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Episode: Is YouTube’s disruption of TV now complete?
Author: BBC World Service
Duration: 00:22:59
Episode Shownotes
Earlier this year the global video sharing platform You Tube dominated TV viewership in the United States, knocking Disney off the top spot and leaving major media names like Netflix, Paramount, Amazon and Fox in its wake. In a first for the streaming platform, the time people spent watching YouTube
on television accounted for 10.4 percent of total TV in the month of July. In terms of its world reach, the platform is now available in more than one hundred countries and pulls in nearly three billion users every month, the majority of which are between 25 and 34 years old, that’s younger than the core audience for traditional television. Launched in 2005, YouTube has since expanded and diversified, but it’s niche area for dominating the market is still in user generated content and the advertising income it draws in provides the platform with its main source of revenue, leaving the traditional TV market in its wake.So, on this week’s Inquiry, we’re asking ‘Is YouTube’s disruption of TV now complete?’ Contributors: Mark Bergen, Reporter with Bloomberg Technology, Author of ‘Like, Comment, Subscribe: Inside YouTube’s Chaotic Rise to World Domination’, London, UK.Chris Stokel-Walker, Journalist, Author of ‘YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars’, Newcastle upon Tyne, UK Rahul Telang, Professor of Information Systems, Carnegie Mellon University, Co-Author of ‘Streaming, Sharing, Stealing: Big Data and the Future of Entertainment’, Pennsylvania, USA Dr. Marlen Komorowski, Professor for European Media Markets, Vrije Universiteit Brussels, Senior Research Fellow, Cardiff University, Wales, UK Presenter: Charmaine Cozier Producer: Jill Collins Researcher: Kirsteen Knight Editor: Tara McDermott Technical Producer: Cameron Ward Production Co-ordinator: Tim FernleyImage: Silhouettes of laptop and mobile device users are seen next to a screen projection of the YouTube logoCredit: Reuters/Dado Ruvić
Full Transcript
00:00:32 Speaker_02
This BBC podcast is supported by ads outside the UK. Hello, this is Jackie Leonard from the Global News Podcast. Let me tell you about our annual review of the happiest news stories of 2024. From the work of thousands to raise the magnificent Notre Dame Cathedral from the ashes, to the astonishing success of the chopsticks maneuver to catch a rocket booster as it came back to earth, to the young Irish rappers who went massively viral with an absolute banger of a tune. The Happy Pod. Just search for the Global News Podcast wherever you get your BBC podcasts. Welcome to The Enquiry, I'm Charmaine Cosier. Each week, one question, four expert witnesses, and an answer.
00:00:48 Speaker_02
July 2024, USA. It's an exciting time for YouTube.
00:00:57 Speaker_02
For the first time, Americans are spending the highest amount of their total viewing time watching the online video sharing platform on TVs. YouTube knocks Disney from the top of the chart, which also includes major media names like Netflix, Paramount, Amazon and Fox.
00:01:12 Speaker_02
The months that follow will see it pushed back into second place behind Disney and NBCUniversal. But its wider impact continues around the world, including the UK.
00:01:29 Speaker_02
There, again for the first time, less than half of 16 to 24 year olds are watching traditional television sets. They're spending more time on video sharing platforms instead.
00:01:37 Speaker_09
So this week we're asking, is YouTube's disruption of TV now complete?
00:01:44 Speaker_04
Part one, joke, threat, obvious.
00:01:47 Speaker_02
We have an entire generation that's grown up with watching YouTube. Mark Bergen is a reporter with Bloomberg Technology.
00:01:59 Speaker_04
He's also the author of Like, Comment, Subscribe, Inside YouTube's Chaotic Rise to World Domination.
00:02:04 Speaker_02
One of its strengths and the reason it's been so successful nearly 20 years now is that it can be kind of all things to all people. Nearly 3 billion people around the world use YouTube every month.
00:02:17 Speaker_02
Most of them are between 25 and 34 years old. That's younger than the core audience for traditional TV.
00:02:23 Speaker_04
As well as the website, it's available on apps, streaming sticks, video game consoles and smart TVs. It is by far the leading online video platform, the leading web advertising company in the world.
00:02:36 Speaker_04
It is the broadest and deepest catalog of video that the world has ever seen and probably will be for many years.
00:02:50 Speaker_04
It's certainly created this world in which we're now not only comfortable going online and getting virtually any video we want for free, But we sort of demand it.
00:02:54 Speaker_02
And we're kind of upset when we can't get it there, right? The expectation now is that we should be able to find anything and stream it immediately. YouTube launched in 2005. The first upload was a 19-second video of one of its co-founders visiting San Diego Zoo in California. A year later, Google bought YouTube for $1.65 billion.
00:03:14 Speaker_02
India is the biggest audience with over 400 million users.
00:03:17 Speaker_04
It's now available in more than 100 countries.
00:03:29 Speaker_02
Brazil, Indonesia, a lot of emerging markets where YouTube has effectively not even just replaced television, but it is the main source of television. It is the main source of entertainment.
00:03:34 Speaker_04
It's the main source of news in a lot of these countries. Mark Bergen says YouTube has developed over three eras. A former executive told me this once that they used to have this mantra that it was a joke, threat, obvious.
00:03:46 Speaker_04
And I think the first area was YouTube was kind of a joke, right? It was not taken seriously by the entertainment world or advertisers. Then they entered this new era where they became this threat.
00:03:55 Speaker_04
to traditional Hollywood, to the TV industry, they wanted to be a threat to Netflix and Amazon.
00:04:04 Speaker_02
YouTube was starting to lean into some of its bigger stars to make their own original shows that they would charge subscribers for, similar to how Netflix works. So in 2016 it launched YouTube Originals to make long-form and bigger budget content.
00:04:20 Speaker_04
But it couldn't keep up with Netflix's level of investment, so the unit was eventually disbanded in 2022. YouTube's current era is a much more confident one. They're in this third phase of being obvious and inevitable. Everyone knows what YouTube is.
00:04:29 Speaker_04
They are no longer the underdog taking on Hollywood. As we know, a lot of people use it as a utility, right?
00:04:36 Speaker_04
If you need to learn how to fix your sink or make a certain dish, it's a bit like it's owner Google. It's like Google search.
00:04:47 Speaker_02
It's virtually impossible to not find the thing you're looking for on YouTube, but there's also these kind of mini celebrities that anyone over 25 has never heard of, but younger people, they're more famous than Hollywood stars. The biggest of those YouTube superstars is Mr Beast.
00:04:59 Speaker_02
In June this year, the 26-year-old content creator overtook the Indian music label T-Series to become the most popular channel on the platform.
00:05:10 Speaker_02
He has just over 324 million subscribers who sign up for free to get alerts when his new videos drop, featuring challenges, cash giveaways and stunts.
00:05:21 Speaker_04
Advertising income is the main source of revenue for YouTube and its millions of famous and not-so-famous creators. They get paid every time an ad cuts into our video viewing.
00:05:31 Speaker_04
So for every dollar that an advertiser gives to run that ad, YouTube takes traditionally 45% and then gives the remainder to the creator or broadcaster behind the channel.
00:05:37 Speaker_04
When they started doing this in 2007, it was a very novel and risky idea of sharing money with broadcasters.
00:05:49 Speaker_02
But it's probably been one of the major reasons behind their success is because they can build up this economy where YouTube makes a lot more money and then the people making videos, if they are successful, can make a lot of money as well.
00:05:56 Speaker_04
YouTube does have some paid subscription options, but the bulk of the service is free if you want to watch or create your own channel.
00:06:14 Speaker_04
YouTube was the first one to birth this idea that anyone could be a star, but the idea when you kind of open the floodgates to anyone and have few rules and barriers, you're going to have a lot of content out there that the company and it's paying advertisers are really unhappy with. Regulators could really have a deep impact and cut Google and YouTube down. And we're seeing a lot of pressure now on because of a number of issues.
00:06:28 Speaker_02
And I think that certainly could end YouTube if lawmakers decide that the company is too powerful. YouTube is in a group of companies with a special legal advantage.
00:06:47 Speaker_03
It's helped it to flourish and shake up the world of traditional TV, as our next expert witness explains. Part two, slipping through the cracks.
00:06:55 Speaker_02
YouTube sits in a really interesting position where it sits above a lot of the laws that you might expect from it. Chris Stokel Walker is a journalist.
00:07:09 Speaker_02
He wrote a book called YouTubers, how YouTube shook up TV and created a new generation of stars. It's not regulated in the same way that traditional broadcasters are in many countries. So YouTube has a lot of content that would never make it past the strict editorial rules that TV networks have to navigate.
00:07:24 Speaker_02
To understand why that is, we need to go back to 1996, years before YouTube existed. That's when the U.S. Communications Decency Act was updated with Section 230.
00:07:35 Speaker_02
The idea was to shield tech companies which didn't have the time, money or staff to moderate content.
00:07:41 Speaker_03
It gave the developing sector space to innovate and grow without the fear of expensive civil lawsuits.
00:07:48 Speaker_03
It essentially says that they are not responsible for the content that their users post. Instead, they are kind of just the hosts.
00:07:58 Speaker_02
They pass through those videos and those bits of content, rather than being directly responsible for them and checking every single one. So YouTube is a platform, not a publisher. Users posting offensive content or comments can still be sued.
00:08:13 Speaker_03
Tech companies are some of the biggest in the world, worth billions of dollars, yet their Section 230 protection remains.
00:08:26 Speaker_02
We've given these platforms effectively a 20-year head start and we're starting only now to catch up with what the implications of leaving them to their own devices have been.
00:08:35 Speaker_03
That's not to say that platforms like YouTube are totally immune from external oversight. There are general laws and rules that apply to companies like copyright.
00:08:42 Speaker_02
There are ways that regulators can try and claw back some control against YouTube.
00:08:55 Speaker_03
In 2019, Google and YouTube reached what was then a record $170 million settlement over accusations of collecting data on children aged under 13 without their parents' permission.
00:09:11 Speaker_03
But generally, the platform takes advantage of the fact that it is simultaneously something that spans continents and therefore has no real single jurisdiction over it, and also is based on user-generated content.
00:09:20 Speaker_03
That platform-publisher dynamic means that they get away with an awful lot that maybe traditional broadcasters wouldn't. But that's not working as well anymore. YouTube often finds that when it missteps, it is taken to task by individual countries.
00:09:35 Speaker_03
So, for instance, in much more conservative Middle Eastern countries, YouTube has either been banned or severely censured for
00:09:48 Speaker_02
not following what's deemed as appropriate behaviour in those cultures, often revolving around inappropriate sexual content or adult content more generally, which would be acceptable on YouTube in the West.
00:10:02 Speaker_03
The European Union has also recently introduced two acts covering online safety and reducing anti-competitive behaviour by tech companies. One of the challenges with regulating content is there's so much of it. In YouTube's case, 500 hours of content uploaded every single minute.
00:10:12 Speaker_03
And so what you tend to see is, I suppose, a lack of oversight of that content.
00:10:20 Speaker_03
And because the people who are creating it are not necessarily media professionals, sometimes you see some pretty bad stuff.
00:10:32 Speaker_03
So you can often find issues around drug taking or excessive violence or sexual content, inappropriate content for minors being shown on children's channels.
00:10:40 Speaker_02
All of those are issues around the streamers and particularly around those user-generated content streamers like YouTube.
00:10:47 Speaker_03
YouTube has in-house rules for policing its platform. It's a mix of human review and automated screening of content. So they have their content moderation, but then they also have their community guidelines.
00:11:05 Speaker_02
So YouTube's content guidelines say that you have to be polite, you have to not incite violence, you can't use hate speech or slurs.
00:11:10 Speaker_03
And in most people's cases, they do follow those rules. So what happens if they don't abide by them? What kind of punishments can they expect?
00:11:19 Speaker_03
Users who don't follow the rules can expect to maybe get a caution or eventually get a ban. You can have, for instance, your videos demonetized.
00:11:35 Speaker_02
Now, so the idea that your content would be demonetized, in this case, not having adverts shown against it, which means that you don't make any money off it, can be a pretty significant disincentive for YouTube creators to not break those rules.
00:11:41 Speaker_02
One of the most notorious content rule breaks involved one of the biggest YouTubers, Logan Paul.
00:11:58 Speaker_03
In 2018, when his channel had 16 million subscribers, he uploaded videos of him tasering a dead rat and his footage of, and commentary on, a dead body in a forest in Japan. YouTube temporarily demonetized his channel and paused some business deals.
00:12:09 Speaker_03
Logan Paul remains on YouTube today and has still got a legion of fans that follow him round. He made a few apology videos, he showed what was deemed by his fans as sufficient atonement.
00:12:19 Speaker_02
There are still a lot of people who really dislike him because of that, and perhaps understandably so, but ultimately, yeah, his fans did forgive him.
00:12:24 Speaker_03
Logan Paul currently has more than 23 million subscribers.
00:12:30 Speaker_03
The current regulation system isn't really fit for purpose. And that's because of a number of different reasons. One is we didn't imagine that these platforms would grow so big so fast.
00:12:50 Speaker_03
And we're in this challenging situation where everybody recognises that there's something wrong and that this is causing issues. But we haven't really come to a conclusion as to how we fix it because
00:13:03 Speaker_02
Politicians are having to do this in a way that is difficult for them because big tech companies move very fast and good regulation moves very slow.
00:13:17 Speaker_10
So if lawmakers are struggling to contain YouTube, maybe other companies can dull its commercial edge, or maybe not. Let's meet our next expert witness. Hello, this is Jackie Leonard from the Global News Podcast.
00:13:26 Speaker_10
Let me tell you about our annual review of the happiest news stories of 2024.
00:13:44 Speaker_09
From the work of thousands to raise the magnificent Notre Dame Cathedral from the ashes, to the astonishing success of the chopsticks manoeuvre to catch a rocket booster as it came back to earth, to the young Irish rappers who went massively viral with an absolute banger of a tune. The Happy Pod.
00:13:50 Speaker_08
Just search for the Global News Podcast wherever you get your BBC podcasts.
00:14:05 Speaker_02
I mean, 10 years ago, the television or the streaming companies would have never thought that the YouTube will be the competition to them, because at some level, they serve different kind of content.
00:14:18 Speaker_08
Rahul Talang is Professor of Information Systems at Carnegie Mellon University in Pittsburgh, Pennsylvania. He's co-author of Streaming, Sharing, Stealing, Big Data and the Future of Entertainment.
00:14:35 Speaker_08
But nowadays, I think for Hollywood, YouTube is probably one of the biggest competition than they have. So even for the Netflix, even for the Disney, obviously for the TV network, I think YouTube has become a formidable competition. And there are a few reasons for that.
00:14:54 Speaker_08
One of the great advantage of YouTube is it is serving the content created by the user. It is not figuring out what is going to be trend. So if you're a TV media industry, you're a streaming platform.
00:15:08 Speaker_02
you have to think about will this content become successful and then you create the content, it takes time, sometimes some content is successful, sometimes some content is not.
00:15:18 Speaker_08
For YouTube, that is not the question. So YouTube, actually think about it, takes no risk. There's also YouTube's detailed insight when it comes to knowing exactly what we watch, like and share.
00:15:35 Speaker_08
One critical thing that distinguishes YouTube from the traditional television market whether it's Netflix or the linear television, where they are showing the content and the consumers are watching it.
00:15:51 Speaker_08
YouTube is more active and that allows them to serve very personalized ads. That's why YouTube ads sometimes tend to be more efficient
00:15:56 Speaker_02
because YouTube knows exactly what you liked in the past. Other players don't have that ability, they don't have that personal connection.
00:16:08 Speaker_02
There are areas where TV broadcasters still dominate, like live sports games.
00:16:13 Speaker_08
Another advantage over YouTube is the ability to buy or produce high-quality long-format shows.
00:16:23 Speaker_08
However, the media companies concerned about YouTube can't ignore it, because they need it too. You know, they're promoting a lot of their content on YouTube.
00:16:33 Speaker_02
So when they're coming with a new show, they actually want YouTube promoting that content. So they are trying to take advantage of the YouTube reach and how it is promoted and how it is distributed.
00:16:54 Speaker_08
The audience measurement firm Nielsen revealed that YouTube had the highest share of US TV viewing time for July, with 10.4%, but it also noted that top spot coincided with school holidays, so there were more younger people than usual with more free time to watch. But that doesn't mean YouTube's achievement should be underestimated. Traditional TV has been more affected by the streaming companies.
00:17:09 Speaker_02
People have found YouTube to be more interesting compared to what it was like four or five years ago. The amount of time spent on the YouTube has gone up significantly.
00:17:24 Speaker_08
Traditional TV is worried about YouTube, but YouTube doesn't view it as a threat to its business.
00:17:32 Speaker_02
Instead, it's watching the continued rise of a popular video sharing app that's also big on creators and which might be its closest rival. YouTube is very diverse, so there's no obviously direct competition. I would say TikTok will be maybe a competition in terms of eyeballs.
00:17:46 Speaker_08
Eyeballs is a tech and media industry term for a business strategy that relies on views for success. So all this is really a massive fight to attract our attention and keep it. think about something like TikTok, where it has really figured out how to entertain the people.
00:18:07 Speaker_08
And, you know, I do some research, some user can spend five, six, seven hours on TikTok watching the reels. The user attention has become the key asset.
00:18:21 Speaker_08
Everybody's trying to gather user attention. So you can think of all of that potentially as a competition. But right now, YouTube is so diverse, so big, it has an edge over pretty much anything in the market.
00:18:42 Speaker_09
The content tends to be more diverse, more appealing, more interesting, that attracts more users to actually watch it. So that's a very sweet spot.
00:18:46 Speaker_06
It's very hard to compete with that business model. So what will YouTube do next? Time for our final expert witness. Part four, back to basics.
00:19:11 Speaker_02
Based on our research and working with the media sector and the streaming market, we can see that YouTube kind of redone their strategy by refocusing on their core business, which is focusing on ad revenue and content creators.
00:19:23 Speaker_06
And this can be seen as a very strategic step moving into what they used to do best as well.
00:19:30 Speaker_02
Dr Marlen Komorowski is Professor for European Media Markets at the Freer University, Brussels, and Senior Research Fellow at Cardiff University in Wales.
00:19:39 Speaker_06
We can see, for example, that they try to push more advertising into their YouTube content. Last year, YouTube generated $31.5 billion from ads. That's more than 10% of its parent company Google's total revenue. If it comes to growth, they still have very good numbers in that area.
00:19:58 Speaker_06
They explore still different markets. And if it comes to how much they generate in terms of returning users, that's quite extraordinary.
00:20:10 Speaker_06
If it comes to other growth patterns of these kind of platforms, they still have worldwide shown that they are one of the biggest investors into content creation.
00:20:21 Speaker_02
only Disney spends more money. So they spend nearly 20 billion into content in YouTube worldwide.
00:20:29 Speaker_06
And that's one of the most impressive numbers I've heard in the media sector.
00:20:36 Speaker_06
Investing in creators is core to YouTube's goal of capturing our attention. So being part of Google is useful for developing and updating features. This fits into the strategy of supporting more of the user generated content and actually producing content.
00:20:47 Speaker_06
They are working on services that help content creators to create subtitles for their content or to even translate their whole videos automatically.
00:21:02 Speaker_06
I saw there is a new idea that as soon as one of the content creators says in the video subscribe, that they basically use AI to identify that moment and then put a visual cue on the subscribe button for the people on the platform.
00:21:23 Speaker_06
So these kind of things of really automated recognition, automated video creation, everything that helps content creators, that is much more going in the direction of AI tools. It's also taking on TikTok.
00:21:33 Speaker_06
Four years ago, YouTube introduced Shorts, smartphone-friendly vertical videos no longer than a minute. TikTok used to be the first ones who did these formats, the YouTube Short. formats try to compete with this, and Instagram and Facebook also have the same format.
00:21:47 Speaker_06
There's lots of success in these short formats, and YouTube is really trying to get into that market as well now. They are testing out certain new features and services, and then they drop them again if it's not being picked up as well.
00:22:04 Speaker_06
But overall, it's good for the competition in the market, and it also means that there will be continuous innovation in that streaming market around YouTube and also other services. With no direct competitors and a growing global audience, YouTube might seem unstoppable.
00:22:22 Speaker_06
YouTube found its own niche area for dominating, and that's user-generated content. But they are competing with TV broadcasters, the traditional ones. They're competing nowadays with video game platforms, streaming platforms like Twitch. They're competing nowadays with social media. But they always need to watch out what their competitors are doing.
00:22:47 Speaker_06
What we can see, especially if it comes to internet services or digital services, that it's much easier to disrupt, as you might imagine. And one of the recent examples was TikTok. Everyone was thinking that Facebook has way too much power and no one would ever leave that platform.
00:23:03 Speaker_02
And what we can see now across the demographics, that Facebook is now only being used by much older generations, while young generations never had or not using any more the platform at all. and the same can happen with YouTube.
00:23:16 Speaker_02
So is YouTube's disruption of TV now complete? YouTube's decision to dismantle the unit making its own original content has put an end to direct competition in commissioning.
00:23:30 Speaker_02
But the disruption isn't over yet, because the indirect results of focusing on reinforcing its core activities is making it an even bigger threat. It's already the main daily digital habit for millions of people around the world. Investing in its global creator community, growing ad revenue and easy anytime access to content
00:23:49 Speaker_02
is keeping eyes on YouTube and away from traditional TV.
00:24:04 Speaker_05
This edition of the Inquiry was presented by me, Charmaine Cosier. The producer was Jill Collins, researcher Kirsteen Knight, editor Tara McDermott, and technical producer Cameron Ward.
00:24:16 Speaker_05
Hello, this is Jackie Leonard from the Global News Podcast. Let me tell you about our annual review of the happiest news stories of 2024.
00:24:26 Speaker_05
From the work of thousands to raise the magnificent Notre Dame Cathedral from the ashes, to the astonishing success of the chopsticks manoeuvre to catch a rocket booster as it came back to earth, to the young Irish rappers who went massively viral with an absolute banger of a tune.
00:24:37 Speaker_07
The Happy Pod. Just search for the Global News Podcast wherever you get your BBC podcasts.