Behind the Numbers: How YouTube Became TV’s Most Watched Platform on Its 20th Birthday – What’s Next for “Planet YouTube”?
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Hey gang, it's Friday, April 7th. Bill Jasmine and listeners, welcome to Behind the Numbers, an eMarketer video podcast. I'm Marcus and today we'll be discussing YouTube. Join me for that conversation. We have two people. Let's meet them. We start with our principal analyst covering the UK based in a charming little seaside town on the south coast of England. It's Bill Fisher. Hi Marcus. Hello everybody.

Hello there. I'm also joined by principal analyst and VP based in California where the beaches just aren't quite as nice as England's. It's Jasmine Enberg. Hey Marcus. Hey everyone. Hello. Today's fact. Is it better to be an early bird or a night owl? There's one economist article was questioning. Jasmine I know gets up very early. Bill, where do you land? Early bird. Perhaps she's the one. As well. Two of the worst people ever.

Okay, apparently we don't have a choice what we are. We're actually born as one or the other. Sometimes we're somewhere on the scale and we're stuck with it for life. A person's chronotype, which is what scientists call it, is largely a product of our genes. So it's very hard to try to become one or the other. One episode of NPR's podcast Morning Edition explains that your body's circadian rhythm decides whether you're an early bird or a night owl, saying the body is an

orchestra of organs, each providing an essential function. In this metaphor, the circadian rhythm is the conductor. Most folks, about 30 to 50% land in the middle.

of the chronotype bell curve sleeping from 11 p.m. to 7 a.m., according to the American Sleep Association. Another 40% are either slightly morning people, slightly evening people, off by an hour or so one way or another. And then you have folks at the extremes as well. I'm assuming, Marcus, you're a night owl based on the way that you presented this. Absolutely, yeah. The best of us are.

Science and health editor for Vox, Brian Resnick, explains that if we try to live out of sync with these clocks, our health likely suffers. The mismatch between internal time and real world time has been linked to heart disease, obesity and depression. So be yourself. Always good advice. I've heard this. It's the industrial revolution that screwed us up, right? Oh, tell us.

Well, it's forced us into this artificial work day. I mean, prior to that... Oh, of 9 to 5. Interesting. Yeah, the hunters woke up early and did the hunting. That's you and I, Jasmine, and the other guys like you, Marcus, you just sat back and waited for us to take the food. Yeah, and you're late, by the way. I have to say, though, my...

Sleeping and wake up time habits have changed over time. I think part of the reason I wake up so early is just a function of the fact that I live in LA and I'm three hours behind New York. So by the time it's 6am here, it's already 9am in New York. And then you kind of just get used to it.

See, this is why another reason to move to England where the beaches are so much better. Anyway, today's real topic. Honestly, today they probably are. It's raining in LA. Oh, I know. Bill, any different there? It's beautiful. 20 degrees sun. That's a lie. It's not. It's true. That's remotely true. Is it really? Yeah. We're having a mini heat wave. All right. We'll fact check that later. April. Uh,

YouTube turns 20. What's next?

On Valentine's Day, YouTube turned 20 years old. As Taylor Haney of NPR explains, three former PayPal employees launched YouTube.com two decades ago. Originally intended as a dating website, he explains that the co-founders Steve Chen, Chad Hurley and Jawed Karim struggled to attract users, so they created YouTube's first video themselves, titled Me at the Zoo. It wasn't long before the platform exploded in popularity in 2014.

An Economist article noted that folks had spent 140 million hours watching Gangnam Style. Just one video, the most popular video at the time. The piece noted that with that time, 140 million hours, humanity could have built 20 Empire State Buildings, six Burj Khalifas, the world's tallest building, or another one and a half Wikipedias.

Instead, we watched that video. Fast forward to today and YouTube just became the world's most watched platform on televisions. As of February, YouTube captured close to 12% of all TV viewing. All of it, streaming and traditional combined, with folks spending more time on the platform than people spend with all of the former...

number one Disney company's properties. So Disney+, Hulu, ESPN+, all of Disney's legacy channels, ABC, ESPN, and others are

YouTube is watched more than all of those combined on televisions. This milestone marks a 50% increase in YouTube share from two years ago and reinforces the platform's growing prominence on the bigger screen in our homes. Our colleague Jeremy Goldman writes, Bill, I'll start with you because you've been working on some YouTube research for us, YouTube and marketers. What do you think has contributed to this milestone the most? YouTube being the most watched platform on televisions.

I think we need to take a look at demographic groups. We often look at the youngest groups to sort of map what might happen in future. And a lot of the research that we see is that younger generations have grown up with YouTube. I certainly saw that with my children as they were growing up.

I didn't get to use my TV for a good number of years because they were in front of the biggest screen in the house watching YouTube on that screen. This is kind of a model behavior. Then, you know, they take through to adolescence and likely into adulthood. My eldest son, he's now 17 and he's a big YouTube user. He uses it differently than he did as a kid, but he still uses

views YouTube as an entry point into the TV set. And as I say, a lot of the stats bear this out, that kids see YouTube as just another TV channel. Yeah. That's also changing somewhat because it was kids who kind of got us to this point, but it feels like they've handed the baton to...

to over 65 year olds and older folks have driven a lot of the recent growth over 65 year olds nearly doubled their YouTube consumption in the past two years now rivaling that of kids. So we did see it with the young folks and now it's become a habit of a lot of people.

Because we've seen it with the younger folks, Jasmine, YouTube seems to resonate particularly well with them. There was one point I was reading about saying content on social platforms just holds a greater relevance for Gen Z and millennials. There was a Deloitte study found 56% of Gen Zs and 43% of millennials find social media content more relevant than traditional TV shows and movies. Roughly half feel a stronger personal connection to social media creators than to TV personalities.

or actors. Yeah, I saw that same study. And, you know, it's shocking, but not surprising to see really how well social media content is resonating with younger users. And I think that that has really helped propel YouTube. I think there's also when you're thinking about YouTube is it's it's kind of in a league of its own, right? It's,

It has everything. It has everything from premium content or traditionally premium content to creator content to clips of movies, clips of different videos to music. And so there's kind of a little bit of something for everybody. And I think that that has been a huge growth driver. And there really isn't any other platform that can match that in terms of the scope and the scale that it has.

But to your point about the social media content resonating more with younger users, what I think has happened is that there has been a really big shift in what young people consider to be "premium content".

And so it's not necessarily that they don't like studio content anymore. It's just not reflecting them and the things that they want to watch in the same way that social media creator content is. They want to see things that are culturally relevant, that are interesting,

engaging in different ways. And for them, creators are the new celebrities. I mean, if you talk to a teenager, they'll know who Mr. Beast is, but they won't know who Scarlett Johansson is, for example. And I use her whenever I talk about this because she still doesn't have social media. So I think there's just been a big shift in that perception that has helped propel YouTube as well. Yeah.

Our colleague Jeremy Goldman was writing, tech platforms are outpacing legacy media in engagement and personalization. You're talking about things that are culturally relevant and younger people wanting to stay up to date with those things, watch those things, hear about those things. He was saying social media algorithms, especially YouTube's recommendation engine, offer hyper-tailored viewing experiences that...

subscription platforms struggle to match. So that's definitely helped. Yeah, that's such an important point because people who've grown up

digitally, expect the content that they're viewing to be tailored to them, right? And so they don't want to be flicking through multiple different channels, looking at things that, you know, really bear no relevance to what they want to be watching. When you look at a platform like YouTube, they're serving you content based on your interest and really curating that experience for you. Yeah, yeah.

It's also free. I mean, it's just, I have to keep reminding myself that you can use, you can consume all of this content and it's free. And that is no more so important, no more important, um,

than it is today because of inflationary climate, because of how people are trying to cut back on subscription platforms, having to pay for certain types of content. Jeremy was saying YouTube's growth exposes a major vulnerability in the subscription-based model. Deloitte's media report finding that nearly half of users now question whether they're getting enough value from paid streaming services, over 40% saying the content doesn't justify the cost.

and that share is increasing as well. So YouTube benefiting from that kind of backlash.

it's not all free of course you know youtube does have its subscription models as well with youtube tv and with youtube music and it's interesting to see that i mean youtube tv is seeing some success in but it's only available in the us right um youtube music on the other hand is is struggling a little bit to to eat into the leads that the spotify's of the world have um

I guess for the reasons that you mentioned that consumers are thinking, you know, I can get a lot of this stuff for free anyway. It may not be the optimal experience, but I can get it for free. Why would I pay for it? Yeah.

Yeah. You mentioned, so it's YouTube regular, which is what we're talking about here when we're talking about them being the most viewed platform on TVs. It's YouTube, the main app. But then to Bill's point, they also have YouTube TV. They've got YouTube music, YouTube premium. There's a YouTube premium light version now as well. And so there are a lot of different flavors of YouTube, YouTube kids. And Bill's

Bill, in your recent report, you explain this concept of planet YouTube, which I really like, and how the gravitational pull of the platform has disrupted other media types. Could you talk us through this planet YouTube concept in a bit more detail?

Yeah, I mean, you've summarized that quite well. So you've done a lot of the work for me. But this is the idea. Oh, yeah, early bird catches the worm. Unbelievable. Us night owls have a little bit going for us. Yeah, that's right. I do all the work and then you gain all the glory.

That's basically what happened, yeah. Sorry. So Jasmine shared with me actually a podcast on Semaphore, I think it was, Jasmine, with YouTube CEO Neil Mohan. And he was talking about a lot of the things that I'd written. It was quite fortunate, actually. A lot of the things he was talking about resonated in the report. He spoke of all these different lanes that YouTube...

is in. Um, I looked at it slightly differently and I put YouTube at the center of the media universe and called, called YouTube planet YouTube. Um,

and looked at all the media that are in its orbit and how it's been disrupting them over the years and continues to disrupt them. There are some media types that are being more disrupted and sort of in the near orbit, as I described it. So podcasting is one example where I think recently YouTube in a PR release said that at the end of January, they passed one billion monthly active podcast viewers.

Way more than any other platform. Obviously, it's disrupting podcasting in a very significant way. It's forcing almost other platforms to pivot to video. The fact that you just said podcast viewers, I think already speaks to the disruption there.

Yeah, exactly. Exactly. And then there are other media that are maybe not being disrupted quite as much yet. Live sport being an example that I put in the in the outer wider orbit. There are some.

Big disruptions happening. I mean, in the US, live sports and the NFL deal. You'll tell me, Marcus, the Sunday ticket or something. Sunday ticket. Elsewhere around the world, though, live sport,

is not being disrupted quite as much by YouTube. Although with the Olympics that we had last year in Paris, a significant amount of, of viewing did happen on YouTube. But yeah, basically YouTube is so many things now than it used to be that it, that it really does sit at the center of the media universe as we know it. That Olympic stat was stunning. 17%.

of the engagement for the Summer Olympics was on YouTube. It was shockingly high. One in five, nearly 20% of all the engagement for the Olympics was on that one platform, which is staggering. And it speaks to, I guess, how people are consuming the Olympics as well, and clips and highlights and...

And it also speaks to how there's always this big discussion over whether digital platforms are going to replace TV. And I think in some ways, of course, it already has. We talk about YouTube being the new TV for younger people. But there is also this symbiotic relationship, right? And so one of the reasons when we think about YouTube's growth is

that it has been able to reach these heights is because you have entertainment providers also posting clips, knowing that they're going to generate more engagement that way. And I don't remember the specific statistics, but there was evidence to show that you had people engaging with the Olympics on social platforms and then driving them to other streaming services to watch.

sort of, you know, full events. So there is this sort of interplay between all these platforms, even as you see YouTube in particular threatening more traditional media channels. Yeah. Yeah. Using different platforms in different ways for different purposes. Yeah.

Bill, the sheer scale of YouTube, I think Jasmine used that word a second ago, is just mind-blowing. In the report, you talk about how much bigger they are than any other digital platform, 2.5 billion users around the world. That's significantly more than even Facebook and a lot more than TikTok and multiples more than Netflix and Spotify. And it's achieved all this scale, as you mentioned in the report, whilst being banned in China, obviously,

with 1.45 billion people in that country alone.

So people on the platform and also the time they're spending watching YouTube is significantly more than other streaming platforms. Americans spending 40% more time watching YouTube on a TV, according to Nielsen's gauge, than Netflix. Put another way, people spend more time watching YouTube on a TV than they spend watching Amazon Prime Video, the Roku channel, Tubi,

Peacock, Paramount Plus and Max combined. It's just a staggering amount of time people are spending on this platform. However, you know in the report YouTube will account for just 2.5% of global digital ad revenues this year, ranking them 10th in terms of digital net ad revenues by company. Why the disconnect?

It's important to say that's net ad revenue. I know Jasmine would want me to point out because it's gross ad take is probably twice that. So it accounts for more like 5%, I think. But that's because of the amount of revenue that it shares with creators. So that sort of sets it apart from platforms like a Netflix where there's no

uh, revenue sharing with, with creators. Um, but that, that isn't to say that it still could be taking, um, infinitely more, well, not infinitely more, but you know what I mean? A significant amount more, uh, in ad revenues than it does. Um, uh, and I mean, in the report, you know, looking for some of the reasons why it might not have done, done quite as well. Um, it hasn't had to, first of all. So, uh,

Google, its parent company, has obviously got most of its revenues from its search business. YouTube has not been a vanity business.

project but you know it is maybe looked at youtube less as a revenue driver and more as a media behemoth but as its core business has been squeezed um you know the search landscape is changing significantly it's now having to rely much more on youtube and

I'm not saying it suddenly looked at it and thought, wow, look at this huge thing we've got. Let's try and do more with it. But it is being forced to do more with it because it has to.

That's the first thing I'd say. Another reason why perhaps it's struggled a little bit is its great strength over recent years is that it is a great many things. It is a podcast platform. It is a premium content platform. It's a social media platform. It's all these things. This jack-of-all-trades mentality is perhaps...

caused a little bit of confusion amongst brands and advertisers as to how best to use the platform and get the most out of it. Yeah, I think Bill is spot on with both of those reasons. I, you know, one of the things I always say is that the scale and the scope of YouTube has been both a benefit and a detriment, right? It's helped it to grow among consumers, but it has caused quite a bit of confusion and with advertisers, because every time I'm talking to brands,

What I hear is that they're bucketing YouTube very differently. Some brands consider it to be digital video, for example, while other brands consider it to be social media. And so that can make it really difficult for them to figure out exactly how they should be advertising on that platform.

Then you have other brands that are thinking that they can just port a TV ad directly into YouTube. And while technically you can do that, because the nature of the content on YouTube is different, right? There's...

that those ads won't perform in the way that they might want, right? And they need to kind of, you know, change those ads to put them more into YouTube's language and YouTube's culture. And on top of that, I think the other piece, especially if you're thinking about it as, you know, digital video or comparing it to TV, you know, there's a lot of brand safety concerns that have existed among advertisers as well. I mean, one of the reasons that we still see advertisers commit so much

budget to linear TV, even though we know that there are better places a lot of times for them to be spending those ad dollars, is because that's pre-programmed, it's predictable, and it's somewhere where they feel comfortable and safe. And because YouTube is just kind of

It's free. Anyone can upload pretty much anything as long as it's within their content guidelines. There is that sense of unpredictability that can make it really difficult for marketers to kind of wrap their heads around. Yeah. Let's end with this, Bill. I'll go to you first. What's the biggest threat to YouTube's dominance? I think we've kind of touched on it there. It's still a great many things to great many different people.

It's all very well, you know, reaching 2.5 billion people, but it still needs advertisers in order to be what it is. And if that confusion that Jasmine just spoke about continues to sort of reign, then

I mean, there are signs that it's, that's not going to be the case because it's, it's ad take is increasing at a significant clip. And now you have shorts too, which has been an entry point for a lot of advertisers. Yeah. It, I guess it's still, I still don't really know what, what YouTube is. I mean, it's lots, lots of things, but that's still an issue, I think.

Isn't it getting an update? It says it's going to be giving a refresh, a facelift in the next couple of months. So maybe that helps, uh,

crystallize what it is to folks in their minds. So we'll see what comes out of that. Maybe that will help people understand. Okay. Because I think it's supposed to get a kind of a Netflix kind of look. So if you want, I don't know, you watch people streaming things, it's over here. If you want to subscribe to different other platforms, which you can do through the platform, it's over here. If you want this type of content, it's over there on this tile. So maybe they clean some of that up

Well, that's on its CTV app. And a lot of that has to do with the fact that we're now seeing so much more viewing on CTV. And one of the biggest challenges that creators and viewers had was discovery. And so helping or allowing them to organize into seasons and episodes will make the app look more premium, more similar to say a Netflix or an Amazon Prime, and then also potentially boost viewing. To your question about the threat though,

I don't think there is a singular company that we can point to as YouTube's biggest threat. And I think that goes to Bill's kind of overarching point in this, in that YouTube is so many things to so many people. But what I do think could threaten YouTube's business-- and I've been saying this for a couple of months now-- is if they lose hold of the creator community that they've built.

And so they have been responsible or played a huge role in catapulting some of these household names. I mentioned Mr. Beast earlier, but he's a great example. But now we're also seeing them strike deals with premium streaming services like Netflix or Amazon Prime Video. And it's going to be very, very hard for these top name creators to resist those kinds of deals.

And so YouTube needs to continue ensuring that it is creating a space not only for discovery, but for monetization when you have all these other industry players now also competing for creators content to build in their libraries. Yeah. Yeah, I think that's a great point. There was a journal article talking about this. I was going to ask you about that article.

whether, how big of a deal do you think that, I mean, out of 10, how big of a deal is that? I mean, obviously Mr. Beast can create content for YouTube and create content, this new show for Amazon Prime or the highest bidder, which ended up being Amazon Prime Video, but people only have so much time. And so if his content is now on two different platforms, they have to pick and choose where they watch that content. How big of an impact could losing some of those major creators, some of those major contracts, some of those major shows be? Yeah.

It's I mean, it's a huge deal. And I think, you know, if you think back to some of the comments that Netflix's CEO, Ted Sarandos, just gave a couple of days ago talking about how Netflix is actually a better place for monetization than YouTube is for creators. You can see just how intense this competition is and how important creators are to this overall entertainment ecosystem now. Yeah, I you know.

There are only a handful of creators, if you take out the kids space, that are going to be able to strike these kinds of deals with Netflix or Amazon or any of the other streaming services. So there's always going to be creator content on these platforms.

meaning YouTube and other social networks. But it does need to keep ensuring, again, that it's a place where these creators are able to make money. And right now, YouTube is...

generally the number one social platform when you ask creators about where they monetize the best. I mean, they have the YouTube Partner Program. It shares ad revenues with those creators. Most of the other platforms don't, at least not in such a sustainable way. But there's still a lot of frustration among creators when it comes to even YouTube's Partner Program. And a lot of them don't find that their monthly income from that platform

is sustainable or predictable. And you know, that could lead them then of course, to search for other revenue streams and other ways to distribute their content. Well, that's where we have to leave the conversation for today. Unfortunately, if you would like to read Bill's full report, it is called YouTube for marketers explainer contextualizing the $40 billion advertising opportunity. ProPlus subscribers can find it for free at emarketer.com. If you are like, don't make me wait, Marcus.

Calm down. The link is in the show notes. That's all we have time for. Thank you so much to my guests. Thank you to Bill. Thanks for having me, Marcus. Thank you to Jasmine. Thank you for having me. And thank you to the whole editing crew, Victoria, John Lance, and Danny Stewart, who runs the team. Sophie does our social media. And thanks to everyone for listening into Behind the Numbers, an e-marketer video podcast. Tomorrow, you can hang out with Rob Rubin on the Banking and Payment Show, where he'll be discussing how young people bank, spend, and invest their money. ♪