What a decade for the Creator economy.
10 years ago, I was learning about the music and video director magic of Kurt Hugo Schneider from my niece, being told I should start watching Philip DeFranco by my colleague Nashua, and discovering Mother Goose Club nursery rhymes for my young son searching by generic song titles. I was first a viewer, then a subscriber, and soon a fan of many creators.
Soon after joining YouTube in 2012, my colleague Bing asked me which creator I most wanted to meet. Without skipping a beat, I said Kurt. Later that evening, I was having dinner with Bing, Kurt and his longtime music collaborator Sam Tsui. I learned at the dinner that Kurt had never been to Asia, though it accounted for one third of his audience at the time. I asked Kurt if I could produce his first Asia tour, if not for the simple reason that it meant I could watch him perform in my hometown at the time - Singapore.
That dinner also proved to be a window for me into the economics of being a creator who relies on YouTube for reach and engagement. 10 years ago, the notion that you could earn a living uploading video to YouTube was not common knowledge. There were less than 15,000 people worldwide monetizing their videos at the start of the last decade, according to YouTube.
It’s nice to see that Kurt managed to turn his Yale education into a decade-long career on YouTube. To me, it speaks to the longevity of the ecosystem.
I have often thought there is no better time to get started as a creator than today. YouTube alone, by my estimates, generates 40 times more daily views today than it did a decade ago. Twitch, TikTok, Instagram and other platforms provide creators with additional options to amass significant reach, and turn consumer engagement into not only an annual income, but generational wealth.
Forbes Top Earning YouTubers: Ryan Kaji
For the past five years, Forbes has charted the top 10 highest earning YouTube creators. Most of the headlines following its latest edition in December centered on Ryan Kaji earning $26 million in the year. The year that Forbes tracks ends on June 1, so it presumably does not include most of the $150 million in sales the Wall Street Journal stated the creator’s brand earned in 2019. Toy sales are generally robust in Q3 and Q4. Ryan’s brand saw a 6x increase in Google search interest from the start of October through to the end of the year. Maybe those were parents trying to find which Walmart or Target store had Ryan’s products in stock, and avoid an angry child come Christmas morning.
Ryan’s reach and engagement on YouTube is astounding. Based on my analysis of his channel, he (and his parents and their production outfit) uploaded 32 videos in December on his main channel, and that content generated over 90 million views in the month. His library is quite powerful. In December, nearly 90% of the views came from content uploaded in a prior month. Based on two separate Nielsen reports, I found that he generates more views in two days on a new YouTube video than he has viewers of a single episode of his television show on Nickelodeon. The total time consumers spend watching his content on YouTube is in the ballpark of the time people spend watching The Office on Netflix.
What’s the upside for Ryan’s brand? Last year, NBCUniversal is estimated to have committed $100 million a year for five years to take The Office from Netflix to its new streaming service. Powerful library content. eOne was acquired by Hasbro last year for $3.8 billion. The biggest IP in the eOne stable is Peppa Pig. Years ago I met with a toy distributor in Asia that was baffled as to why kids in some markets were asking for Peppa Pig toys, and the TV show had yet to launch on local television. I asked if he had heard of YouTube. In my view, that is where most kids discover and engage with the content. Over 500 million views on its official channel in December. I estimate 4x that volume when you factor in all of the other content uploaded by people featuring the brand. Like this video with over 50 million views.
The U.S. Census Bureau estimates there are 40.6 million kids in the country between the ages of 0 and 9 in 2020. I believe when you deduplicate the viewers on Ryan’s YouTube channel, you will find he has around 25 million unique viewers in the U.S. Assuming those are all kids under 9-years old, which is a fair assumption, that means over 60% of all kids under 9-years old in the U.S. are watching his content every month. No wonder parents are spending $150 million this year buying his toys.
Ryan is half-Japanese, and is yet to develop a significant audience in that market. My company invested in AnalyzeLog in December 2018, and last month that company partnered with Ryan and his family to localize its brand and content for Japanese consumers. I am excited about the potential for AnalyzeLog and Ryan. Great toy market. Great digital commerce market. Also a market where a company like Uuum, built primarily around YouTube creators, can go public and maintain a valuation above $800 million for most of the year. I like the precedent.
Forbes Top Earning YouTubers: The Others
In the five years of the Forbes rankings, the publication has charted 22 different YouTube creators. Felix Kjellberg (PewDiePie) is the only creator to have appeared on the list every year. While the aggregate income volume has increased 277% over time to $162 million, it actually decreased 9% in the last year. That seems odd to me. Does it imply the aggregate earning potential of the top 10 on YouTube, whoever that may be each year, has peaked? Aside from Ryan Kaji, all six of the other creators who repeated in the ranking did not see an annual increase in their earnings.
The Forbes ranking does not appear to correlate with the creators’ view counts on YouTube. Anastasia Radzinskaya was the main feature in the Forbes article, and appeared in the list for the first time at No. 3. She tops the view counts. By a wide margin. 566 million views from new content uploaded in December. Averaged 33 million views an upload in the month. Her total view count on her channel increased by nearly 2 billion views in December. All her content right now is live action, and positioned as a vlog. It seems to me she has a great platform on YouTube (over 40 million subscribers) to launch new IP, possibly in animated form, and enable the same monetization diversification that Ryan Kaji’s family has established with pocket.watch over the past two years. Her audience appears to be less pronounced in the U.S. compared to Ryan, so that could be why we don’t yet see her products on Walmart shelves. Though a toy line is reportedly in the works.
A decade ago I worked for Turner Broadcasting (now known as WarnerMedia), and saw firsthand how strong its adult swim television block on the Cartoon Network channel was for young men, aged 18 to 34-years old. Analyst estimates I have seen peg the late night block hauls in over $350 million a year in U.S. advertising sales for WarnerMedia. The top non-sports U.S. television program in early December for adults 18 to 49-years old was an airing of Rick and Morty on adult swim on Sunday, Dec 8 at 11:30 p.m. 1.25 million viewers.
Over the past decade, the young adult audience has spent more and more time on platforms like YouTube and Twitch. PewDiePie, Markiplier, VanossGaming and Dude Perfect are all in the Forbes list, and each have strong reach in that demographic. PewDiePie alone was averaging 5.5 million views per new upload in December. I wonder how he is packaged and sold to advertisers, compared to the edgy content known to appear on adult swim. How much of the $13 million Forbes estimates he earned in the last year came from YouTube revenue versus direct sponsorship deals from the likes of NordVPN and the game World of Tanks that sponsored his content in December? The group of creators reaching young adult viewers with edgy or non-edgy content has potential in the next decade to attract a larger share of the advertising pie television networks like adult swim has commanded to date.
NY Times Famous Faces
Just before Christmas, the New York Times published an online quiz to identify politicians, athletes and celebrities. I was pleased to see I scored better than 92% of Times readers. One reason may have been because I could name the YouTube creators the Times included in the quiz. People like PewDiePie, Markiplier and Jeffree Star, who all appeared in the Forbes ranking mentioned earlier.
I was quite interested to see the awareness levels shared by the Times in the results of the quiz. This data comes from a consumer study of 6,000 adults and teenagers that is meant to be representative of the overall U.S. population.
Barack Obama leads with the highest awareness level, followed by Donald Trump. That’s good to see, though also concerning that the study says 3% to 5% of Americans can’t identify their past or current president by photograph.
Jeffree Star and PewDiePie lead the YouTube creator group with a 16% awareness level amongst Americans, and 10% to 17% awareness level, respectively, amongst Times readers. Markiplier follows with 9% general awareness. Emma Chamberlain is the last YouTube creator featured in the quiz. She is a relative newcomer to YouTube stardom, and has 4% general awareness. That is slightly better than the average American’s awareness of the Indian prime minister.
Amongst Gen Z respondents to the study (ages 13 to 22), each of the creator’s awareness level goes up as expected. PewDiePie has 61% awareness amongst the Gen Z crowd, slightly behind the personality Kim Kardashian, and just ahead of NBA star LeBron James. PewDiePie, Markiplier and Emma all have sharp awareness level drops amongst millennials, displaying where their core audience lies.
The one non-music entertainer in the study that may show the potential for YouTube creators is Dwayne ‘The Rock’ Johnson. 92% of Gen Z, and 94% of millennials can identify him. While it helps to have three studio films released in 2019, and appearances on WWE and HBO, I’m sure his 167 million followers on Instagram or the 200 million monthly views on various platforms keeps him connected to both demographics. Which then helps to drive from awareness to consideration of a paid media product in theaters or pay television. The Rock topped the Forbes list of highest paid actors in the past year with $89 million in earnings. Do YouTubers need to make movies for theatrical release, or just make premium content that drives Gen Z and millennials to non-ad based platforms and get compensated for the value they drive?
I am going to endeavor to publish once a week, and have a number of topics lined up to explore in future editions. I may add a podcast as a companion to allow me to interview interesting people, and spare myself the task of writing a post. We’ll see.
Feel free to provide feedback on topics you would like to see me cover in the future.
Some tidbits I came across while researching this post that I thought were worth sharing:
In 2009, the third most viewed video on YouTube was this wedding entrance video. The video was famously copied by The Office, and since that show still finds new viewers on Netflix, the video has since gone from 33 million views in 2009, to nearly 100 million today. The divorce video is good. Though I hope the real couple in the first video has celebrated their 10th wedding anniversary in the past year.
VEVO launched 10 years ago in December 2009, and none other than Rihanna made the announcement. Music videos are a dominant force on YouTube today. 51 of the 100 most viewed videos uploaded in 2019 were music videos. These 51 music videos generated over 25 billion views in the year. Billboard recently announced they will include YouTube streams in the calculation of their charts, starting on January 3. Get ready for Nuki Nuki from 10 years ago entering the charts, or maybe backing the next TikTok dance.