They all average out to seven minutes actual view time per person. Total view time on the video is 76,000 hours collectively spent by people all around the world, watching this single video of mine, 76,000 hours. That's higher than usual for me, about 30,000 higher than a typical vid for me. And how much have I made from this hit video so far from the YouTube partner program? I've made about $2,000. Now that may sound like a lot or a little to you. I don't know what your situation is. I have to take a second to remind myself how much money that is. Back when I was full-time university faculty, my take home pay after taxes and health insurance and all that was about 3000 a month.

So for me to spend two and a half days making one video, that's made two thirds of what. I used to make in a whole month of full-time labor, that's pretty freaking amazing. Of course, that's an apples to oranges comparison because I do still have to pay taxes on that 2000 and good Lord do I pay a lot of taxes now. And it's so much worse because it's not like back when I worked for the university and they would withhold my estimated taxes every month, right? That's generally what happens when you work for a large employer, they withhold your estimated taxes every month. So you never even see that money. And then at the end of the year, you file your taxes and usually you get a little bit of money back because you usually overpay a little. That's how it is for most people with normal jobs in the United States. Tax day is actually a good day because that's when you get the money back.

Now, because I own my own company, there's no one withholding my earnings to pay my taxes. We actually sit down and write checks to state and federal governments, big checks. And when you do that, it feels like you are cutting meat straight out of your own beating heart. I will reiterate that my bigger brain is quite happy to pay taxes. I am broadly supportive of the project of government, et cetera, et cetera, but it still hurts to write those checks. And I do still have to buy health insurance for my entire family on the individual market now. I'm not on the university's health plan anymore. Our health insurance costs well over, I think, $1,200 a month for bare bones coverage for two adults and two kids because of this country's trashcan healthcare system.

We still pay out of pocket for nearly all of our healthcare.

The insurance is really just in case

One of us gets really sick or badly injured.

Again, that's what we pay $1,200 a month for.

And it was more back when we lived in Georgia, I think it was 1,500 a month. So now that $2,000 for a hit video is sounding like not so much money. Most of that just goes to health insurance. But the best thing about the YouTube economy is that when you make a video, you don't just get paid one time for it. As long as people keep watching that vid, it keeps paying you.

And if you make a video or two or three every week, like I do, and if you make quality content that people will want to watch for years to come as hopefully I do, all of those little itty bitty numbers, start to add up to some big ones, right? At this point, I've gotten more than 400 videos in my catalog, and they're all making a little money for me all the time to the point where our collective net worth, me and Lauren, our net worth did recently cross over into seven figures.

If you include our home equity and other non-liquid assets like that, stuff other than cash in the bank, we are now technically barely millionaires. Going from a net worth of basically zero four years ago when I first started YouTubing seriously, that is freaking amazing. Amazing. And I thank you all so much for that. And if this ever happens to you, I'll be excited for you. But I also want to tell you to take a moment and curb your enthusiasm. It's maybe not as awesome as it seems, because it is very, very fragile.

Any business is fragile when it relies on personal popularity. Highly unstable, that is. People love you one sec, they hate you the next. Or even worse, they just forget about you. And they move on to the next person who captures their attention. It's also highly unstable to have a business that relies entirely on another business, especially one as giant and consequently indifferent to your individual needs as Google is. That's not an indictment of Google in particular. That's just the nature of any giant company.

Alls it takes is for one Google executive to change one policy or one Google engineer to tweak a single line of code. And all of a sudden, nobody sees my videos in their feed anymore and my livelihood vanishes overnight. And I would have absolutely no recourse in that event. All it takes is for the next thing to come along and displace YouTube just as YouTube displaced the TV, that's already happening to some extent, right? I don't think the TikTok style short form fad is just a fad. I think it's here to stay for a while and YouTube is in on that revolution, but it's not at the center of that revolution, TikTok is. Working as a YouTuber is not like working for the port authority or whatever. I can't count on being able to do this until I retire at which point I get a pension. No, I have to go super hard while I can, save every penny I can, and then invest those pennies wisely.

I've had to start learning about investing, even though I find the topic somewhat unappealing, but to be a responsible breadwinner for a family, I have had to learn about this stuff. I got your basic retirement and college accounts going, but it's good to diversify in case stocks tank, which has definitely been the case so far this year. Thus, I have been intrigued to learn about the sponsor of this episode, Masterworks. Masterworks is a company that allows individual investors like me to invest in the contemporary art market, a market that is remarkably stable and relatively independent of stocks and bonds with a correlation of less than 0.3 to other major asset classes. And unlike crypto or nonsense NFTs or whatever, Masterworks deals in pieces that have actual value, not just aesthetic value, but as a financial tool.

In fact, according to UBS, two thirds

Of millionaires and billionaires invest in art already as a means to diversify and hedge against inflation.

Problem with the art market is that someone like me does not have tens of millions of dollars to buy a Banksy or a Basquiat. This is where Masterworks comes in.

This is a company started in 2017 by a top art collector and some tech entrepreneurs. They have the only art market database drawn directly from physical auction catalogs, which they use to pinpoint pieces they think will appreciate in value over time. They go to the securities and exchange commission and securitize the artwork. And then people like me just go to the Masterworks website and buy shares. They hold the art for three to 10 years and then sell when they get the best price. So far, they've sold six paintings for an average net return of 29% to investors. If you're just dipping your toes into investing, this might not be the right thing for you at this time, but if you've already got your standard 401K or whatever, and you're looking to diversify, check out Masterworks. Historically, art has done particularly well over the long haul.

It has significantly outperformed the S&P 500 over the last 25 years and appreciated more than gold, the S&P, real estate, last time inflation was this high. Of course, past performance is no indication of future results, but Masterworks is legit. Look them up, check them out. It's almost unheard of to see 29% returns over so short a timeframe, especially in a market as volatile as this one. See if this might be the right diversification option for you. Go to masterworks.art/ragusea, that's in the show notes or in the description if you're watching this on YouTube.

So that was an ad from a sponsor that I'm very grateful to have. Ads that I read are different from the ads that YouTube plays around my videos. Let's talk now about how all of that works and firstly, why I do it. The YouTube partner program has been very good to me so far, but there are many problems with it. When I was first getting started, when my popularity on YouTube first exploded out of nowhere, I was getting great views on videos, but as we've just discussed, you don't get a lot of money for great views on a few videos. I was getting checks of 200 or 300 bucks a month, which I should say was life changing at the time. We were really, really struggling. We had two tiny children, some serious medical expenses, a mortgage, my university job and the random freelance journalism jobs that I picked up here and there that was not quite cutting it.

We were starting to finish our months in the red and a couple of hundred bucks from YouTube every month stopped the bleeding. The feeling of relief was overwhelming, but I was also totally killing myself, trying to make two YouTube videos a week and work my full-time university job. And that could not last. I saw a better brighter future for myself on YouTube. So I wanted to see how much I could maximize my income from there. And the money was growing every month. YouTube money is all about building that cumulative catalog of videos that all make a little bit of money for you every day.

It was growing, but it still wasn't

Enough.

And that is when Colin "The Best"

West found me.

The thing about success on any social media is that it's totally public success. There are websites like Social Blade that aggregate publicly available data about who's getting a lot of clicks on the internet. And so when you start getting a lot of clicks, people know, and they start trying to find you. And most of those people are blood sucking parasites, and you should run far, far, far away from them. People come to you with all kinds of deals and promises that I can only imagine how badly. I would've been duped by had this happened to me in my teens instead of in my late thirties, which is when it did happen to me. But Colin was neither evil nor stupid.

And I liked his accent. He's super Scottish and super Canadian all at the same time. And Colin said that he could get me some in video sponsorship deals and this appealed to me for many reasons beyond the obvious. One, these were flat deals. I would get paid X dollars for doing the ad in the video. It's a one time payment. I get paid the same whether or not the video is a hit. So it's a kind of income that is very different from partner program income.

And it is therefore highly complimentary to the partner program income. In periods when my partner income is down, my sponsor income is the same. As a person who is older and has serious responsibilities that kind of stability was and is very important to me. It's also more stable because we ink these sponsorship deals months in advance, sometimes a year in advance. I know what's coming on my sponsorship schedule. And while all of that income depends on my delivering views on YouTube, it does not come from or through YouTube. Colin's company, Solaro Management, does the deals. Handles the paperwork, collects the money, wires me my share.

And their share is considerably more reasonable than YouTube's 45%. And three or four years ago, there weren't that many companies wanting to do that kind of advertising with people like me. It was really just a handful of sponsors and me and Colin did a couple such deals every month, but it was enough that I was now at that point, making more money YouTubing than. I was teaching in college. And that money was about split evenly between in video sponsorships versus partner program income. And that continues to be the basic split to this day. I get about half of my money from the partner program, half of my money through Colin. And that's where we were.

It was still kind of modest three and a half years ago, but the trend lines were pointing up and that's when I decided to quit my day job. Summer 2019, I believe it was. I was still under contract to teach the coming academic year.

Mercer University was super cool and they

Only made me teach in the fall semester.

That was the most stressful few months of my life, but I got through it. And since 2020, I have been doing this and only this. And all the while the list of companies who want to do sponsorship deals with someone like me, that list of companies started to grow and grow and grow. There was a brief moment when Covid first hit when the market faltered.

We had some brands cancel their spots. We got a little scared for two seconds, but then it rapidly became clear that as God awful as the pandemic was for everyone collectively, it was actually quite a boon for many of the kinds of companies that place ads in videos like mine, companies that sell stuff over the internet. People were trying to stay home and not go out to stores and expose themselves to the virus or expose others to the virus. And that was good. And they started to buy way more stuff online instead. And companies that sell stuff online needed to advertise their products somewhere and some of them came to people like me. There are challenges to doing ads inside your videos, the first being that you have to make them. I have to make good, interesting, fun to watch, persuasive commercials in addition to making fun and informative videos.

That's a lot of extra work. Also, if you're going to stop in the middle of your video and do a commercial for 60 seconds, you have to earn it. You have to give people a video that's long enough and more importantly, substantial enough to where the ad feels proportionally reasonable, reasonably small. As much as everybody loves TikTok style, short form vids these days, they are very hard to monetize because they aren't big enough to earn a commercial. Audiences will not tolerate a one minute ad in a two minute video, nor should they. So I've had to make sure that all of my videos are pretty big and meaty, and that gets exhausting sometimes. Actually it's exhausting all the time. I am so, so tired right now.

So tired. You might say, "Hey Adam, you've got a successful thing going, you're making great money. Just hire some people. Hire some people to help you. Hire some editors and researchers. And then you won't be up recording podcasts at 12:30 on a Friday night like you're doing right now.". Well, maybe I will hire some help one day, but I have been hesitant to, because I remember. MC Hammer, Behind the Music on VH1.

MC Hammer got real popular all at once. He figured the good times would roll on forever. And because he was a man of generous spirit, he hired all of his friends. Some for real jobs, some for largely theoretical jobs. And he built himself a giant golden mansion on a hill and then came the second half of that particular episode of VH1, Behind the Music.

If your livelihood is based on lots

Of people liking you, you have to think of yourself like a professional athlete.

Yeah, you might be making real good

Money, but you cannot play football forever the way that you can work at a bank for 40 years and then retire.

You can play football for maybe 10 years and then your body will be spent.

You have to make and save a ton of extra money in those 10 years because you have no idea what comes next. I suppose maybe YouTubing is a little bit more like being an actor in Hollywood. You can act for 40 or 50 years. It's just unlikely, especially if you're a woman unfortunately. But this is why screen actors unionized and fought so hard for residuals. Actors get paid a share of the money that continues to be generated when people continue to watch that movie that they made decades ago. On the one hand, that system seems unfair. It seems unfair that the actor gets some residuals while the lighting person or the sound person doesn't get residuals.

They just got paid a flat fee. But if you're a good lighting person and you're not a jerk and people like working with you, you can probably count on a long and fruitful career. An actor cannot. Most can only act as long as they stay young and pretty which isn't long. So residuals. There's a lot of people in retirement communities around Southern California, who will tell you thank God for residuals. The fact that my old videos continue to make money for me on YouTube is kind of like residuals. It is great.

It gives me hope for our future, but still, even when I just take a week off for summer vacation like I did in July, I see my monthly check from YouTube dive. So much of my income is driven by the new videos I pump out. I think the new videos play a crucial role in leading people to the old videos. If, and when I stop making videos entirely, I won't be surprised if income from the back catalog is virtually gone, dried up within months. The algorithm God must be appeased with an offering of new content. I don't want to hire someone because I don't want to be responsible for another person's livelihood. When what I do is so inherently unstable and I want to keep as much of the money for myself as possible because I need to save it. And in the scheme of things, it's not that much money.

Getting a million views on YouTube is not like MC Hammer selling a million records. Selling a million records, made a lot more money because people paid for records. Gather around the fire kids. Let old man Ragusea tell you a story. People used to walk into stores and pay for music. $15 for a compact disc containing only a dozen songs or so. When MC Hammer sold a million records, that meant $15 million. He didn't get all 15 million.

As I understand it, a good artist deal at that time in the nineties would maybe result in the artist getting a dollar a record, but that's still more than a million bucks for.

MC hammer for two gold records.

And he had more than two. In contrast, a million views on YouTube only makes me a few thousand dollars. A few more thousand dollars when you add in the in video sponsorship that Colin brought in. That's great. That's awesome. It's so much better than a real job.

I know I've held several. But it's comparatively modest money and I'm not about to start making it rain in the club like someone who's very, very popular in the movies, right? It's not that kind of fame. It's not that kind of success. I'm certainly not about to hire half of my buddies from high school. I really, really, really worry about young YouTubers I see out there who have clearly hired half their buddies from high school. I wish that I could make these young people watch some old VH1, Behind the Music episodes. I'm sure the MC Hammer one is on YouTube. You should watch it.

But maybe that's my generational trauma talking. I am an elder millennial. I've seen some bad times economically. And I started out in music, a once proud and lucrative industry, all but wiped out in a few years. Then I worked in journalism, a once proud and lucrative industry, all but wiped out in a few short years. I'm like a depression baby. I'm like Grandma who literally lived through the depression. I still have the coffee can full of pennies she saved.

Wheat pennies. US pennies, our lowest value coin, they used to have two heads of wheat on the back to symbolize the agricultural abundance of this great land. Old pennies are wheat pennies. Grandma collected wheat pennies on the assumption that they would be worth slightly more than 1 cent as collector items. And she had them in a giant coffee can that is now on one of my bookshelves. And she never threw anything away because she lived through some seriously rough times. I've lived through some, not so rough, but still kind of rough times. And I am therefore totally convinced that all of this will collapse at any minute.

So I keep pushing and I keep trying to diversify my income. And that's part of why I'm doing the podcast at this particular instant. Yes, the podcast is on YouTube, but a growing number of people are listening to it on podcast apps.

And thus, I now have a tiny,

Teeny, tiny little income stream that is completely independent of youtube.

And that is very important to me.

And podcasts are long, way longer than YouTube videos. So I can earn the right to have more than one sponsor per episode such as Trade Coffee, also a sponsor of this episode. Man has Trade Coffee gotten me through some absolutely exhausting late nights editing stuff.

Like the late night editing session that I'm about to begin in about 15 minutes when I go to start editing what I'm shooting right now. As I continue to grind and grind in the sheer terror that all of the audience and sponsorships. I've built over the last four years will crumble overnight. Trade has stuck with me for a while, both as a supporter of my content and as a provider of my coffee. I wasn't a coffee drinker until pretty recently and it has brought so much new joy to my life. It's never too late to get into this wonderful, magical elixir called coffee, but you may need a guide if you're new to coffee and Trade is here to hold your hand as they held mine. You go on their website, you take their quiz, you tell them how you take your coffee, you tell them what kind of flavors you like It's okay if you don't really know, Trade will select stuff for you. Not stuff that's down in some warehouse of surplus coffee that they bought for no money and they're just trying to move the product.

That's not what Trade does at all. Trade goes out and finds the best, most exciting independent coffee roasters out there. And they partner with those roasters. And then they have one of those roasters send you a bag with something top quality, super fresh, and totally right for your tastes. My trade subscription helped me learn that I like really light roasts, low temperature roasts because they preserve a lot more of the character of the bean. And roast level has nothing to do with strength. You can still brew an extremely strong cup of coffee with a light roast. And I intend to in about 14 minutes.

And I like brighter, more acidic coffees, which is kind of unusual, but I'm not alone in that. And so Trade worked with me to create a collection. Adam Ragusea's tart faves. That's the name of the collection. If you want, you can just subscribe to my collection at drinktrade.com/adamshow. It's pretty awesome I must say. Or browse other people's collections if you're more into dark, toasty coffee or sweet, nutty coffee or whatever. You do you.

Or you can just take their coffee quiz and they'll basically make the you collection. They'll send you what you like, expertly matched. They have a whole team of professional tasters. So if you want to support small businesses and brew the best cup of coffee you've ever made at home, it's time to try Trade coffee. Right now, Trade is offering my listeners a total of $30 off your first order. Plus free shipping at drinktrade.com/adamshow. That's drinktrade.com/adamshow.

Link is in the show notes/video description.

 

Thank you, Trade Coffee. And I think that you, dear listener should take a moment to thank every sponsor, every individual contributor, every person who makes your favorite content possible. People who make the things you consume need to be paid. And if you're young, if you're say under 30, you might not have had the experience that all of us elder, millennial and gen Xers have had where we had things that we loved. Music, novels, comic books, TV shows, movies, magazines, newspapers, things that brought us so much joy, things that helped us make sense of our world and endure our world, things that made our lives worth living and then we watched as the economies that supported these things broke like waves against the cliffs of the internet.

Some people can still make a living in music, but not many. And almost no one can make a living making records. Touring is really the only way now.

There were people who just used to make records. Making records was their whole job. Recording artists they were called. And engineers. There aren't many of them anymore. And yeah, I'll say it, records aren't as good anymore. It should come as little surprise. People got to get paid to do good things.

And no one should have to apologize for demanding that they be paid for making things. The collapse of the music industry is what breaks my heart the most. But I think the collapse of the journalism industry is what matters the most. We still have national and international reportage. That's not going anywhere. I do not weep for the disembowelment of Newsweek and other publications that pretty much duplicated the work of a hundred other national or international publications. I weep for local newspapers. Small town, local papers.

They are gone. And people have been able to duplicate some of the functions of local newspapers pretty well with social media. There's this scandal going on in my neighborhood right now, where somebody cut down a bunch of trees that they weren't supposed to cut down and everybody is up in arms about it. And without the help of any local journalist, I've gotten a pretty good sense of what's going on with these stupid trees. Who's responsible, why it matters or why it doesn't matter and what's probably going to happen next. I've got all of that sense simply by reading the drama in the neighborhood Facebook page. Some of the old functions of local papers people have managed to do on their own better than I would've predicted. At least in those neighborhoods prosperous and politically connected enough to be able to keep themselves informed.

But the thing that absolutely terrifies me is all of the county commissions and city councils and state legislatures conducting the people's business day in, day out with no reporter in the room, not a single one.

Where there used to be a whole

Line of reporters.

And if there's no reporter in the

Room, bad things happen.

When there is a reporter in the room these days, it's usually a child. And I say that with love to all of the children I helped train in journalism when I taught journalism for many years. Y'all were great, but y'all know that you were no replacement for the reporters who used to cover those meetings in the olden days. Decently paid, respected professionals who had every incentive to stay in their jobs for 30, 40 years covering the same damn state legislature year after year, session after session, getting to know all the players, getting to know how the game is played. Often knowing the game better than the legislators actually playing it.

Those people, those reporters are just gone. And now God knows what all of those legislators and city counselors and county commissioners are doing without a reporter in the room to keep them on their toes. It's just a tragedy. And I still hurt from having to watch that proud industry burn to the ground. How many quote, unquote, retirement parties I attended for reporters at places like the. Macon Telegraph. How much smaller each party was compared to the last and how eventually we just stopped having parties. People about my age and older, we watched so much of what we love and value just fall to the ground and shatter into a million pieces because the supporting economies vanished.

I tell you this because I want you to join me in being grateful for the economics that currently supports the things that we love and value now. I want you to join me in getting a warm feeling of comfort and security when I have to wait through two ads before I can watch the video I clicked on. That wait is so much better than the alternative, which is no video. The YouTube economy has a lot of problems. It does not work for everyone. It does not work for smaller creators, people with subscribers in say the tens of thousands, there needs to be extra money in the system to support creators at that level of their development. Because, as I've just laid out for you, there's surprisingly little money in that level of viewership. I want a YouTube that rewards and develops talented people who don't have the outside resources necessary to bankroll their earlier years on the platform.

I'm tired of hearing from such people I want to hear from everyone else. The YouTube economy does not work for people who make content that is subject to capricious or otherwise unjust demonetization. I'm really lucky that I just happen to get big on YouTube with food content because food content is pretty safe. But even then I've had videos demonetized. I made a video about a year ago, one of my favorites I've ever done that was about the very, very old Southern United States practice of eating white dirt they call it. Kaolin, kaolin clay. This pure white clay used in pharmaceuticals and cosmetics. People have eaten Kaolin in the American south for generations.

Mostly poor, rural, women, mostly Black. Scientists have speculated that this might be a craving resulting from mineral deficiencies in poor diets, particularly during and after pregnancy. There are corresponding earth eating practices documented in Africa among other places. I made a video that talked about all of that, talked about eating Kaolin and I ate some kaolin in the video and YouTube demonetized the video because it's supposedly advocated a dangerous or unhealthy practice. Never mind that I went in into some detail on the health risks associated with eating kaolin, it tears up your teeth over time, it potentially causes intestinal blockages over time.

I talked about that.

And nevermind that plenty of the foods in the grocery store are probably just as hazardous to your health over time. Some underpaid functionary at YouTube with a set of totally reasonable standards to enforce, looked at my video and made the wrong snap decision.

And I made $0 from that video. $0 from the partner program, I should say. I did have an in video sponsorship, and that is another reason why I do those. Other people on YouTube make good and important content that gets unjustly demonetized far more frequently. And the YouTube economy does not work for them. It does not work for people who make videos about music, people who are analyzing music, criticizing music, talking about music history. It doesn't work for them because the Content ID system allows record label bots to just steal your money. Even if what you're doing fits squarely within even the narrowest definition of fair use.

The YouTube economy does not work so well for those kinds of creators. But in general, the YouTube economy is a pretty robust organism. The ecosystem it supports is pretty exciting to me, not just because I live in it. There are so many people doing really outstanding things on YouTube these days. Stuff that is way smarter, way weirder, way nerdier, way more niche than anything TV ever would have paid for. The YouTube economy is paying for that. In the early days of podcasting 10 or 15 years ago, I listened as my friends from radio started making really cool shows, stuff that was way smarter and freer and more fun than anything anyone would ever let them put on the radio. And I just thought it was a lark, but then one day somebody had an actual ad in their podcast.

A real company paid real US dollars to place a message in a podcast. Slowly, slowly I kept hearing more of those. And every time I did, I pumped my fist. Every ad was a victory. Even though I wasn't getting any of that money, I was just so excited to hear ads in podcasts because it meant that podcasts could continue to exist. Rejoice in that knowledge. Rejoice knowing that people who make things you love are getting paid.