- There are major changes to the YouTube terms of service
that affects you and your content,
if you're a creator on this platform.
Today, I wanna break down the new YouTube policies
regarding monetization and ads on your channel
and this does affect you,
whether you are in the YouTube Partner Program or not,
because ads will be running on your content either way.
The difference is you won't be paid for those ads
if you are not a YouTube partner
who is eligible for AdSense.
If you're not already aware
of how YouTube monetization works,
I do have a video that breaks that down for you.
Here's the short version.
To be eligible for the YouTube Partner Program
and earn monetization through YouTube AdSense,
which is ads playing on your videos
and the possibility of having donations through Super Chat
and other forms of YouTube earnings,
you have to have 1000 subscribers
and have accumulated 4,000 hours of watch time
in a 12 month period.
However, going forward,
even if you have not met those requirements,
ads will be playing on your YouTube videos.
And this is a big deal for several reasons.
For one thing, ads will be playing on your videos
without you receiving compensation from them.
Number two, YouTube partners usually get to choose
what types of ads play on their videos
at least in terms of whether those ads are skippable
or non-skippable ads.
If you are not a YouTube partner,
you will not have this control.
An advanced feature, that monetize creators
also get with their AdSense account,
is you could make options to choices,
as far as what types of ads play on your videos.
You can't specifically say, I want these ads,
but you can exclude ads.
Which means that you could exclude political ads,
for example.
On this YouTube channel,
I don't allow political ads to play,
I also don't allow non-skippable ads to play,
and that's been the case for many years here on the channel
and it hasn't negatively impacted the videos.
It has positively impacted the viewer experience.
And that is why this first major change,
the terms of service is a big deal.
You as a content creator,
will not have this one piece of control
over your viewers experience.
They could have non-skippable ads
playing before your videos, and that could frustrate them
to the point of not continuing
to even bother watch the video.
You also will not be paid for the ads
while YouTube is going to benefit on their end.
The second major change the YouTube monetization
and how creators are paid
is that AdSense earnings will now be counted as royalties
with regard to them as taxable income.
And this is gonna start here in the US immediately
and these changes will roll out internationally,
in the middle of 2021.
Now, taxes are something that are very complicated
and we actually do have more than one video on the channel
that discusses the taxes that content creators pay
and so I'm going to have you reference that video
in the description and in the info card.
However, there is an update to that that is very important.
With YouTube taxes now being royalties instead,
this is a different form of taxable income.
So this won't be counted the same as profits on a business,
which means that it won't be subjected
to the same kinds of taxes,
and you'll need to talk to a CPA or a financial advisor,
somebody who is a qualified professional,
don't just take tax advice from anybody on the internet,
get a professional,
and you'll need to understand how this affects you.
I will give you some of my thoughts on this
at the end of the video,
because there are some upsides instead of just downsides.
While YouTube says
that this generally won't affect most creators,
it is possible that with these royalty payments,
there will be taxes withheld
that will affect the amount of take-home pay
that you get when it comes to your YouTube AdSense earnings.
So there are exceptions and there may be situations
where creators do not get the amount of money
that they expect, because taxes may be taken out
in advance from this.
So here are my thoughts on these policy changes.
Let's start with the first one
in terms of creators not being paid for ads on their videos,
even though they're not part of the partner program.
This is probably going to hurt the viewer experience
a little bit,
even though people are used to ads being on YouTube,
it's possible that they may not have the patience
to sit through an ad,
especially if it's an ad they don't like
when it comes to a smaller channel
versus an established content creator who's monetized.
While I doubt this will be a huge impact
for most people creating on the platform,
it is something that could be a concern
and if you are a smaller YouTube channel,
I understand why you'd be upset about it.
I actually do own several YouTube channels
that aren't quite monetized just yet.
So, I definitely do hear where you're coming from
because this could affect the content.
It could affect the viewer experience.
You may not want people to be interrupted
in their viewer experience,
if you're not gonna get paid for it.
That's totally valid.
You also don't control how many ads show up
or where they show up like you would
if you were a monetized content creator.
So in my case, I do a podcast with my friends,
Romina and Audrey called the "No Assembly Required" podcast.
This podcast goes on for like an hour to 90 minutes.
I can't control how many ads
YouTube's gonna put in the replay
until our channel is monetized.
At which point I could actually decide
that there are no mid-roll ads
and let people enjoy the podcast the way that I intended.
Now, with regards to the royalty situation,
this is something that actually could be a positive
for some content creators,
because they may be able to figure out some things
with regards to their financial situation
when it comes to qualifying your income.
One of the struggles of being a content creator,
is the fact that our industry is not a mainstream.
It's not traditional and so therefore,
by many people is viewed as less legitimate.
But royalty income is an established precedent
for entertainers
and it's something that is really understood
by financial institutions.
So when it comes to the fact
that you're getting royalty income,
it's no different than if you were an author
or a musician or traditional entertainer.
And so this is probably for some people,
going to be an advantage when you're using your tax filings
in order to maybe buy a home,
if that's something that you're doing,
or if you need proof of income of some kind,
this is actually going to probably make things
a little bit cleaner for you
and this is also gonna be helpful for creators
who need to prove and verify income,
who are not an established LLC yet,
or any other type of business entity, like an S corp.
Like I said, I'm not a CPA, I'm not a financial advisor,
so make sure that you're not just taking advice
from somebody on the internet,
this is clearly for entertainment purposes only.
Disclaimer, disclaimer.
The more pressing concern would be
if you are one of the rare content creators
who is going to have taxes withheld.
While ultimately, this won't impact you in the long run,
since you have to pay taxes on all earned income
from YouTube anyway under the law,
well, the thing is it could affect the monthly income
that you are looking forward to
and making it plan around from a cashflow standpoint.
So from a cashflow standpoint,
this could negatively impact your plans.
Which is why on this channel
we preach diversify your income,
especially as a content creator
and do not rely on AdSense.
I get a lot of grief from people over in Twitter
and in some of these videos,
when I keep kind of like talking down AdSense,
a lot of people don't like me for it,
but you can see that since it's something
where we don't always have the control,
why I feel that is a vulnerability.
YouTube gets to make up the rules as they go,
when it comes to how you earn through their platform,
when they're the one cutting the check.
And that could be uncomfortable when those rules change,
when the goalpost changes,
so that's why I have my concerns about it.
So now you're cut up on the new changes to YouTube policies
and monetization standards and I wanna know,
question of the day,
how does this impact you as a content creator
and how do you feel about it?
Let me know in the comments.
If you guys got something out of this video,
go out there and create something awesome today.
Take care.