I began a Youtube channel in 2009, and despite the dire quality got quite a few views. But, I decided there was no future in making videos, so I stuck to writing a blog. In the summer of 2022, my website traffic was stagnant and I was looking for a way to boost my website, so I started making videos on Youtube to embed in the website. These videos got a few views but not too many.
The thing is that once you start making videos on Youtube you can’t help but be attracted by the lovely statistics that are offered to you on how many people are watching. If you spend several hours on a video, you prefer if more people watch them. My early videos were very low return. Quite a few hours preparing, shooting and editing, and then a few hundred people might watch. If you get 500 views, you might earn £1.00. I remember making a video on the Problems and strengths of the Chinese economy. It was a good video and it got a few hundred views. But, then I noticed there were quite a few videos with titles like Chinese economic collapse which had a few million.
BTW: Just a little detour, the idea the Chinese economy is going to collapse is absurd. True there are real problems, and it is a real crisis in the property market, but the real Chinese crisis is that economic growth is less than in the past. There’s not going to be a collapse
This graph highlights past UK economic crisis, and UK real GDP since 1800. We can see the slump after the First World War, the Great Depression, the 1970s oil crisis e.t.c. But, the point is despite these crisis, living standards continued to improve significantly. China will go through something similar, – set backs, but no collapse.
As a youtube creator, you soon learn that the click-through rate is incredibly important. This is the percentage of people who click on a thumbnail shown on the home page. Last November I made a video “Good economic news you’ve probably not heard about – 5 Reasons to be hopeful” This video had a click through rate of 4%, which in Youtube terms is quite poor. Therefore, youtube do not want to show this video to many users. After 6 months, the video got 1,600 views.
Now compare this to a more successful video. UK Housing Crash 2023? Are Prices set to Fall?
This was getting a click through rate of over 10%, so youtube started sharing the video to a much wider audience. After a similar time period, it notched up 400,000 views.
This is a huge variation – and it perhaps shows we are more drawn to the prospect of falling house prices than reasons to be hopeful.
Now what about the economics of making a youtube video? I love economics and I like making videos, but the truth is they are very time-consuming maybe 12 hours per video. As a very rough rule of thumb 1,000 views will make you £3. The first video on “reasons to be hopeful” made £5. Which is an hourly rate of around £0.40. By contrast, If you get 100,000 views you can make over a £300 – a good hourly rate. Now I should add click-through rate is not everything. The video also has to be good, and keep viewers engaged. But, if you have a low click through rate, the video will soon become hidden by youtube, and so there’s less incentive to make them.
Generally videos on economic crisis and potential collapse, all trigger our brain to be curious or fearful. Therefore we are more likely to click on them and so youtube are more likely to recommend them and so content creators are more likely to make them. It’s a self-reinforcing loop.
Now there is a danger, that if there is a financial motivation to make videos about crisis, you can start to cherry-pick data to fit a certain narrative. I could, if I forced myself, make a video about a Chinese economic collapse but it would be very unbalanced. In the last video about the UK housing market – I looked at reasons prices are likely to fall, but also the factors supporting prices preventing a bigger collapse. Clickbait is good, but in long-term, most people want a fair summary without bias.
However, I will make one confession. I made a video about the costs of Brexit. I quoted a statistic from Mark Carney former governor of the Bank of England. In FT, he claimed in 2016, UK GDP was 97% of Germany GDP. But in 2022, had fallen to 70%. This makes it look a spectacular decline in GDP. But, I agree the statistic is misleading. It stems from relative decline in Pound, rather than different growth rates measured in PPP. I should have been more wary about this statistic. There are many good examples of the costs of Brexit –but this Mark Carney statistic is not a good one.