🎯 The YouTube Partner Program

YouTube's $30 billion secret: You

June 07, 2023

Read time: 3 minutes 6 seconds

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  • Breakdown: The how

    The strategic playbook, but boiled down to 3x actionable takeaways.

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It’s no accident that being a ‘YouTuber’ is the most-desired career among kids in the US and UK.

What started as “Your Digital Video Repository" somehow became the world’s 2nd most visited website with over 75 billion monthly hits and $30 billion in annual revenue.

They may not have known it then, but their winning strategy was born the day their slogan changed to the remarkably prophetic “Broadcast yourself”


The YouTube Partner Program

Chess Move

The what: A TLDR explanation of the strategy

In December 2007, YouTube piloted a program that allowed people to monetise their content by placing ads in their videos.

Originally, creators weren’t paid to be on the platform, but with the YouTube Partner Program (YPP) they were financially incentivised to upload original content.

At the time, the idea of sharing revenue with your users was unheard of, but less than 1 year after launching YPP, YouTube was already paying some creators over $100,000 per year.

So - how did the strategy work?

Breakdown

The how: The strategic playbook boiled down to 3x key takeaways

1.  User Acquisition Flywheel:

YPP rewarded creators for growing their own communities of subscribers, which helped YouTube build a massive user base.

By incentivising creators to produce and promote their own content, a flywheel formed: The more users YouTube had, the more creators it attracted. The more creators it had, the more attractive it was to users.

Takeaway: An optimal mechanic to aim for - align incentives so that your users bring more users.

2. Long Tail of Niche Content:

YPP created a unique home for a ‘long tail’ of creators who could profitably produce niche content for small, passionate communities that were underserved by traditional media.

For example, a basketball fan in 2007 had 3 options: ABC, ESPN, and TNT. YPP has created a world where you can easily find thousands of creators producing ‘follow-along dribbling drills’, ‘high-school phenom dunk mixtapes’, and ‘how to coach zone defence tutorials’ with millions of views each.

Takeaway: Can you provide unique value for users that they can’t find anywhere else?

3. User-Generated Content Ecosystem:

YPP spawned not only a new class of paid creators, but also an ecosystem of advertisers interested in these new marketing surfaces.

This shifted the marketing metagame - brands started experimenting with ‘influencer marketing’, where they partnered directly with creators to promote their products.

New opportunities and a broader ecosystem gave creators even more reason to commit to growing on YouTube.

Takeaway: Consider ways in which third parties could help compensate your users for using your product (advertisements or otherwise).

YouTube didn’t just make a platform for content that wasn’t anywhere else; they created the only ecosystem with the right incentives for niche content that couldn’t be anywhere else.

The ultimate competitive moat.

Rabbit Hole

The where: 3x high-signal resources to learn more

[8 minute watch]

This video checks all the boxes for internet archaeologists:

✅ Uploaded 15 years ago

✅ Under 20k views

✅ Hints at what’s to come
 way before it actually happens

[2 minute read]

Mint-condition, unopened, original YouTube blog post from 2007 announcing what ended up becoming YPP. Talk about a butterfly-effect!

Just 2 years after the company launched, they recognised top creators had already “built and sustained large, persistent audiences through the creation of engaging videos [and] their content has become attractive for advertisers”.

[4 minute read]

Today, TikTok is đ™©đ™đ™š existential threat for YouTube. The biggest frustration from TikTok creators? Underwhelming native monetisation.

YouTube’s counter? Use YPP ad infrastructure to let creators monetise ‘YouTube Shorts’ (their own short-form competitor product).

The fight is happening in real-time so TBD how this pans out, but this announcement page is a damn-near-perfect proxy for a strategy doc that we can all nerd out on.

That's all for the first issue, folks! Optimise your business processes social feeds by following on Twitter [@tomaldertweets] and LinkedIn [/in/tom-alder]

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