Will crowdfunding change the way we look at jobs 10 years from now? I’m honestly not sure, but it seems to me that funding is going to become a serious issue for most media websites in the near future. The truth is, traditional online advertising is no longer a viable means of profit. A thousand page views is worth a couple of bucks at best. Those full length commercials you see before YouTube videos only market Google a profit of $1-10 cost per thousand (CPM) ad views. That means a video with 1 million views only adds up to $10,000 at best. Well, not quite. The ads before a video are only watched all the way through roughly 30 percent of the time. That means only 30 percent of that 1 million is counted towards your CPM. Additionally, Google is going to take about 45 percent of the ad revenue and share the rest with the content creator. That means a video with 1 million views can generate as little as $3,000 at the $10 CPM mark, and advertising agencies have been less and less willing to pay over the past few years.
While profit from advertising is slowly fading away, people have been looking for alternatives. It’s hard to create content that attracts thousands of viewers essentially for free. There are a number of methods to generate more income. Many YouTubers resort to making sponsored videos, much like a sponsored article on any news site. It’s a video designed to show off a product and the creator is paid to portray the video as just another one of their regulars. Many popular YouTubers are starting to move on to producing their own shows, whether it be on TV, Netflix, YouTube or their own websites.
Most people, however, are turning towards using Patreon and other “fund-me” websites to make a living off of their videos, essays, art, games, etc. Patreon works in two ways. First, it functions as a donation site — literally patronage — by asking one’s user base to donate to their cause. The other method turns a user’s Patreon into a small business by making exclusive content for subscribers. With advertising becoming less valuable, it seems that this is really the only viable option for any kind of media-based web platform. For instance, look at how the music industry is changing. It’s much harder to make people to buy your album. Kanye West tried to make “The Life of Pablo” only available through Tidal in order to force monetization. Within the first week the album was pirated over half a million times. The advertising scheme works fairly well for the viewer. We just expect content to be free. In many ways this is how most bloggers, artists and various other media creators see their audience as well: a bunch of freeloaders.
This paid subscription format is by no means new. Many newspapers, when transitioning to a web format, included some kind of paywall, but most got rid of it after “free” online papers came out making a killing on advertising. Profit on the Internet is still a tricky business. Ads, paid subscriptions, donations; are these the only things we can do without directly selling some kind of physical product? Even really talented content creators with large audiences have trouble getting by with a Patreon account. Of an audience of 1,000-3,000 people, only about 100 will be willing to actually shell out a few dollars. Despite a contribution rate of 10 percent or less, you can make about $1,000 from an audience of 1,000 people — that’s a lot better than what YouTube can do. It’s still not great, though, and Patreon takes a cut as well. But perhaps we do need a few more crowdfunded media sites. Ad space is so prevalent on the Internet it is practically worthless. If subscriptions can remove some of that space, it would encourage ad companies to pay a little more to get their product on the screen.