YouTube is the ‘ultimate’ modern day MLM

That’s right, I went there.

Multilevel marketing (MLM) is a strategy that some direct sales companies use to encourage existing distributors to recruit new distributors. In MLM schemes, there can be hundreds or thousands of members worldwide (or in the case of YouTube, Instagram and the likes, millions upon millions), but relatively few earn meaningful incomes from their efforts, indicating a possible pyramid scheme. Multilevel marketing is also referred to as ‘referral marketing’.

The entire premise of multilevel marketing is that people make sales for a company without being actual employees of that company. The ‘consultants’ make a small commission for their work and those higher up at the company will always be the one’s making real money. While companies like LulaRoe, Amway, Mary Kay Cosmetics and Avon might be struggling in a pandemic-ridden 2020 due to the structure and nature of their corporate pyramid, YouTube has been reaping the rewards of their corporate pyramid one-hundred-fold over the past decade.

Before you roll your eyes, hear me out!

Content creators are not employees of YouTube. They’re consultants. They don’t get benefits. They don’t have taxes taken off of the money YouTube pays them. They don’t earn a regular income. They’re paid based on performance. And, if they so like, they can take some of that payment from YouTube and put it directly into the membership costs of belonging to a YouTube network that promises to help them grow their platform. Furthermore, YouTube relies on content creators to bring in new creators and grow the YouTube platform further and bring in more money. In the case of YouTube, content creators are selling advertisements.

Now, let’s compare YouTube to Mary Kay Cosmetics, a widely known MLM. Mary Kay Cosmetics does not hire employees, they instead opt for a company structure that sees consultants making sales for the business, and, bringing in new consultants. Consultants are not paid a regular income, instead they earn based on performance. The more they sell, the more they earn. Mary Kay Cosmetics consultants also have the option to take their earnings and put it towards a network that will allow them to grow their platforms, and (hopefully) in turn sell more makeup.

Sounds familiar, right?

YouTube operates monetization on a sliding scale. Content creators are required to meet certain thresholds with their channel in order to even become monetized in the first place. As an audience grows for a particular content creator, new opportunities open up for them on the platform, such as being able to live-stream, finally earning a portion of the adsense dollars that YouTube is already making from their videos, and eventually even being able to open up their own ‘Membership structure’ for their channel in which people can pay the content creator directly for things like shout outs or sneak peaks. The better you perform, the more chance you have to earn. But also, if you don’t perform at all, it does not hurt the company whatsoever.

Mary Kay also operates their pay structure on a sliding scale. Sales consultants are required to make an initial investment in the company and sell ‘x’ amount of dollars worth of product before they’re able to even earn a profit. Depending on the amount an individual is able to sell, Mary Kay opens the opportunity for said sales consultants to earn bonuses – these can be anything from extra commission to free trips to the chance to drive a pink, branded car. The better that you perform, the more chance that you have to earn. But also, if you don’t perform at all, it does not hurt the company whatsoever.

In both cases, networking is pretty key to finding any sort of moderate success.

Now, wait a minute, wait a minute. The initial investment into a company like Mary Kay Cosmetics is one that you pay directly to the company. What is the initial investment in YouTube?

I’m glad that you asked.

While the initial investment one must make to begin a YouTube channel is not paid directly to the platform itself, you are required to have some form of technology – be it a phone, camera or computer – that allows you to film, edit and post videos to the platform. No, you don’t buy those phones, cameras or computers directly from YouTube. But, what you do give YouTube is your time. And time is valuable. For reference, when you’re just getting started with video editing, it can take as much as thirty hours to edit a single ten minute video. For someone like myself, last year I worked for an economic development firm part-time. The hours weren’t regular, but when I was working, I was earning $20 an hour. If I spent 30 hours on a project, I would earn $600. For a new content creator on YouTube, until they reach 4,000 hours of watch time, 1,000 subscribers or more and compliance with YouTube’s community guidelines, they’re not earning a single cent. That’s 30 free hours of work they’re providing YouTube with, each time they upload a video.

Depending on the content creator, it can take a couple of months before earning monetization, or it can take a few years. This is why hustle culture on YouTube can, at times, be very toxic… which is not unlike the culture among any MLM company on earth. In YouTube, and in Mary Kay Cosmetics, the deck is stacked in favour of the bold, the beautiful and those who are the most ‘commercial friendly’. But, when you’re getting the tips and tricks of the trade from someone in the trenches, they’re not going to tell you that.

Someone with heavy investments into Mary Kay Cosmetics is definitely not going to tell you how hard it is for them to earn an income because they need you to sign up to help boost the income they’re struggling so hard to earn.

Someone with heavy investments (yes we’re counting time and money) into YouTube isn’t going to tell you the cost/value ratio of a single YouTube video because the minute they do, they’re going to lose out on opportunity for earning potential. Yeah, there’s a reason why YouTuber’s don’t comment about how much money they make. The moment they do, YouTube can flag their channel and decrease their earning potential. And, in an industry in which their money isn’t guaranteed, they don’t want to risk earning less if they don’t have to.

In a 2020 world, especially with the ongoing pandemic, marketers and large corporations have realized that there’s a certain je ne sais quoi about having regular folk advertise their products. What better way to do that then to enter every person’s home/life through the technology they already have. Advertisers pay YouTube to be able to run commercial campaigns during videos on the platform. In turn, YouTube promises advertisers that their ‘Consultants’ (Content Creators/Regular Folk) will bring enough people to the platform to bring a valuable return on investment in said advertisement. When you really stop to think about it, this isn’t that far removed from well known MLM companies that do the exact same thing through Instagram and, in a lot of cases, YouTube as well.

Somehow, though, YouTube has morphed itself into a ‘Legal’ pyramid scheme. One where those at the top get richer, and those, even in the upper echelon of the platform, still seek out sponsorships and affiliate codes/links to earn the majority of their income.

YouTube was estimated to earn more than 15 billion dollars in Ad Revenue in 2019. (From Business Insider) Only between 10-30 percent of that revnue is distributed to the content creators who are responsible for earning that income in the first place. That means that between millions of content creators who earned YouTube that 15 billion dollars, high-end estimations of that would suggest they shared 4.5 billion. And that’s being reaaaaaaaaaaaaaaaaaaaaaaaaaally generous.

Sure, a portion of 4.5 billion sounds great, right? Let’s say that there was 4.5 billion to go around and approximately one million channels on YouTube to split that among. That’s $4,500… for a year of work. Now take into account that those dollars aren’t being spread evenly. Those who performed better are going to be earning a larger piece of the Adsense pie. Realistically, the dollar amount a content creator could be making from YouTube could be absolutely abysmal compared to a regular nine-to-five job. This is why there are sponsored videos, affiliate links and free giveaways. But that’s a story for another day!

The pandemic has hit this world hard. People who work for companies like Mary Kay Cosmetics can’t just go do what they’ve always done because hosting a ‘Mary Kay Party’ to show off the merchandise isn’t exactly recommended when there’s a deadly disease sweeping the planet. They’ve taken to Instagram and YouTube and made some sponsored content of their own to try and keep their company afloat amidst all that is going on in the world. And, while the blow YouTube might be suffering due to the pandemic isn’t quite as large, they’re hurting too. It’s not easy for companies to produce advertisements for YouTube when their entire staff is/was working from home. For this reason, YouTube has recorded a loss in their second quarter profit earnings from ad revenue. That is also the reason why there are so many more ‘this video is sponsored by’ and ‘this product was gifted from’ videos circulating YouTube. In a work-from-home world, content creators are learning the already low revenue they were earning from adsense is going to be even less in 2020.

What really gets me, though, is when I’m watching a YouTube video and there’s an advertisement for an MLM company or product within the video itself. It’s become a bit like Russian Nesting Dolls… an MLM within an MLM, within an MLM. As the world continues to adapt to circumstances around us, these instances are only going to become more and more prevalent. Especially since YouTube won’t be going anywhere any time soon.

And, because I went ahead and called them the ultimate modern day MLMi in the title, I will add that where struggling MLMs require high investments for you to even test the product, all that is required to test YouTube is technology and boredom. Thus making them a far superior MLM to any other in existence right now.

Choosing to save your money for travel.

When you make the commitment to travel, you make a commitment to forgo other things in life in order to travel. At least, if you’re the majority of the population that’s the case. Some people are born independently wealthy (I’m jealous of you if you are/were) and don’t have to worry about saving money, but for the rest of us, the fact is, we have to plan if we’re going to see the world.

For me, the prospect of travel is an important one. I want to run away on my long weekends rather than staying home. I want to say that I’ve been to all of the continents and keep a running tally of all the countries I’ve visited. I want to collect tiny a vile of sand from every beach I visit. To do this, I knew I needed to get serious about my finances.

I’m quite lucky in that, in spite of not being employed presently, I still have a couple of trips on the docket for 2019. When you’re going to travel the world, here are some realistic tips for saving your money because, after all, it’s better to save your money to have more to spend there!

  • Meal Prep. Meal prep is helpful because it causes you to make use of the food that you already have. If you’re eating the food that you have prepped in your fridge already, you’re not going to be tempted to eat out – thus saving that money. Take that money you would have spent on your fast food dinner and put it in your piggy bank. Literally. Furthermore, if you’re meal prepping you’re making better use of the groceries that you purchase and therefore you will find your grocery bill going down each month.
  • Have a piggy bank. This one might sound weird, but it’s oddly motivating to see the money in your piggy bank grow. If you can get a clear piggy bank, that is the most motivation because you can see when you put those five, ten and twenty dollar bills in there. The more money that’s in your piggy bank, the more you’re motivated to fill it.
  • Automatic withdrawal from your pay cheque. When you get paid, set aside an amount of money that is automatically coming off the cheque. You’re not going to use it, you’re not going to spend it. It’s going towards your travel dollars. Whether it’s $20 per cheque or $100 dollars per cheque, telling yourself that you get zero access to that set amount every pay cheque can add up in a year.
  • Cut the luxuries. I’m talking about things like Netflix and Itunes Music and your subscription services. The average person has 3-4 of these, minimum, and if you cancel all of them that is hundreds of dollars in a year that you’re saving.
  • Don’t drink when you’re out. Going out to have alcohol, whether with your friends or your significant other, the markup on alcohol is ridiculous. If you like a nice glass of wine once in a while, do it with your friends at one of your home’s. You’re going to enjoy it more without the extra noise of a club or a bar, and, you’re going to save a lot of money when you’re not spending $14 on a glass of wine.
  • When you’re shopping – shop sales. I know this can sound awful to some people, but it can be really beneficial if you’re smart about the way you shop. We all have things we need in life, like a winter jacket or a new pair of shoes. Right now, on the North Face website you can purchase a winter jacket from last year’s collection for $125, rather than $500. This savings is solely because it’s last year’s coat. North Face jackets never go out of style, and honestly, no one’s going to know that it’s last year’s coat. Whereas you might have previously budgeted several hundred dollars for your winter jacket, you can now take that extra money and put it into your vacation fund, wear your new Northface coat and no one will be any the wiser.
  • Track your finances. This is the most important aspect of all. If you’re looking to save money for travelling, track your finances. Being able to see on paper, or an excel spreadsheet, where your money is being spent will help you to realize where you’re spending too much and where you can cut. After all, you are not going to become a millionaire over night, so, if you want to travel the world you need to know where you’re going to cut money from in order to put it into your travel budget.

As you’re saving for your trip and cutting money from other places in your budget, please remember for your own peace of mind that you need to treat yourself once in a while. Don’t cut everything from your life cold turkey in order to save for your trip, that will make you miserable. Buy yourself that chocolate bar on the day when you really need some chocolate. Just make sure that it’s a once in a while treat and not an every day treat.

Hopefully, if you’re smart about it, you’ll be sailing off into the sunset of a beautiful trip in no time. Because I am a firm believer that it’s far more important in life to collect experiences rather than things.

Go forth and travel the world.

Day 26: Money can’t buy happiness.

Actually, money can’t buy a lot of things. But, as I sat in the salon listening to the woman next to me complain about her husband, her children, her home, her life and her motivation, I couldn’t help but think that she was the perfect example of that statement.

Wearing a diamond ring larger than any I’ve seen before, fumbling through her $5,000 purse to find her car keys to shut the car alarm of her $150,000 Mercedes, she continued on about how her husband doesn’t listen to her. About how he doesn’t care. About how when she gets upset with him his response is to buy her something new. Be it diamonds or electronics or vehicles, he’s bought it all for her and he still hasn’t learned that what she wants most is for him to listen.

As she continued on talking about how her children were spoiled brats who didn’t understand the values of anything in life, I couldn’t help but wonder if she played a hand in making them that way. I don’t think it was intentional, but I do think that when they’re not looking, parents play a larger role in passing on bad behaviours to their kids then they believe.

Here’s the thing: the woman was clearly very depressed with her life. Something that seemed quite ‘beautiful’ from the outside, at a personal level was tearing her up. She was not happy. And maybe too afraid to do anything about it. (That last part is absolutely speculation) And, as I watched what seemed like a perfect exterior fall apart in a salon chair, I couldn’t help but think about the fact that material possessions are nothing more than that. Possessions can’t give peace of mind. Possessions can’t make you happy. Sure, they can make things easier, if you use them properly. But they won’t buy your happiness.

I’ve never been someone to be wowed by fancy things. With a whole world out there to explore, I have no desire for diamonds, I desire experience. I want to walk with penguins in Antarctica and go cave diving in Madagascar. I want to see the whole world. And yes, money is needed to travel. There is a bit of a catch-twenty-two there. But watching her, clearly deeply unhappy with her life and how it’s turned out, I was reminded that experiences are far more important than things.

She, for me, will serve as a reminder that things are not necessary. Money can’t buy happiness. Money cannot buy peace of mind. Actually, money cannot buy a lot of things. Money can’t buy:

  • Respect
  • Truth
  • Work-life balance
  • Natural Beauty
  • Manner
  • Common Sense
  • A clear conscience
  • Purpose in life
  • Integrity
  • Good Friends
  • A long life
  • Close-knit family
  • An open mind
  • A worry-free day
  • Trust
  • A new beginning
  • A great idea
  • An honest politician
  • Peace of mind
  • A good hair day
  • Patience
  • Luck
  • Happy Memories
  • Time to relax
  • A strong work ethic
  • A positive attitude
  • A happy home
  • Good Karma
  • Blessings
  • Appreciation and love of the simple things
  • True Love
  • A new shot at a missed opportunity
  • Peace in the World
  • A golden anniversary
  • Talent
  • A second chance
  • Quality time with the ones you love
  • Wisdom
  • Happiness
  • Intelligence
  • Humility
  • A good reputation
  • A 25 hour day
  • Youth
  • Experience
  • Class
  • Justice
  • Perspective
  • Selflessness