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    Share to Linkedin The first time I realized the true potential of YouTube was when my children were very young. A few of my boys were sitting on the floor staring at the television and completely enthralled with what they saw — a grown man playing with toys. I wondered what the heck was going on.

    Alphabet CFO Ruth Porat told investors during an earnings call on Monday afternoon that YouTube pays out a majority of that advertising revenue to its creators. Top creators tend to earn the most ad revenue via higher rates — as long as their content is advertiser-friendly — because they generate a large number of views.

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    YouTube has gone through a turbulent period over the last few years, and one of the biggest complaints creators have had is content being deemed not suitable for advertisers, preventing them from making money. Some creators have argued that demonetized videos also lead to suppressed views.

    Corporate metrics and valuation Video transcript Voiceover: What I want to do in this video is to see if we can understand all of the different parts of kind of a traditional income statement. As we get into more and more complicated examples, you'll see more and more complicated income statements, but this is a good start. What I've done here is I've drawn the income statements for actually two businesses. One is Ben's Shoes, and one is Jason's Shoes. I did that because these are fundamentally the same business, but they have a slightly different capital structure, and we'll talk about what that means in a second, but they're both shoe stores.

    Bottom line: new advertiser-friendly policies that have rolled out over the last couple of years have made many creators bitter toward YouTube. That might feel unfair because they missed out on that honeymoon period. The reality is they missed out on the hardship that comes with being a pioneer, when there was less advertisers and advertising money going to creators.

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    You have an adpocalyse that happened for various of other reasons, which caused a bunch of problems for the platform. The company also has more than 20 million subscribers across its Premium ad-free YouTube and Music Premium services, according to Google.

    Creators also see revenue shares from people who watch their videos with a YouTube premium subscription, and Google is planning to continue investing in these services as they drive additional revenue. Rinse and repeat.

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    They earn a portion of revenue from viewers who watch their videos and subscribe to YouTube Premium. We regret the error.

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