“Happiness is one of the hardest things to fight for; but it’s the only thing worth fighting for.”

– Lilly Singh, YouTuber

Imagine a world where every person on the earth does what they love. They don’t have to get odd jobs to sustain their lives. Every creator finds a way to earn money for their creations, and that income is sufficient for living a good life.

Imagine a world which democratizes creation – where distribution is inexpensive and monetization is easy.

Welcome to the passion economy.

With the internet, people are finding ways to monetize their passion – writers are able to directly reach out to their readers, movie-makers are able to reach out to their fans, fashion influencers are able to sell products, and so on.

The list is long. We have many new ways of making money today that didn’t exist even a few decades ago. Though not fully there, we have started taking steps towards enabling creators to earn a livelihood from their creations.

One of the biggest revolutions enabling creators today is YouTube. It has democratized creation like no other platform and changed the advertising and publishing industry forever.

There are several articles covering the history of YouTube. From the time it started in 2005 to being the second most popular site on the internet (after Google, YouTube’s parent company), the YouTube story is a good one to read.

Over the last decade, as YouTube started spreading across India, I got to see the growth of YouTube first-hand. YouTube spawned several influencers and celebrities in this timeframe. It also changed publishing, media and entertainment in the country. The traditional advertising industry, that spent money on TV and Print ads, now focuses heavily on YouTube.

YouTube fascinates me.

In this article, I’m going to write about:

The ubiquity of YouTube
The problems it faces
The future of YouTube

The ubiquity of YouTube

There was once a time when you switched on a TV, browsed to one of the hundreds of channels to see whatever was playing on it. Those days, you had limited choice about what to watch. TV shows, therefore, were slotted based on when most people watched TV. Dinner time was a prime-time TV slot where families would sit in front of their TVs. Yet, four different people wanted to watch 4 different things. The person who had the remote controller won sometimes, and on others, elaborate tactics for snatching the remote controller were employed. Kids screamed, parents threatened their children, someone would hide the remote controller out of sight, or would remove its batteries.

All for being able to watch the content of your choice.

What about today?

Everyone has their own device. The TV is no longer the most prominent entertainment device. Cell phones, tablets, computers, and the-next-big-device are pervading our lives. Because of these, even if you miss watching a show while having dinner, you can always get back to it. At the same time, you don’t need to wait for a week to watch the next episode of a TV show. The next episode begins in 5 seconds, automatically.

A key part of this movement to internet-first video consumption has been YouTube. While other internet-first media companies have played their part, the reach provided by YouTube is unparalleled. Not a single video consumption digital product has diversified itself into as many content verticals as YouTube.

YouTube has created new professions, shifted advertising budgets in its favour and shifted the costs of distribution infrastructure to near zero. It has convinced the biggest publishing houses to jump ships, and the smallest creators to earn their livelihood.

Let’s see how.

The variety of YouTube content

So many categories

When you switch on YouTube, you get to see ribbons of videos. These are sorted according to your search and viewing history, and the viewing patterns of people like you. With the kind of a content beast YouTube is, it has enough suggestions available for you.

One of the big reasons why YouTube trumps other video services is the breadth of content. You can see sports videos, nostalgic videos from the 90s, music videos, food recipes, video logs (vlogs), comedy sketches, etc. Most video categories are watched irregularly, which means users want to switch between video categories.

While a company focused on one form of entertainment struggles to let users switch between categories, YouTube can handle this very easily. YouTube’s algorithm is smart enough to recognize this, and shows you content from a variety of categories rather than forcing you to a few categories.

The top content categories watched by users are comedy, music, entertainment and “how to” videos. The things that we previously watched on TV are now on YouTube. If you take a look at the most subscribed channels on YouTube, you will also see channels for nursery rhymes, sports channels and review channels as well.

Optimized for different settings

What you watch on a TV while having dinner is different from what you watch when you’re riding a bus to work. When you’re riding a bus, you might want to catch up on news quickly, vs when you are having dinner, you might want to watch a long documentary.

YouTube handles these scenarios very well. Since everything is connected to a single account, you can continue watching content from where you left off. Although this inter-connectivity seems small as a consumer, the advertising world dies for such rich data on consumers. You can now tell what is the most common mode of watching videos. This informs your advertising, your content strategy and your reach.

Variety of users

With 2bn monthly users, YouTube has to serve a diverse audience. From toddlers who are watching nursery rhymes while eating dinner, to the elderly who are trying to get acquainted with new technology, watching a video comes naturally.

The main reason why YouTube scales so well is because its users create most of the content. This helps YouTube not just in having diversity of content, but also bringing in more users. The content creator brings in more consumers, who in turn entice more creators to create content. The cycle goes on.

Sal Khan started a YouTube channel to teach his cousin Math. Because this was free content, more people who needed help with Math started to watch his videos. Seeing the growth of his channel, starting 2009, he’s devoted himself to building Khan Academy, which provides free educational content from Science and Math to Arts and Humanities.

Such ease of distribution has led to a disruption in many traditional industries. Not only entertainment, but education, sports streaming, gaming, journalism, etc. have all seen people flock to YouTube. Today, YouTube sits at the core of a company’s digital strategy.

One example I love to highlight is that of travel videos. Today, it is easy to sit behind a screen and watch someone travel in another part of the world, while you relax. You get to see the place, experience it first-hand from another tourist and decide if you want to visit the place or not. What previously used to happen through hours of research on travel websites and guides now happens as you watch a few short YouTube videos. In that sense, YouTube is not only competing with traditional media houses, but also with other forms of content – travel blogs, for example.

Traditional media companies are also switching to YouTube, heavily investing in building a following on the platform. T-Series, India’s biggest music label, is the #1 channel on YouTube in terms of subscribers. In addition to the main channel, they have 28 channels catering to specific regions or genres of content. T-Series has heavily invested in YouTube since the 2010s.

Because the content is largely ad-supported, a payment gateway is not a blocker. This allows consumption from not only the people who can afford subscriptions, but also the people who don’t want to pay.

The diversity of users is also exemplified in the demographics. From pre-school kids to the elderly, all age groups have something to watch. From tech reviews to travel videos, you have enough content to satiate your content needs.

A new medium for content

From Blogger to YouTuber

In the 2000s, blogging became very popular. People had found a way to express themselves on the internet and find an audience for writing what they liked. This was also fueled by a clear monetization model, even if it was ad-based. The best bloggers, like Seth Godin, published every day and built an audience through their blogs.

The internet started rewarding those who were dedicated and prolific. Content that stood the test of time became the most consumed content.

Blogging burgeoned an entire industry of freelancers, copywriters, content marketing experts and SEO teachers. Theories on manipulating the Google Algorithm started spreading, but ultimately people found out that Google rewarded authenticity and value more over cheap tactics to get your websites to rank higher.

Today, starting a blog is the first step towards making your home on the internet.

Yet, blogging is restrictive. Good writing is not for everyone. Not everyone wants to read long posts. Although there are people who love to read online, it is a limited communication mechanism.

Watching videos is far easier than reading a blog post. You can also make the video more engaging, with sound, illustrations, etc. People today watch movies far more than they read books.

This is where YouTube comes in. From blogs, online creators are now looking at vlogs, a concept similar to blogs, but in a video format. Several creators today share their lives on YouTube and make a living off it. They have online identities that their audiences love.

Many people, especially from developing countries like India, start their searches on YouTube, vs. starting on Google. Non-English language creators in India are skipping creating websites and blogs, and going directly to YouTube. Creating video content in a non-English language is easier for most of the people, since many people find speaking in a regional language far easier than reading and writing in it. You can see this trend in the number of Hindi review channels.

With the growing accessibility of the internet, non-English language consumption is moving to video.

“YouTuber” is replacing what a “blogger” used to be once.

Distribution costs nothing

The cost of distributing video content is almost $0 today. YouTube doesn’t charge anything for you to upload videos. As long as the content meets its policies, your video is available for sharing with viewers.

This is a big advantage not only for indie creators, but traditional media as well. You don’t have to get a dedicated TV slot or worry about slotting your content to leave sections for advertisements. You also save on costs of signing deals with TV channels. This saved cost can be used for making more content. By uploading your content on YouTube, you give the choice to the consumer of watching your content at their convenience. The power has shifted to the viewer, who decides what to watch and when.

We can see some news channels starting directly on YouTube, skipping TV entirely. By optimizing for YouTube, you make your content available to its 2bn users. Such mammoth distribution sounds impossible through TV.

Impact on the internet

YouTube is the second most popular website on the internet after Google, according to Alexa. Today, it is much more than a video sharing platform. It is also known for its search engine, its rich content recommendations and its ease of use.

It also streams live events from around the world. Many broadcasters nowadays prefer to stream on YouTube live vs. creating their own streaming technology. In 2012, YouTube live-streamed the Olympics for the first time.

Streaming has also enabled the gaming industry. YouTube Gaming, which allows people to stream their videos while playing computer games, is a huge hit. It is the platform of choice for mobile-game streamers. Twitch leads the market overall in terms of the number of streamers, but YouTube has a significant market share, too. The video gaming industry today brings in more revenue than movies and music, and online streaming is enabling gamers to earn.

We also see some eclectic channels live-streaming. For example, channels that are live-streaming from railroad intersections, or channels that are showing us a stream from the wild. These are interesting use-cases of streaming that we would never have thought of.

The technological innovation in making this possible is huge. Videos consume a lot of bandwidth, both in terms of storage and streaming. By allowing people to create and consume videos for free, YouTube has changed the dynamics of the internet forever.

Competitors

YouTube has also managed to gain a fair share of competitors. The market is very big for one single player to rule.

Vimeo is a notable example. Vimeo was started in 2004, before YouTube was started, primarily as a side project. But when Vimeo launched, they had a lot of strict rules around the size and length of videos allowed. This differentiated YouTube, which had capital that allowed them to not place restrictions on sizes of videos.

But Vimeo is not small. It has 170 million monthly users. It has also differentiated itself by allowing users to customize their players and the content. It doesn’t play any ads at the start of a video, which provides for an uninterrupted viewing experience. However, Vimeo charges users for storing videos on its platform, which is a big letdown for creators who cannot afford it.

In the recent years, Facebook has also invested heavily in making its own video product, integrating it with the social network. It has shown growth, as more than 500 million viewers watch videos daily. With the advantage of integrating videos with a person’s social graph, Facebook has carved its own space. Facebook integrates videos as a part of your Facebook feed itself, which results in grabbing your attention quickly.

However, Facebook has also seen a fair share of criticism because of its frequent pivots in strategy. Also, sharing videos outside of Facebook is not very common, because of which it is restrictive as compared to YouTube. It is a common practice to embed YouTube videos across the internet, which increases the video’s reach. Facebook allows embedding of videos, but this is far less common, maybe because of the misconception that you need a Facebook account to view videos.

Facebook is considered better for shorter-form content, of around 20-40 seconds, while for longer content, YouTube is better. People go to YouTube with a definite intent for watching videos, which ensures that people are open to sticking for longer times on the app. Intuitively, on the Facebook feed, a user’s mental model is to keep scrolling through the feed, which could be an explanation for why shorter videos work better.

Companies like Unboxed have tried to take one category of videos from YouTube and build additional services for this category. Unboxed tried to create a platform for unboxing videos, which is a popular category on YouTube. They observed that there are additional ways to serve creators of unboxing videos rather than letting them only earn through ads. However, this didn’t work largely because of the content variety provided by YouTube to its consumers. Without enough consumers, creators don’t have an incentive to join a different platform.

However, this same strategy of taking one category and building additional services has worked in gaming and education. Game streaming has been revolutionized by Twitch. In education, users are willing to pay hundreds or thousands of dollars, so unbundling it from YouTube is a no-brainer. Companies like Udemy have taken advantage of this.

YouTubers all around

Having discussed the consumers and the platform, it is time to talk about creators. Creators on YouTube are responsible not just for making content, but also for bringing the 2bn monthly users.

As of December 2018, 500 hours of content was uploaded to YouTube every minute. I get chills when trying to estimate the amount of storage such huge amount of video content requires. YouTubers don’t have to worry, though, as YouTube abstracts the technical challenges from them.

To earn money on YouTube, a creator has to have more than 4000 hours of overall watch time on their channel within the past 12 months and have at least 1000 subscribers. YouTube says this is primarily to prevent bad actors and enable good creators.

As a creator, this might feel restrictive at first, but it is like any other career. To build a career in software engineering, you would have to spend hours learning a programming language and keep practicing for a while. The same dynamic applies to a YouTube channel too. The initial phase of a YouTuber’s career can be dedicated to trying multiple types of content, finding what sticks with your subscribers and thus helping you figure out your niche. Once you create enough content, you unlock monetization.

So far, this seems to be working. In India, the number of YouTube channels with more than a million subscribers was 16 in 2015. By 2019, this number grew to over 1200. As the platform grew, so did its creators. In Feb 2020, YouTube’s revenue was $15 billion, a significant portion of which went to creators as a part of the advertising revenue shared with them.

Features for creators

YouTube provides several features for creators to ensure they are able to succeed with the platform. Here are some of the notable ones.

Viewer data

If you’re a YouTuber, you need to understand how your videos are performing. You need to look at how many people are looking at your videos, how many people have dropped off from your videos at the nth minute, see what kind of videos are doing better than others, etc.

If you’re a seasoned YouTuber, this data provides you an excellent way to analyze where you need to improve.

For example, if you see that at an average, your videos are not being watched for more than 30 seconds, you can say that people like the title and the thumbnail of the video, but don’t like the video content itself. On the other hand, if you see that your videos have high retention, meaning people watch 80 to 90 percent of the videos, but not many people watch the videos, then you need to improve your title and thumbnail to grab more eyeballs.

These are just a couple of examples. There are numerous ways in which you can interpret the data provided by YouTube.

Creator Academy

Not just help you analyze your own videos; YouTube also has tutorials around how you could make money as a YouTuber. From channel creation to content strategy to monetization, YouTube is here to help you through its creator academy.

All of these courses are free to access, and if you start watching them as you create your channel, chances are high that you would have a great quality of content. You will be aware of YouTube’s policies and guidelines, which will at least help you identify what not to do. This is important, given the stricter guidelines the company is implementing with a changing socio-political landscape.

If you’re a YouTuber, you are running a business, which means you need training on marketing, monetization, content strategy and growth. Through the Creator Academy, YouTube provides you with tips on how to do this.

Creator Studio

The YouTube Creator Studio allows you to do the basic editing, like trimming a video and adding thumbnails and end screens. What’s more, YouTube also helps with translated subtitles, which means your videos are inclusive.

The Creator Studio also allows you to interact with your subscribers through comments and posts, thus helping create a community around your content.

Find marketing partners

In 2016, Google acquired Famebit, an Influencer marketing platform. This allows advertisers to find the right creators for their marketing needs. As a result, you as a creator don’t have to worry about not finding partners.

Otherwise, you would have to worry about getting in touch with ad agencies who work with partners, and will usually take a cut out of the deals that partners want to have with you.

Coming from YouTube itself, this looks promising.

Monetization

Of course, the most important way in which YouTube helps you is making money. YouTube helps you make money primarily through advertising.

Though advertising is the primary mode in which a creator can earn money, it is not the only one. YouTube also allows creators to make money through memberships to a channel, donations and ‘super chat,’ which allows viewers to pin their comment to a live streaming video. Creators can also offer memberships to their subscribers by adding premium content to their existing offerings.

For creators who want to sell their own merchandise, YouTube also works with multiple merchandising partners.

YouTube Problems

Over the past few years, with the rapid changes the internet has seen, YouTube has been under an immense pressure to evolve. The spread of fake news, hate speech and violence has become very easy. With stiff competition coming in from several players (both audio and video), YouTube is losing its biggest assets – creators. Creators are moving to other platforms, and those that stay are complaining about the burnout caused by creating content constantly.

The YouTuber is finding it hard to earn a livelihood off of YouTube.

Copyrights

Copying music and videos on the internet is extremely easy. YouTube adds to this menace, as anyone could upload any content they want, and potentially monetize it, stating it is their own content. It is hard to protect the income of millions of creators on YouTube. If not done well, this could lead to rampant piracy, which would lead to a drop in creators’ income, thus decreasing YouTube’s content, which would eventually decrease YouTube’s revenue.

At the same time, big brands and publishers can sue small creators for innocently using parts of their IP. A company like T-series can sue a small-time creator for uploading a video that has their song playing in the background.

This is complicated by different regulations in the EU and the US, where YouTube is based. In 2018, the EU approved Article 13, which protects the creators’ interests. As a part of this law, you cannot use original content for creating spin-off videos, parodies or criticism. Things get dicey here since YouTube argues that its algorithms are not yet smart enough to detect what is fair use and what is copyright infringement. Some publishers have historically been ultra-sensitive when it comes to letting other creators use their IP, while others are more open.

This problem is not going away any time soon. How YouTube deals with copyrights will be interesting to monitor over the next couple of years.

Creator burnout

Creators on YouTube are burning out. There have been debates around whether the YouTube algorithm highlights recent videos, which means the more videos you produce, the more likely they will be recommended to users, thus increasing the chances of being viewed. For independent creators, falling sick for a few days could mean that their income tanks. There is no paid leave, no medical care, no paid-time-off. If you are a creator on YouTube, you are on your own.

With the increasing number of creators on YouTube, if you as a creator stop making videos, you will lose your relevance and will soon be taken over by someone else.

YouTube says that it “spends a lot of time thinking about this topic.” It argues that if a creator has found an audience once, it is easy for them to find an audience again, but the reality could be different.

YouTube says that the engagement of a video is more important than the video’s age. But whether someone can make an income to sustain their lives by uploading fewer videos to the platform is an unknown.

YouTube should be a thought leader in this space. It arguably has the highest number of creators as a platform. But so far, we haven’t seen any concrete data validating that the company is doing something to cure the problem.

Creators are leaving

This has become a template for creators – start a YouTube channel, gain a significant number of followers (let’s say 1 million), then go sign deals with other platforms for producing content for them. With the plethora of content platforms, content is slowly moving off of YouTube. We’ve seen this trend with other apps stealing YouTube’s place in music or categories like web series where it is easy to upload videos on other sites.

Short-form content is moving to Instagram, Facebook, and Tiktok. With the launch of its video platform, Facebook made some waves a couple of years ago. For creators who depend on social media for their bread and butter, moving to other platforms provides added social benefits, which YouTube doesn’t have. It is easier to view a video while you’re on Instagram itself, as against clicking a link that takes you to the YouTube app to play a video.

But it looks like YouTube is trying to solve some of these issues. For example, they’ve launched subscriptions for creators and added features like stories, similar to Instagram and Snapchat.

Curbing the spread of fake news

The fake news problem is not specific to YouTube. It affects online social media. With YouTube, since anyone can upload anything, spreading fake news is very easy. In 2019, the company created a new policy that banned videos surrounding hate speech, but implementation is still a work in progress.

The company employs thousands of moderators who go through videos and take down anything that violates its policies. With YouTube’s scale, which touches billions of users every month, human moderation of every video is not practically possible.

For machines, a lot of content can hover over the borderline, which compounds the problem. Relying entirely on users to report bad videos is not a solution as well. In a lot of cases, you need to stop the spread of a video before it reaches even a few users. With its focus on driving more engagement for its videos, the YouTube algorithm might, in fact, enable the rapid spread of fake news. The spread could go undetected unless it reaches a huge scale.

YouTube’s future

A good company solves problems for its customers. YouTube’s focus, so far, has been on creating a healthy platform which enables creators to create, and consumers to consume.

YouTube has a lot of hard problems to solve. The environment it operates in is constantly evolving. A company of YouTube’s size needs multiple approaches to solving the same problem for a diverse audience. At the same time, with stiffening competition, we can expect YouTube to copy some features from its top competitors. It already produces its own content to fill gaps in its own content ecosystem and keep users engaged.

Ultimately, there are only 24 hours in a day. If YouTube maximizes how much time a person spends watching videos on its own apps, it minimizes the time spent by that person on other apps. This looks to be YouTube’s strategy, considering its recent advances in music streaming, premium content production, gaming and live TV.

Here’s a look at some problems YouTube will solve in the near future.

Video commerce

For creators who use videos to sell products, taking users away from YouTube to a different site is not a good user experience. I would not be surprised to see YouTube introducing a checkout process – for creators who want to sell things, you can have a payment and checkout process integrated into the YouTube experience.

Imagine a world where a YouTuber talks about a product and they have a link in the video itself that people could click on. YouTube asks people for their card information, and the checkout process happens there itself. To make it more interesting, YouTube could allow re-targeting, allowing creators to advertise the products in their videos to people who clicked on them, but did not complete the purchase.

With Google already having many products around commerce, for example, Google Pay, we can expect integrations with YouTube.

Community engagement

Creators need assistance connecting with their community in more ways than just their videos. It is, ultimately, about creating a community around content. Today, creators have to engage with their audience on Instagram, YouTube, Facebook, and other apps.

It can be expected that YouTube wants to pull some of the attention away from these other apps onto itself. This could mean building more ways in which creators can reach out to their target audiences, having creator pages which allow creators to tell their audience their background, etc.

We’ve already seen this starting to happen. YouTube introduced stories last year, following the trend on other social media apps like Instagram and Facebook.

Improving the core experience

I am convinced that if there is one company that has the potential to empower its creators in more ways, that is YouTube.

Areas, like updating its algorithm to meet the changing times, improving recommendations, changing policies to protect the creators, improving the creator studio, etc. will continue to see a significant investment from the company.

Conclusion

The goal of writing this essay was to find out the breadth of YouTube, and explore what its future looks like.

The future seems to be doing more of what YouTube does best – empowering its creators. Creators are the heart of the company. In the recent times, we have seen several new features that allow creators to earn more revenue, be protected from causticity and in some cases, also collaborate with YouTube to produce original content. We can expect YouTube to do more of this.

We are also seeing the company diversifying itself – creating its own original content, TV streaming and music streaming. But despite its starts, it is not a leader in the world of original content production. I think the main intention here is to keep viewers on its own app, vs letting them go to another streaming app.

The next few years are going to be exciting – considering the stiffening competition from Facebook, Tiktok, Instagram and the plethora of streaming platforms. The socio-economic landscape is also poised to change because of COVID-19, with more people staying indoors for the foreseeable future. Advertising budgets would be cut, meaning YouTube would see a decline in its own revenue, and also send less money to the creators. Paradoxically, because people have more time on their hands, YouTube’s usage could grow. For more views, creators can expect less earnings.

But in the long run, the goal remains the same –

If YouTube can keep adding value to its creators, it can keep its consumers, thus ensuring it survives the competition.

If you have any thoughts or feedback on this article, please send an e-mail at hemantrjoshi[at]outlook[dot]com or send me a message on Twitter.

If you would like to read more about trends affecting our society, subscribe to my newsletter. I send one e-mail every Friday. You can view some of my previous posts here.

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