Santa Ana-based entrepreneur Charlie Chan spent years posting finance videos on YouTube before making a profit.
Today, Chang’s media business oversees over 50 YouTube channels along with other digital sites, generating between $3 million and $4 million in annual revenue.
However, recently he has faced new concerns. YouTube’s movement in artificial intelligence is digging into his business.
“The fear is there and I’m still building the channel, but I’m preparing in case my channel becomes irrelevant,” said Chang (33). “I don’t know if I’ll build a YouTube channel forever.”
YouTube’s parent company, Google, uses a subset of the platform’s videos to train AI applications, including Text-to-Tool VEO. It includes videos created by users who earn a living on the service and helps turn it into the largest streaming entertainment provider in the United States
The move sparked deep tensions between the world’s largest online video company and some of the creators who helped make it a giant. According to creators, Google uses data to train what could become the biggest competitor.
Dividing comes at a critical time for Google. Google is in racing with rivals such as Meta, Openai, Runway, and more for the market advantage of AI-driven video programs. Google has the advantage as YouTube’s huge video library has seen over 20 billion videos uploaded to the platform as of April.
Many creators worry that such tools will make it easier for others to recreate their video style by typing text prompts that allow them to create images and concepts similar to those produced by popular creators. What happens if AI-generated videos become more popular than material? Creators say they can’t opt out of AI training and Google won’t compensate for using videos for such purposes.
“I’m a big part of this creator economy, and now it’s been literally dismantled by the company that built it, so that makes me sad,” said Kathleen Grace, a former YouTube employee who is now the chief strategy officer at Vermillio, a Chicago-based company. “I think they should be with pitchforks other than San Bruno.”
Founded in 2005, YouTube was built on creators who post content. At first, the user-generated videos were amateurish. But in the end, the creators became more refined professionals, performing more elaborate stunts and hiring staff to support their work.
The key to YouTube’s early success was investing in video creators. The San Bruno, California-based company shares advertising revenue with creators. Its business model kept creators loyal to YouTube. As they grew their audience, they increased ad revenue for both YouTube and creators.
Video creators are not usually employees of YouTube or Google. Many are independents who have built their business by posting content and making money through advertising, branding transactions and products. The creator economy is a bright spot in the struggles of the entertainment industry. Last year, citing data from Oxford Economics, YouTube said that YouTube’s Creative Ecosystem had more than 490,000 jobs to support the US Creative Ecosystem. According to Nielsen, YouTube has a larger share of US television audiences than Netflix and Walt Disney Co.’s combined channels.
YouTube said it paid more than $70 billion to creators, artists and media companies from 2021 to 2023.
The company encourages creators and filmmakers to use Google’s AI tools to help brainstorm and create videos. Some creators said they use AI to help hash concepts, reduce production costs and introduce bold ideas.
YouTube is also developing tools that help you identify and manage AI-generated content with creator portraits. Additionally, people have changed their privacy policy to request the removal of AI-generated content that simulates them on the platform, said company spokesman Jack Maron.
“YouTube only succeeds when creators do that,” Maron said in a statement. “This partnership has provided billions to the creator economy, but is driven by continuous innovation. It is committed to expanding technology that constantly expands opportunities to improve these systems using YouTube data to protect against AI abuse.”
But already, creators say they are facing challenges from others who are using AI to recreate channels and reducing revenue and brand awareness.
“They train us as creators about what we are creating, but we don’t get anything in return for the help we provide,” said Cory Williams, creator of Silly Crocodile, a 44-year-old Oklahoma-based YouTube-popular animated character.
In other cases, people use AI to create deep-fark versions of creators, posing mistakenly to fans, says Vermillio’s bounty.
When people upload videos to YouTube, they agree to the terms of use of the company that grants YouTube businesses and their affiliates royalty-free licenses.
However, many creators said they didn’t realize that YouTube videos weren’t used to train VEOs until they read about it in media reports. Melissa Hunter, chief executive of Family Video Network, a family-centric creator consulting firm, said tools like Veo did not exist when they signed YouTube’s terms of service years ago.
In 2012, Hunter’s son (8 years old at the time) wanted to start a YouTube channel together. Her son, now 22, is opposed to AI for environmental reasons, so Hunter has kept those videos private. However, Hunter says Google can still watch those videos, and worries that she is being used to train VEO without permission.
“It’s frustrating and I don’t like it, but I also feel completely helpless to do something,” Hunter said.
Other social media platforms like Tiktok and Instagram also support content creators, but YouTubers have already built large audiences on Google’s platform and say they are reluctant to leave.
“Creators are in a tough place where this is the perfect platform to make money… to build real loyal fans,” said 27-year-old Jake Tran. “So, are you going to give up just because Google is using it to train AI?”
Last year, Tran’s YouTube business generated around $1 million in revenue. Tran is also the founder of the evil products of the Scottsdale, Arizona-based skincare business, whose business employs between 40 and 45 part-time and full-time workers.
Other AI companies, including Meta and Openai, have been fired by copyright holders who have condemned training in AI models on intellectual property. Disney and Universal Pictures sued AI Business Midjourney in June for copyright infringement. Tech industry executives say that they should be able to train AI models with content available online under the “fair use” doctrine.
Some legal experts believe that if a creator decides to bring their issues to court, the creator might file a lawsuit.
“There is room to argue that simply agreeing to the terms of service and that it may be something that could be discussed in the lawsuit, as you have not licensed YouTube or Google for AI training purposes.” “There is room for discussion on both sides.”
Eugene Lee, CEO of ChannelMeter, a data and payments company at Creator Economy, said he believes the only way creators can win is to use AI rather than fighting it.
“Creators must absolutely embrace it and accept it early and accept it as part of the production process, script generators, thumbnail generators. All of this is that it requires human labor with enormous amounts of time, resources and capital,” Lee said.
Nate O’Brien, a Philadelphia creator who oversees the finances of his YouTube channel, estimates that his revenue will be flat or slightly reduced, as it is more difficult to get attention on YouTube.
“It’s just a game of numbers,” O’Brien said. “But in general, I think people who make videos are still better or ranked than AI videos, and they may change in a few more years.”
To prepare for the growth of AI content, O’Brien is experimenting with using AI for videos on one of his channels, asking his assistant to use AI to deliver audio based on existing videos he created on another channel. The views don’t outweigh human-created videos, but the production costs for AI-generated videos are lower. One person has earned 5,000 views, said O’Brien, 27.
Some creators have chosen to share their video libraries with external AI companies in exchange for rewards. For example, Aaron de Azevedo, YouTube creator from Salt Lake City, who oversees 20 YouTube channels, said he shared 30 terabytes of video footage with an AI company for around $9,000.
“There’s a fair bit of change,” said De Azevedo, 40. “It was good, paid for most of my wedding.”
