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Why YouTube – With Its Deep Pockets – Isn’t the Perfect Fit for All Creators

Content creators these days have a lot of choices in where to build their business, but it’s not always about the money for some of them.

While YouTube has historically paid out the biggest bucks — some $30 billion in recent years — rivals like Facebook, TikTok and Snap are trying to catch up with various incentives, features and bonus programs aimed at getting creators on their platforms. Over time, these could attract creators who want dedicated platforms and tools designed for commerce or livestreaming, for instance. Ultimately, earning creators’ loyalty will come down to their monetization options, earning flexibility and what advantages they can offer over YouTube.

“Realistically, it’s difficult to predict the ways viewers will want to engage with content in the future,” Victor Potrel, vice president of platform partnerships of digital studio TheSoul Publishing, told TheWrap. “The best approach is to experiment across the board and learn as a creator what works for you and your brands.”

So far, the major downside to the competitors’ creator programs is that they all pull from set creator funds, as opposed to sharing actual revenues, so there are limited dollars to go around as more creators join. For example, Facebook parent Meta and TikTok’s annual payout funds are capped at $1 billion each, though there are plans to expand gradually. In comparison, YouTube averaged $7.5 billion per year in payouts between 2017 to 2020. (The company did not provide figures for 2021.)

One size doesn’t fit all

But YouTube’s competitors still stand a fighting chance at winning over creators, because not every platform is going to do everything a creator wants. With so many different sites, creators are often making choices on monetization, features and partnership opportunities that each platform has to offer. While YouTube may have been paying more to creators thus far, other social platforms and creator tools may fill the gaps for different needs, provided they can offer a good experience and attractive enough incentives for creators.

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Probably the first consideration when it comes to a creator’s platform of choice is their target demographic. While YouTube and Facebook attract more millennials, TikTok and Instagram may be more appealing to Gen Z users, Alexis Taylor, consultant at marketing agency Clicksuasion Labs, explained.

After nailing down a site’s target demographic, Taylor said, “the next thing I ask [creators] to consider on their search for a platform to build on is the return on investment.”

For many younger creators, upstart TikTok offers distinct advantages. “TikTok is currently the only platform that allows for no-cost advertising,” she said. “You just need to make sure that your content can go viral. Following trends can help with that.”

There’s no question that TikTok is growing far faster as other platforms are seeing their user base age out. TikTok is expected to gain more Gen Z users than Instagram and more total users than Snap by 2023, according to eMarketer. The app, acquired by Chinese tech company ByteDance in 2017, has already surpassed Facebook in usage time. In 2021, TikTok hit 1 billion monthly users, while Facebook has continued seeing user growth stagnate.

On Shop Lit Live, creators can earn by hosting live shopping shows. (Shop Lit Live)
On Shop Lit Live, creators can earn by hosting live shopping shows. (Shop Lit Live)

Often, creators leverage social media to build up their brands and then monetize through additional apps specific for their business. Tony Estrada, a creator on Facebook and Instagram, was looking for a platform that specialized in online shopping. Having built his social media following as a skin-care influencer over the years, he recently started on Shop Lit Live, a livestreaming app where streamers can make money through shopping shows about different products.

“I enjoy the added income … and I love how it’s given me a wider reach and has helped me build an even larger audience,” Estrada said. “But the main reason I’m with Shop Lit Live is the culture. The development team is always refining the app with new and exciting features and opportunities for us.”

Another perk? Creators get free products for making content on their streams. Shop Lit Live said the app has hosted more than 5,000 live shopping shows and sees 10 times higher the conversion rate compared to traditional e-commerce.

On YouTube and membership platform Patreon, for example, creators can also cultivate a more loyal audience through channel subscriptions and ongoing memberships for special access to their content. Many creators also prefer livestreaming through YouTube, Facebook or Twitch, where they can connect directly with a live audience and earn instantly. On YouTube, viewers can pay creators directly during a livestream to get their comments highlighted in the chat.

“For long-form storytellers or livestreamers, platforms like YouTube and Facebook are more suitable,” Muhammad Ibrahim, cofounder of marketing agency Giraffe, said. “Consumption of shorter form, more snackable content, is better with Instagram, TikTok or Snap.”

Others, such as Spotify, have inked exclusive deals with major podcasters like Joe Rogan and Alex Cooper worth millions, whereas streaming platform Twitch offers an ads incentive program with personalized bonuses — a way of gamifying the experience with different levels of ad options tied to increasing rewards. Twitch creators can control the length and frequency of mid-roll ads and have the flexibility to opt out of an offer if they aren’t posting frequently enough.

Diversification is key for creator success

Additionally, as more social platforms face growing pressures to moderate their content, experts say creators need to diversify across mediums to generate multiple sources of revenue. Brian Penny, creator and CEO of media and content agency Thought for Your Penny, advised creators to aim for a presence on multiple platforms — from Twitch to Spotify to LinkedIn to Substack.

“If one goes down for any reason, like cancellation [or] server outage, you need backups,” Penny said. “If you’re dependent on only one platform, you have a major risk in your business that needs to be fixed immediately.”

Having a presence across several platforms gives creators more revenue diversity and visibility as well, Ibrahim of marketing agency Giraffe explained. Deciding which platforms to use can be based on local relevance and audience size. “So building relevance with a particular platform with your content is key to be able to monetize it better, and being present on multiple platforms will up your commercial game,” Ibrahim said.

Creators also face a challenge with content ownership, Penny said, because they ultimately don’t have the rights or control over their work on any of the platforms. This makes it even more important not to rely on a single platform for content distribution — and the safest bet for creators is to also maintain their own site.

“As a tenant, you’ll be subjected to the individual platform’s terms of services,” Penny said. “If you post content the platform does not agree with, you can have either the individual post or your entire account removed. Cancel culture is a real thing, and that’s not the only problem you’ll face as a creator.”

This is Part 2 of a WrapPRO series on the Battle Over Content Creators.

Wednesday: How YouTube Is Winning the Fight Over Content Creators | Charts
Thursday: Why YouTube – With Its Deep Pockets – Isn’t the Perfect Fit for All Creators
Friday: How Social Media Platforms Are Racing to Win the Short Video Market Away From TikTok