The Yellow $: a comprehensive history of demonetization and YouTube’s war with creators

YouTube was born more than a decade ago with the intention to give a growing online audience a seamless interface in which to upload video — a catch-all that would be defined a few years later by limitless possibilities and star-making qualities.

In 2017, Google’s reported earnings were upwards of of $100 billion, a number that company executives credited in large part to YouTube’s platform advertising. And yet, the early lure of freedom and monetization offered to content creators, a promise that turned YouTube into an unrivaled platform, is today threatened by an advertising sea change.

In the last 12 months, YouTube has faced a mountain of problematic trends to ward off: disturbing children’s content, terrorism videos and the spreading of conspiracy channels, and new breeds of video content we’re only starting to see. Caught in the combat are the creators, deprioritized by a company that’s transparent about its ambition to be a destination for Hollywood-approved video content safe enough to lure cable’s biggest advertisers.

”Demonetization” is the YouTube community’s word of the day, the year, and the future. If creators can’t monetize their videos, it becomes increasingly more difficult to earn a living from making videos full-time. The first big testimony that YouTube’s “ad-friendly” policies would affect creators came from pundit Philip DeFranco in August 2016, but to really understand demonetization woes, time needs to be fast forwarded by about six months.

To best understand how the current demonetization era came to be, and the recurring “adpocalypse” creators have suffered, we need to examine February 2017.

Hate speech, PewDiePie, and the demonetizing quick fix

On Feb. 9, 2017, The Times in London reported that YouTube was supplying ads to videos from terrorist organizations and others that spouted hateful content. Throughout the next month, major advertisers in Europe and the US, like AT&T, Verizon and Pepsi, threatened to pull ads from YouTube after they were discovered running alongside “content such as videos promoting terrorism and anti-Semitism,” according to TechCrunch.

Instead of ads being randomly placed on videos, YouTube and advertisers would work together to ensure that top ads got placed on specific type of content or creators. That meant if a company like Audi only wanted advertisements placed on family-friendly videos, a large portion of creators could lose out on that potential advertising revenue.

Philipp Schindler, Google’s chief business officer, addressed advertisers’ complaints in a blog post on Mach 21, announcing YouTube’s commitment to “put in place changes that would give brands more control over where their ads appear.”

“Recently, we had a number of cases where brands’ ads appeared on content that was not aligned with their values. For this, we deeply apologize,” Schindler said. “We know that this is unacceptable to the advertisers and agencies who put their trust in us.”

Ariel Bardin, YouTube’s vice president of product management, addressed the changes that Schindler spoke about in her own creator’s blog post.

“There’s a difference between the free expression that lives on YouTube and the content that brands have told us they want to advertise against,” Bardin said

Videos produced by iconic, legacy creators would soon come under fire, too. On Feb. 14, the Wall Street Journal reported that a January video from Felix “PewDiePie” Kjellberg included anti-Semitic imagery and language. Kjellberg was, and remains, YouTube’s most popular creator. At the time of the report, he was working on his own YouTube Red series, Scare PewDiePie; Kjellberg received Google Preferred ads (top-tier ads reserved for YouTube’s most popular creators); he was a constant fixture in YouTube’s annual rewind video. He was untouchable.

Following the Wall Street Journal’s report, however, Disney’s Maker Studios and YouTube cut ties with Kjellberg. He was released from Maker’s team, lost his YouTube Red series, and was kicked out of the Google Preferred program. Kjellberg quickly became YouTube’s villain among mainstream press, and a legend in the viewer community.

The swell of advertising infringement forced YouTube to introduce new policies, which included a tougher stance on hate speech, giving advertisers more control of where ads were placed, and safeguarding creators in the YouTube Partner Program. Bardin ended her post by discussing the relationship dynamic between advertisers and creators moving forward; an experiment with major, unforeseen consequences.

“Advertisers have to feel confident their ads are only appearing where they should,” Bardin said. “Although ad restrictions can feel limiting, they’re essential to protecting the livelihood of creators ... today’s measures will help ensure the virtuous cycle between creators, fans and advertisers remains strong for years to come.”

Creators could read between the lines. Changes were coming.

The first adpocalypse

YouTubers felt the effects of demonetization by the first week of April 2017. Popular creators like Kjellberg, H3H3 Productions’ Ethan and Hila Klein, and Philip DeFranco, who saw YouTube’s evolving ad policies coming as early as August 2016, all complained about the noticeable dip in revenue they saw. YouTube’s new policies now allowed advertises to opt out of advertising on certain videos. A commentary about a recent tragedy, for example, could be cut from a creators’ list of ad-friendly content. The future demanded placating advertisers, a risk for someone like DeFranco, whose brand revolves around unfiltered, news commentary.

On March 30, DeFranco posted a video talking about the monetization hemorrhaging, arguing that while he understood why YouTube and advertisers were going on the defense, it was going to get much worse before it got better. He said it was the newer creators who were getting a couple hundred thousands of views on their videos, and were working paycheck-to-paychek, relying on AdSense income, that would feel the brunt of it. A couple days later, DeFranco posted a video on April 11, 2017 speaking about the adpocalypse’s personal affect on him, testifying he initially saw an 80 percent drop in revenue.

DeFranco added that even after part of the model was fixed, “it’s still about a 40, 50, 60 percent drop.”

“There’s a bit of a panic; a bit of a ‘we’re going to have to evolve how we do things, how we fund things to continue living,’” DeFranco said.

Ethan Klein spoke about it a little later, suggesting that new guidelines designed for advertisers resulted in many YouTubers not receiving ads at all. Klein called out YouTube for the lack of communication between creators and the company over how advertisers’ guidelines now operated.

On April 28, “Marissa,” a community manager for YouTube, posted an update on the situation for creators, acknowledging the frustrating circumstances they’ve been working under for the past month.

“Advertisers are noticing the improvements we’ve made and, as a result, our conversations with them are more positive,” she said. “For many creators, this means their revenue is improving. There are still creators, however, who continue to see an impact on their earnings. Please know we are working as fast we can to address this situation.”

By May, most YouTubers began referring to the period as the “post-adpocalypse.” Revenue was still fluctuating, but YouTube representatives told creators like DeFranco that a solution was being designed into the algorithm to hopefully lessen the number of demonetization cases. More good signs for the company appeared just over a month later; in a June blog post, Bardin, YouTube’s aforementioned vice president of product management, alluded to an influx in advertisers.

It was a positive moment, but short-lived. Bardin acknowledged there was more work to be done with the community; like ongoing problems with videos unreasonably being demonetized or not monetized at all.

“We know we have to improve our communications to you, our creators,” Bardin said. “We also need to meet our commitment to our advertisers by ensuring their ads only appear against the content they think is suitable for their brands.”

Improving communication to its community has always been one of YouTube’s biggest problems.

Advertising policies kept getting changed, and creators often didn’t find out until much later. YouTubers wanted to better understand why their videos were being demonetized. YouTube eventually came up with a product the team believed would help, but the solution was torn apart by the community.

The yellow dollar sign

On Aug. 17, a post on the Creator blog introduced an emblem for demonetization. “Over the next few weeks, we plan to roll out new icons that will give you a more detailed understanding of how each and every video on your channel (or channels) is monetizing as well as the ability to appeal if you think a video is misclassified,” a blog post reads. “We want our systems to get better and better — and every appeal helps.” Soon, dollar sign icons appeared in creators’ video manager. If the sign was green, the video received ads. If the sign was yellow, it didn’t.

The yellow dollar sign became a meme among YouTubers, though the ironic thrill was quickly curtailed by the bigger issue. Creators could now see how many of their videos were being demonetized, a droning reminder of their monetary battle with YouTube, and the appeals process, which also became prominent among the YouTube community as creators demanded their videos be reviewed for ad potential, also became a joke.

“When you request a review (e.g. appeal the current monetization status), the video gets looked at by an expert reviewer (not a computer) who spends time watching the video and reviewing the video’s content, title and metadata against our advertiser-friendly content guidelines,” Marissa, the aforementioned community manager, said in the Sept. 5 blog post. “We know these reviews are important to you and your revenue, so we strive to review as many videos as humanly possible, as quickly and accurately as possible.”

YouTube’s messaging irked a large portion of the community. Lesser known creators (who would become a bigger part of the demonetization conversation in early 2018) would not get their videos reviewed as quickly. YouTube instituted a temporary high priority list to address more notable creators’ concerns first. The blog post read:

Right now, our team of expert reviewers look at appealed videos with more than 1,000 views in the past 7 days ... We do this because we want to make sure that videos from channels that could have early traffic to earn money are not caught in a long queue behind videos that get little to no traffic and have nominal earnings.

Not only were members of the community upset that the algorithm seemingly struck down any video that was uploaded, but now human reviewers at YouTube were favoriting bigger channels. As time went on, however, and the team managed to wade through appeals, things were looking up again. New announcements from YouTube regarding changes to the algorithm, including a 30 percent decrease in creators being demonetized on their videos gave creators hope. An updated version of the algorithm that was responsible for dinging so many creators’ videos rolled out at the end of October. It was a big moment for the company. Engineers said in a blog post that the update would see “a 30 percent reduction in the number of videos receiving limited ads.”

“In other words,” they emphasized, “millions more videos will become fully monetized.”

It was the first time the community felt like they could breathe, but after being burned for so long, they took positive updates with a grain of salt. No one was prepared for what the next few months would wrought on YouTube.

The second adpocalypse

Investigative reports from the New York Times, The Verge, The Guardian and a Medium piece that went viral, unveiled an alarming number of disturbing YouTube videos targeted at children. Comment sections on videos that starred children were full of predatory language. When it became clear some of these videos were monetized, YouTube found itself staring down the barrel of another adpocalypse. To try and keep advertisers happy, CEO Susan Wojcicki initiated an even more aggressive approach to advertising.

“We are planning to apply stricter criteria, conduct more manual curation, while also significantly ramping up our team of ad reviewers to ensure ads are only running where they should,” Wojcicki said in a blog published on Dec. 4. “This will also help vetted creators see more stability around their revenue. It’s important we get this right for both advertisers and creators, and over the next few weeks, we’ll be speaking with both to hone this approach.”

Wojcicki added that neither creators nor advertisers can “thrive on YouTube without the other,” and addressed concerns from the community that they would have to prepare for another financial overhaul. Wojcicki said the team would “limit inaccurate demonetizations while giving creators more stability around their revenue.”

Creators relented that YouTube needed to fix its issues with children’s content, and begrudgingly accepted things had to change while YouTube executives and engineers worked on the problem. It was easily YouTube’s darkest moment. Yet, somehow, the nadir had yet to be reached.

Logan Paul

During a trip to Japan’s Aokigahara Forest in Dec. 2017, Logan Paul, a Vine star turned YouTube entrepreneur who became one of the most popular vloggers, came across the body of a man who committed suicide. Paul recorded footage of the man’s body as part of his daily vlog, and on Dec. 31, uploaded a video depicting his encounter.

The internet unleashed mass outcry in the days that followed, leading to Paul stepping back from the platform for three weeks. YouTube removed Paul from Google Preferred, and put a hold on his YouTube Red series just over a week after the video was published. Paul would go on to receive further consequences from YouTube’s team, and other creators suffered alongside him.

YouTube announced the biggest changes to its monetization methods a few weeks after the initial Paul shock; namely which creators were eligible to be paid at all. Robert Kyncl, YouTube’s head of business, announced that creators now needed 4,000 hours of accrued watch time in the last 12 months and 1,000 subscribers to receive ads on their videos instead of the former 10,000 hours total watch time threshold.

“We’ve arrived at these new thresholds after thorough analysis and conversations with creators like you,” Kyncl said in a blog post. “They will allow us to significantly improve our ability to identify creators who contribute positively to the community and help drive more ad revenue to them (and away from bad actors). These higher standards will also help us prevent potentially inappropriate videos from monetizing which can hurt revenue for everyone.”

Not everyone saw it that way. Lesser known creators posted emotional responses on YouTube. Creators like Christine Barger, who runs two channels on YouTube, said it felt like YouTube was dividing the community even more.

“I feel stupid for crying because, honestly, it’s silly; it’s not like it’s millions of dollars,” Barger said. It’s not about the money. It’s about the fact that I’ve been a part of YouTube for a really long time, and I’ve finally tried to be a part of this platform, just to feel like they don’t care about small creators.”

In his post, Knycl said the “changes will affect a significant number of channels, 99 percent of those affected were making less than $100 per year in the last year, with 90 percent earning less than $2.50 in the last month,” but the damage felt by the community was difficult to ignore — a statement was later issued by the company to try and soften the blow a little bit. YouTube knew people were mad, again. It felt like all YouTube had done for close to a year was acknowledge people were disappointed in the platform they called home.

The new changes went into effect on Feb. 20, which many refer to as “Demonetization Day.” Since then, lesser known creators have been waiting upwards of six months to have their accounts reviewed, in order to earn ad revenue. Multi-channel networks are dropping channels en masse as they try to meet YouTube’s stricter guidelines.

People are angry — and the company is still trying to find a way to balance what advertisers need to feel safe and what creators need to feel heard more than a year after demonetization hit creators like a tidal wave.

As the company that promised a place to make videos and get paid while doing it shies away from that model, creators are quitting in droves. Internet video, a term that used to describe the weird, artsy animations littering Newgrounds like Salad Fingers, is becoming more corporate. The more advertisers have a say in what videos can exist and thrive online, the more like traditional network television the internet becomes. YouTube is at a crossroads, and if the decision is to turn YouTube into an MTV for cord cutters, independent creators who found a way to earn money for making weird or independent content are left out — and that means far less of the independent series we all enjoy on YouTube.

Demonetization is the story of creators fighting to keep earning money for creating videos, and the constant fight YouTube gives them to continue doing so. Demonetization is creators asking YouTube to continue letting them create weird, funny and informative videos for a platform that isn’t beholden to anyone except the people who watch their videos — the very thesis that launched the platform in the first place.

Polygon will continue to update this as major events occur — and change — YouTube’s monetization policies.