There’s some truth in that old tune by The Buggles, “Video killed the radio star.”
Now video is taking television stars down too with 96% of 13-24 year olds watching online video content. In comparison only 81% watch scheduled TV shows.
Content creation is a large industry that is only getting bigger. Created in 2005, Youtube started with co-founder Jawed Karim’s video of his trip to a zoo. Now, 12 years later, 300 hours of video are uploaded every minute, and the site has over 1 billion users.
Originally just a platform for sharing videos, the site’s popularity has allowed some creators to turn their Youtube channels into a career by becoming vloggers or content creators. “Vloggers” are video bloggers – they record themselves, their lives, their talents on video and upload them for people to watch. “Content creators” make original content, whether that be gaming videos, comedy sketches or animations.
This may sound like a creative hobby that can get your skills and talents out there, and nothing more. But more people than ever are choosing this as a legitimate career path, and David Evans – Tax Partner at Sedulo accounting firm – says this is because the path is such an accessible one.
“A key attraction to vlogging is that anyone can do it,” Evans explains. “Mobile phones are all that’s needed to get started as a vlogger, so it’s a hobby that carries little to no overhead and can be easily juggled alongside another job.”
However, the money doesn’t start rolling in immediately. Only once vloggers and content creators have thousands of viewers can they make any real income from their content. When this stage has been reached and the Youtuber has a fairly large (a minimum of 10,000 subscribers is a good start) viewership, there are several ways to make money.
“Usually content creators generate revenue in one of two ways,” says Senior Partner at Seludo Lee Jones, “Through advertising, with the amount based on a combination of the number of views your videos receive and the size or demographic of your audience. Or on a retainer basis whereby an individual has a contract with a brand or company to produce a certain amount of content within a set time.”
While this sounds like a lot of money, it can be hard for Youtubers to break even on their videos with this income alone. The cost of equipment, editing programs and travel to film locations can be high.
In search for extra revenue, many content creators produce and sell merchandise or ask viewers to donate to them via platforms like Patreon. By doing this, Youtubers are turning their passion into an enterprise, and advisors like Sam Uwins are there to help content creators manage it.
Uwins is an accountant at Carpenter Box, and an associate at the company’s sector-specific brand Starbox. Having worked in the new media industry for 6 years, Uwins has much experience with clients who have turned their hobby into an enterprise.
“A lot of people upload content to Youtube because they love it,” says Uwins. “But uploading videos and wanting to make money from it is very different to wanting to set up a business. They didn’t mean to become a businessman or businesswoman, but they’re quickly having to adapt. Social influencers often look to expand into other business areas such as selling merchandise, and that’s an opportunity for us to provide an added-value service when an individual is looking to branch out into the merchandise world.”
Just as they don’t expect to become businessmen and women, content creators aren’t experts on tax and accountancy. It’s the accountants’ jobs to make sure their business model is financially sound.
“Trying to get them to prioritise tax and accountancy when they have more exciting things to do can be difficult,” explains Uwins. “During the first couple of years of working with them we’re also trying to educate our clients so we set them up for making key business decisions in the future.”
Having an experienced accountant is key for Youtube success. Whether to help manage a passion which suddenly became an enterprise, or to remind them to pay their taxes, their guidance is invaluable. Accountants can also remove financial uncertainty from creators’ minds, allowing them to focus on more exciting projects.
“Accounting and the creative industries couldn’t possibly be further apart from each other,” explains Uwins, “and that’s what we’re here for, to provide a service to bridge that gap. They can get on with what they’re good at, and we’ll get on with what we’re good at.”
Sophie Jardine is an editorial assistant at Flibl. She writes, researches and reports stories about finance and technology.