YouTube for Media: A Sustainable form of Income?

Lately, more and more people have been waking up to the fact that YouTube can be considered a serious channel for making a living. Many are seizing the opportunities in the digital media industry, inspired by the growing interest of a large audience to video content. The growth of internet users and smartphone ownership in the country, has also led to a considerable growth in the number of people who use YouTube as a source of news and information. This, in turn, enables many YouTubers with content focused on Ethiopia to earn revenues from views, subscriptions and Advertisments. EBR’s Samson Berhane probes into the matter.

Even if Benti Abera finished his first degree in Software Engineering from the Adama Science and Technology University in 2015, he underestimated the power of Information and Communication Technology (ICT). After securing a job at Dire Tube, one of the largest news and video portals in Ethiopia, Benti became familiar with the basics of getting a YouTube business channel up and running. After working there for 11 months, he left his job to start his own business.

“I opened my own YouTube channel to generate income by creating content that fits with the local audience. But because of various challenges, I was not able to run it according to plan” says Benti, who was expected to look for potential investors. “I have been rejected by many whom I asked to finance my idea.”

He later got the chance to present his business idea to the owners of a consulting company, all of whom agreed to finance the launching his YouTube Channel. This is how Andafta.com, now a popular YouTube channel in Ethiopia, was born. The channel is described as an Ethiopian multi-platform entertainment and media company, powered by its own proprietary technology. Andafta is the go-to source for technology updates, digital culture and entertainment.

When he opened Andafta, he had only two desktops. With the increase in income generated by the channel, the 26-year old entrepreneur managed to currently employ four permanent staff and seven freelancers. He also built a studio located in Selam Building, in the Bole District of the capital. “We have passed through many ups and downs. It is by continuously learning from our past that we are now in good shape” he says.

From being a channel with a few subscribers, Andafta now has more than 350,000 subscribers with over 1,165 videos that have been viewed 45.8 million times, up until the end of last month. Its average revenues stand between USD5,500 and USD89,000 per annum, according to the YouTube Views counter, an app that allows one to track, in real time, the amount of views of a YouTube channel.

Benti is not the only one capitalizing on the opportunities that the digital market has created. In Ethiopia, there are increasing numbers of techpreneurs and companies that are opening YouTube channels to generate income and promote their goods and services. Musicians, film producers, activists, television broadcasters, radio stations, activists and entertainers, earn a considerable amount of pay in foreign currency from YouTube.

Of course, YouTube is quickly becoming a savior for the many who had huge talent but lacked the proper connection. With YouTube, they have turned their diverse passion into money-making enterprises. “YouTube has revolutionized the media sector, taking over the role of the main stream media,” Benti says.

“In fact, YouTube has changed the world of traditional media (TV, film, and literature) in unexpected ways. Most young people feel a sort of disconnect from TV shows because of the lack of communication between the actors and the audience. Many “YouTubers” are using this opportunity and are having talk shows, broadcasting movies, airing news productions and creating other content that perfectly fits their audiences” explains Benti.

New YouTube channel creators must first be able to build an audience to reach the minimum USD100 payment threshold while continuously promoting their videos. Addisu Mihret is amongst those who recently opened a new channel called Birgana Film with the aim to generate an income. Although his first choice was airing a show on television, he was prompted to join the digital media industry due to the growing popularity of YouTube. To do so, he bought two gaming laptop computers and three digital cameras. At a cost of more than ETB300,000 to purchase these items and additionally rent an office. “I spent what I had on hand because I believe the digital market is paying off based on the experience of the prominent YouTubers’ shows,” Addisu hopes.

For anyone who has witnessed drastic changes in the digital media landscape, it is not easy to understand why people like Addisu would make such an investment. The emergence of the digital media as a viable way to make an income can be best explained by the growth of smartphone ownership and internet users in the past decade. The number of mobile data and internet users in Ethiopia has more than doubled in the past 10 years, reaching 22.3 million by the end of last year. The smartphone penetration rate also skyrocketed, reaching around six percent of the population. On top of these, there are 6.1 million active social media users, twice of the population of Qatar, according to Hootsuite’s Digital Report for 2019.

While the users of social media grows by 37Pct annually, the number of YouTube users in Ethiopia has also shown considerable growth over the past half a decade, accounting for five percent of internet traffic in the country. “The amount of traffic from Ethiopia has more than doubled since I opened my channel,” says Benti, whose 14Pct traffic for its channel (Andafta.com) is from Ethiopia. Besides the rising number of internet users that have contributed to the proliferation of YouTubers, the growth in the number of Ethiopian-born expats and other viewers across the globe who are interested with issues related to Ethiopia, have helped digital media to grab attention in a short span of time.

In fact, according to the experiences of various YouTubers, more than 40 percent of renowned channels’ traffic comes from users in the US, while around five percent of the total YouTubers’ traffic come from Canada, Saudi and Germany each. “The number of users in Ethiopia has continued to grow especially after the government reduced the tariffs for internet. Yet more than 85 percent of traffic still comes from outside Ethiopia,” says Benti.

An online expert EBR caught up with and who has more than a decade of experience in digital marketing, agrees. “The contribution of Ethiopians to the total earnings of YouTubers is very low as traffic is still less. This means administrators of YouTube channels must understand the needs of their audience, majority of whom are living outside of Ethiopia.”

YouTube can be accessed in 76 different languages with more than half of the views via mobile devices. YouTubers make an income based on the audiences’ engagement with the advertisements (Ads). Engagement means clicking or watching the ads for more than 30 seconds. In fact, the determinant of earning money is a matter of whether viewers skip the Ad. If they don’t, it is determined by how long they watch the advertisement before proceeding to the main video. If the content of a video Ad is closely related to a search the viewer has been researching, the viewer will most likely watch the entire advertisement or click through the advertisement to the website.

Many advertisers broadcast advertisements mainly on Cost per Click (CPC) or Cost per View (CPV) model. YouTube offers creators 55 percent of all advertising revenue. The actual dollar amount can vary depending on the content of the video, the demographics of the viewers, and the current demand for advertising. When there’s an advertisement on a video watch page, the creator of that video shares the revenue from that advertisement with YouTube. Owners of channels aren’t allowed to discuss advertisement rates, but it’s generally acknowledged to be between one and two dollars per 1,000 views. Many YouTubers also make sponsored or branded content for the share of revenue.

But this trend is not commonly done by Ethiopian Youtubers. “There is a tendency to focus on YouTube Video advertisements by Ethiopians-targeted YouTubers, sponsored content is equally important,” says Nahom Belayneh, a Digital Marketing Professional who manages Online Communications Plc, a consultancy company. There are three types of YouTube advertisement; true view, pre-roll and bumpers. All of which are employed by Ethiopian Youtubers.

In the case of true view, video advertisements come in two forms: In-Stream and In-Display. The In-Stream advertisements play before the posted YouTube Video while the In-Display model appear as a sponsored suggested video at the top right sidebar above playlists. Both can be any length since the viewer can decide if he or she wishes to keep watching and they have a “skip advertisement” button that appears after five seconds. The reverse is true for pre-roll advertisements, which are non-skippable and pay per click. Though some YouTubers have allowed 30-second pre-roll videos, that format is not recommended. In actual practice, it is now between 15 or 20-seconds. Bumper advertisements, on the other hand, are only six seconds long. They are non-skippable like Pre-Roll advertisements but are pay-per-view like True view advertisements.

According to digital marketers, True view video advertisements are best for branding and video views, while pre-roll advertisements are ideal for sales campaigns such album sales , ticketing or new apparel. But, it is not easy to use such kind of advertisements and promote services and goods in Ethiopia because of the lack of electronic payment in the country. “I am expected to surrender 15Pct of my income to my partner in Italy just because she has a master card,” Addisu says. “While I am making the content, my partners share in the revenues because of the unavailability of electronic payment in Ethiopia.”

The unavailability of electronic payment does not only affect YouTubers, but also others who would like to promote their products online. “Ethiopian advertisers are expected to pay those who have an access to a master card at the black market exchange market rate,” explains Nahom. “They spend twice of the amount compared to what others with an electronic payment card pay.”

Be that as it may, the fact that Ethiopia is not under the YouTube development program is another challenge faced by YouTubers based in Ethiopia. Anyone with a YouTube Channel from Ethiopia cannot officially monetize their YouTube channel directly. The program is designed to allow content creators to monetize their content on the site directly, but this opportunity is not given to all countries in the world.

The program was introduced because of three major reasons; to avoid certain international laws, navigate without various tax and payment restrictions in certain countries as well as to ban those countries that tend to be hubs of fraud. Bearing these in mind, the program is available in 98 countries throughout the world, 13 of which are in Africa, including Kenya, Tanzania, Nigeria, Egypt and South Africa. Receiving via wire transfer is also allowed for the eligible countries, adding to other electronic payment modalities.

As a result, many of the YouTubers based in Ethiopia , are forced to deceive the location of their operation as based from another eligible country. For now, it does not seem as though there is another way of monetization existing for them. “We are hopeful that the government would keep its word, allowing its citizens to make transactions via electronic payment modalities and introduce laws to regulate the digital media industry,” concludes Addisu.

8th Year • Aug.16 – Sep.15 2019 • No. 77