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YouTube looks to demonetization as punishment for major creators, but it doesn’t work

YouTube looks to demonetization as punishment for major creators, but it doesn’t work


Steven Crowder’s case is a perfect example

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The Verge

When YouTube wanted to punish political pundit Steven Crowder amid widespread outcry over his homophobic comments, its first move was to disable Crowder’s ability to run ads on his videos. The punishment was meant to revoke a key source of income, presenting a strong incentive for Crowder to change his behavior. But Crowder didn’t care, “This really isn’t that big of a ding for us,” he said.

Crowder sells T-shirts, hats, stickers, and subscriptions for more videos through his website, which is where he’s indicated most of his channel’s money comes from. Selling merchandise and subscriptions through other platforms isn’t just a way for creators to make more money, it’s also a way for creators to insulate themselves from YouTube’s ever-mercurial rules and algorithms. And it means that if a creator’s ads are cut off for whatever reason, they’ll still have a source of revenue.

Creators have realized that “YouTube can do whatever the hell they want to,” Wyatt Jenkins, Patreon’s VP of product, told The Verge. Because of that, they’ve started looking for ways to establish other relationships with their viewers. “They’re like, ‘If I’m going to make a run at this and do this for a living, I should probably have my best fans in my world.’”

“YouTube can do whatever the hell they want to.”

Taking away a channel’s ability to run ads is supposed to send a message that YouTube is punishing creators who severely step out of line. The company stated as much in a June 5th blog post, reiterating that channels repeatedly brushing up “against our hate speech policies will be suspended from the YouTube Partner program, meaning they can’t run ads on their channel.” Creators also won’t be able to use alternative monetization techniques like Super Chat or channel memberships, according to YouTube.

For up-and-coming YouTubers reliant on that revenue, it can pose a huge problem. Many people just entering YouTube’s Partner Program, a threshold that signifies a creator can start earning ad revenue, may rely on that advertising money as they start their career. Channels that face day-to-day monetization issues, one of the biggest issues within the community, are struggling to understand what works and what doesn’t. But for larger creators, who still keep their ability to reach a huge number of subscribers, the punishment doesn’t necessarily accomplish YouTube’s goals.

Established creators — like Crowder, who reaches more than 4 million people — often have a large audience ready to buy products, significantly lessening the severity of the punishment. When YouTube cracked down on gun videos last year and removed ads from a number of channels, many of those channels circumvented the impact by signing sponsorship deals or starting Patreon accounts, allowing them to continue exactly what they’d been doing before.

“It’s inefficient, it’s unstable, and an insecure revenue model.”

YouTube isn’t likely to ban high-profile channels, either. If a channel’s content is borderline, meaning that it doesn’t violate YouTube’s rules but is considered harmful, moderators will allow videos to remain up. Demonetizing a channel’s videos allows YouTube to appear to have taken a strong action, even if that action isn’t always effective. 

Relying on ad revenue alone is difficult, Felix “PewDiePie” Kjellberg said in a video about YouTube ads last year. “It’s inefficient, it’s unstable, and an insecure revenue model,” according to YouTube’s biggest creator. Most YouTube creators “don’t sustain themselves on ad revenue,” Kjellberg said. 

Merchandise and subscription services on third-party websites are key to being a full-time YouTube creator in 2019. Major YouTube stars including Jake Paul, James Charles, Emma Chamberlain, and David Dobrik have established entire secondary businesses off merchandise sales.

Some creators, like Dobrik, invested heavily in creating a merchandise line so that they could continue publishing edgy footage that might make advertisers uncomfortable. Others were just worried about another “adpocalypse,” a term used within the community to talk advertisers into pausing spending on YouTube after controversial events. Dobrik’s merch line has been so successful that a two-day pop up shop in New York’s Tribeca district earlier this year sold out both days.

“Then they make millions off of selling merch, doing speaking gigs, and getting their followers to support them on Patreon.”

YouTube’s ad policy changes have forced creators over the last several years to find new monetization methods regardless, making YouTube’s threat of removing ads even less of a punishment. Carlos Maza, the Vox host who Crowder targeted with homophobic slurs, pointed out that YouTube’s punishment doesn’t stop Crowder from using his YouTube channel as a way to sell products and expand his audience. (The Verge is part of Vox Media, which also owns Vox.)

“YouTube gave bigots a greenlight to mock LGBT people and people of color, and continues helping those bigots by finding them new followers to sell merch to,” Maza tweeted on June 8th. “It’s not negligent, it’s actively aiding in the spread of bigotry.” 

Crowder is well aware of this dynamic. He’s gloated over a major increase in membership subscriptions since the incident with Maza began, saying that Maza sold “more mug club memberships than anyone in the history of the company.”

“Demonetizing doesn’t work,” Maza tweeted after YouTube’s decision. “Abusers use it as proof they’re being ‘discriminated’ against. Then they make millions off of selling merch, doing speaking gigs, and getting their followers to support them on Patreon. The ad revenue isn’t the problem. It’s the platform.”

Patreon has become a hub for creators looking to spread out their income opportunities. Creators like Philip DeFranco, a popular YouTube commentator, and Kinda Funny, a collective of gaming personalities and comedians, earn an estimated additional $50,000 a month on Patreon. They also retain 90 percent of that income, with Patreon taking a 10 percent cut. This is more than the 60 / 40 cut creators get on YouTube. 

“This really isn’t that big of a ding for us.”

But having access to a powerful tool like Patreon means creators must abide by the company’s strong moderation policies. Jenkins told The Verge that unlike competitors like YouTube, Patreon doesn’t believe in allowing its members to sell anything they like under the guise of “free speech.” The result is losing “some folks who are in that free speech cohort,” according to Jenkins, but that’s a decision the company made some time ago and has stuck to. 

“When a creator crosses the line into excluding exhorts of people, like the way I would argue that Jordan Peterson or someone else does, they’re going to cross the line,” Jenkins said. “That’s the boundary that we’ve created. There are a number of folks who aren’t on Patreon anymore for those reasons.” 

Patreon’s business has continued to grow at a steady rate over the last few years, even while taking a firm stance on moderation. Patreon has banned creators who are using its services to sell products or create content that is harmful or hateful in any way. For those who can work within the company’s guidelines, it allows them a financial freedom that makes YouTube demonetization nearly useless. 

Advertisements are still core to monetization for most YouTubers, and it’s clear the company still sees revoking ad privileges as a form of moderation. But Crowder’s response to the situation shows that demonetization is not the same as moderation, especially for the biggest creators on the platform.