YouTube Will Start Inserting Ads into Non-Monetized Content
Starting in the US this November 2020, and Next Year - The World
This could cause some displeasure for several millions of YouTube creators.
YouTube just recently announced an update to their Terms of Service which, most particularly, includes a new condition (or a clause) that will enable YouTube to incorporate ads into content that's not part of the YouTube Partner Program (YPP).
In layman’s terms, if you chose not to put ads in your YouTube video, YouTube's going to do it anyway - and you won't earn any income (or even proceeds) from those ads unless you sign up to YPP.
As per official statement of YouTube:
"Starting today, we’ll begin slowly rolling out ads on a limited number of videos from channels not in YPP. This means as a creator that’s not in YPP, you may see ads on some of your videos. Since you’re not currently in YPP, you won’t receive a share of the revenue from these ads, though you’ll still have the opportunity to apply for YPP as you normally would once you meet the eligibility requirements."
Prior to the new policy, YouTube says these videos only received ads in limited circumstances, like if they were monetized by a record label as part of a copyright claim. The update will mostly affect smaller creators without a huge viewership; YouTube’s Partner Program requires creators to have achieved 4,000 total hours of public watch time within 12 months and have 1,000 subscribers or more.
The news did not go well with the YouTube community. The creator community’s relationship with YouTube over advertising revenue has been tense for several years. Sometime in 2016 to 2017, YouTube creators who were in the Partner Program were hit by a sudden drop in ads revenue when YouTube struggled to contain disturbing children’s videos and other harmful content. And in 2018, the Logan Paul case led to changes to the Partner Program policies and made it more difficulty for creators to start earning revenue.
Many creators over the years have decided not to put advertisements into their YouTube channels even if they had a chance to make millions of dollars from their videos. That choice is now overruled by the new policy and that people will view a creators' content with disrupting ads - so YouTube's will now push ads in those videos whether they (the creators) or you, like it or not. So, creators probably should sign-up to the monetization program.
In recent report from a survey website, YouTube ad revenues from January to June of 2020 went down compare to last year. The COVID pandemic is one of the big reasons for this. However, they are slowly bouncing back as per report from The Verge
“Google parent company Alphabet’s third quarter revenue increased 14 percent from the year before, led by a rebound in advertising revenue for both Google and YouTube. YouTube brought in $5 billion in advertising revenue in the third quarter of 2020 — a sign that advertisers who pulled back on their spending because of the coronavirus earlier in the year may be returning to something resembling normal.”
It’s hard to get a grip right now on how many YouTube videos this new policy in monetization will impact, but this action from YouTube could lead to significant increase in ads revenue for them as well as increasing advertising real state.
For US creators that are part of the YouTube Partner Program, they will now see their revenue payments from YouTube treated as royalties, from a tax perspective, and maybe subjected to withholding taxes.
"Google will withhold taxes from these payments if it is required by law. US creators will generally be unaffected by these withholding taxes as long as they provide valid tax documentation in Adsense."
For non-US creators, like me, this policy may take affect next year or hopefully by middle of 2021.
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