On February 14, YouTube will celebrate its 20th anniversary. In retrospect, Valentine's Day was a fitting launch date, because the streaming-video behemoth has received a lot of love over the years.
An estimated 2.5 billion users — nearly half of all internet users worldwide — currently access YouTube every month. That's second only to Facebook, which attracts just over 3 billion.
The attraction is content. Lots of it. An estimated 500 hours of video are uploaded to YouTube every minute — that's 720,000 hours each day. The platform's billions of users watch billions of hours every day, generating many billions of views. And, of course, all that engagement generates billions in revenue. The primary source is advertising, with additional contributions from subscription offerings, including YouTube Music, ad-free YouTube Premium and YouTube TV, the streaming service that provides access to more than 100 broadcast and cable networks.
In the first quarter of 2024, YouTube reported $8.09 billion in revenue, a 21% year-over-year increase from the same period in 2023. In the second quarter, the amount rose to $8.66 billion, and to $8.92 billion in the third quarter. The company is on track to reap about $34–36 billion this year. To put this in perspective, when Google bought YouTube, which was founded by three former PayPal employees, in 2006 for $1.65 billion, some analysts called it a risky move. Now, YouTube earns about five times that amount each quarter.
While its economic might and endless infusion of content are well established, an intriguing trend in recent years has begun to reframe the way both users and the media industry think about YouTube: a significant uptick in viewing on televisions.
“It’s been incredible,” says head of product Kurt Wilms, who tracks user activity at a granular level. “It’s our fastest-growing screen.”
In fact, in the past three years, YouTube viewing on televisions has increased by 130%. That’s 150 million people in the United States who watch YouTube on televisions every month, and globally, users now consume more than a billion hours of its content on TV screens every day. The shift in viewer behavior is generally attributed to two developments — one driven by technology, one by a public health crisis.
For the past decade, viewing not only of YouTube but of streaming platforms in general has risen steadily, fueled by the development of connected televisions (CTVs). These internet-connected devices allow users to stream video directly on their screens, bypassing cable and satellite, and they often arrive from the manufacturer pre-loaded with a menu of streaming apps — including YouTube.
Like other streamers, YouTube, the platform that boosted "Lazy Sunday," "Gangnam Style," "Baby Shark Dance" and countless other viral videos, can also trace the shift in viewing habits to an actual virus — Covid-19. "The pandemic had an incredible effect and change on user behavior," says Kim Larson, global head of creators. "That's where we really started to see that growth in the living room." How much growth? In 2020, Nielsen reported a 74% increase in time spent on connected TVs compared to pre-pandemic levels.
In August of this year, "The Gauge," Nielsen's monthly analysis of viewing across the range of television platforms, revealed that, for the month of July, streaming accounted for 41.4% of television viewing — the highest total ever by a single viewing category. YouTube achieved a milestone of its own by becoming the first streaming platform to account for more than 10% of all television viewing, with a reported total of 10.4%. Netflix was second with 8.4%.
"When we ask viewers why they watch YouTube on television versus on a phone or on a computer screen, we hear a few things," Wilms says. "The first is, 'I have my favorite content, and I want to watch it with my best friend or with my family. And the best way to enjoy YouTube with others is on the big screen.' The second is, 'I want to watch it on the biggest and best screen in my house. That's the TV screen.' The third is, 'I want to watch YouTube, and I want to multitask while I do it. Putting it up on the big screen is the best way to do that.'"
As with YouTube viewing in general, increased viewing on televisions has led to an increase in revenue. Google does not break out YouTube's earnings by device, but CTV advertising trends suggest big numbers. "Five years ago, according to eMarketer, CTV advertising in the U.S. was approximately $6.5 billion," says Will Richmond, president and founder of the consulting firm Broadband Directions and editor and publisher of the daily online publication VideoNuze. "2024 is estimated to be about $29 billion. That gives you a sense of just how explosive ad-supported viewing on TVs has been."
What are those billions of people watching on YouTube? The answer to that question has long been a major differentiator between YouTube and its streaming counterparts.
Regardless of format or genre, the programming on Netflix, Prime Video, Disney+ et al. is always professionally produced and consistent with the standards of a legacy broadcast or cable network. Although YouTube includes music, live streams, podcasts and indeed some professionally produced content from major media brands, it has typically been associated with what was once widely known as user-generated content, or UGC, a catch-all acronym connoting low budgets, amateur production values and vastly disparate quality.
Today, the term UGC has largely been replaced by descriptors such as "creators" and "partners." This shift emerged in the early 2010s, spurred by a confluence of factors — perhaps most notably, a steady improvement in the quality of independently produced online videos and the skill level of those creating them.
A significant milestone in YouTube's growth came in 2007, with the introduction of its Partner Program, which established parameters for content creators to share in the dollars their content generates. For most videos, creators receive 55% of revenue and YouTube keeps 45%. For videos known as Shorts — the Tik-Tok-esque format introduced in 2020 with a one-minute maximum length (now three minutes, as of October) — 55% goes to YouTube, 45% to creators. The ability to make money by making videos planted the seeds of today’s creator economy — which includes earnings from brand deals and other sources beyond ad revenue — and which, per a 2023 Goldman Sachs report, could approach half a trillion dollars by 2027.
In 2015, seeking to compete in the premium programming space, YouTube launched a division called YouTube Originals and hired longtime TV executive Susanne Daniels, who had previously served as president of MTV, Lifetime and The WB, to run it. Despite some successes, YouTube shuttered the scripted, subscription-based slate in 2018, and a few of its more notable titles moved to other platforms, including Cobra Kai to Netflix, On Becoming a God in Central Florida to Showtime and Step Up to Starz.
Originals continued to pursue unscripted docuseries, specials and concerts, many fronted by big-name celebrities such as Kevin Hart, Will Smith, Justin Bieber and Taylor Swift. But in early 2022, Daniels exited, and YouTube wound down nearly all its Originals initiatives and turned its attention to a burgeoning roster of independent creators with large fanbases and viewer numbers — and revenue.
As Robert Kyncl, YouTube’s chief business officer at the time, noted in a message announcing Daniels’s departure: “Today, there are over 2M creators in the YouTube Partner Program, and our creator community has never been more successful: We've paid more than $30B to creators, artists and media companies over the last three years."
In a letter on the YouTube blog in March of this year, CEO Neal Mohan reported that the Partner Program now has more than 3 million channels, and YouTube has paid $70 billion to creators, artists and media companies over the last three years.
From a business perspective, the addition of a million participants and a payout that's more than doubled in just two years since the closing of Originals validates the decision to go all-in on the creator community. From Richmond's perspective: "I think they came to realize that the power of their top creators is such that it's better for YouTube's business to just keep embracing those creators, driving their popularity and helping them drive ever-better monetization than it would be for YouTube to invest in its own originals."
In December of 2022, less than a year after scaling down Originals, YouTube made a significant investment in a different area that's growing in the streaming space — sports — when it made a seven-year deal with the NFL to acquire the Sunday Ticket package of out-of-market games for a reported $2 billion annually. The move was further acknowledgement of increased viewing on TV screens.
"I think that was a way of signaling to the market that, yes, they are trying to compete for the living rooms," says Hernan Lopez, founder of the management consulting practice Owl & Co. "And, yes, they are not shy about spending money on things that they feel can move the needle."
In July of this year — with the first season of NFL games in the books and the Paris Olympics in progress — Mohan told the Financial Times that 35 billion hours of sports were watched on YouTube over the past year — a 45% increase year over year, much of it on CTVs, where sports viewing increased by 30% year over year. "It's not surprising," he said, "because if you put yourself in the shoes of a consumer or a sports fan ... that's a great screen to actually consume that sort of content."
For all its success, YouTube is not without challenges. An early one was how to police the illicit posting of copyrighted content from established media companies, which in some instances resulted in legal action — including a $1 billion suit brought by Viacom in 2007 and settled in 2014. In response, YouTube developed Content ID, a digital fingerprinting system introduced in 2007, which flags copyrighted content. When this occurs, rights holders have the option of monetizing the content or having it removed. YouTube has continued to introduce new features over the years — including several in September — to keep up with infractions, many related to music, such as the use of copyrighted songs in user-generated videos, but the task is ongoing.
Today, the relationship between legacy media companies and YouTube is more synergetic than antagonistic. In addition to providing revenue for the companies, YouTube delivers significant exposure and promotion for their content — from late-night clips to full-length documentaries. Says Richmond: "Major media companies have long since recognized that YouTube is a prime promotional vehicle and a way to attract or retain viewers to whatever other platform they primarily monetize on, whether that's in pay TV, paid streaming services, ad-supported streaming services or what have you."
Another major ongoing concern for YouTube is content moderation, the practice of reviewing and monitoring content to ensure compliance with a platform's standards and guidelines. Artificial intelligence helps identify objectionable material, but vulnerabilities remain, especially given the incessant influx of uploads. The subjective nature of content assessment — and varying cultural standards around the world — can result in criticisms of too much moderation and also not enough. Complaints of censorship by some groups, and the dissemination of alleged misinformation by others, have also persisted.
In 2017, the so-called "Adpocalypse" came as a jarring reminder of how insufficient content moderation can affect business; many advertisers pulled ads because of placement alongside extremist content. YouTube and creators alike saw significant revenue losses as a result.
A less foreseen outcome of YouTube's inexorable expansion could be the effect it's had on the type of content being created. Demographically, YouTube's largest audience skews young: Just under 40% are in the 18–34 demo. Extend that to age 44, and the share grows to 54%. As Lopez puts it, "What happens in a world where YouTube, already the 'first stop' for younger viewers, becomes the 'first stop' for most viewers globally? You could then draw a pretty direct line to a world where ambitious TV projects become even harder to greenlight and finance."
That brings us back to content creators and YouTube's efforts not only to support them but to cultivate them. Creators' ambitions and technological sophistication have been enhanced in some cases by close relationships with YouTube, which supports both rising and established creators by assigning so-called strategic partner managers to advise and assist in various ways.
"We have different tiers of creators, and we offer the big ones more bespoke support," Larson says of the complimentary resource. "But just as important are the new and up-and-coming creators. Depending upon where the creator is in their journey, we try to offer them the right customized set of services. For a creator who's more of a novice or new to the platform, we do a lot of coaching on content, how to use the formats and best practices in storytelling. But as a creator gets more sophisticated, they have their studios. They're modern media moguls. They have actors, they have writers, they have editors, they have producers. In those cases, we're coaching them more about how to build their business."
Creator Kinigra Deon's YouTube channel has more than 4 million subscribers, and her slate of long-form, scripted, family-friendly content has expanded so much that she is looking for real estate to build a production studio in her native Alabama. "My [strategic partner manager] is amazing," she says. "He talks to me about my channel, and any time an opportunity comes up for me to showcase what I do and who I am, he helps. And every [YouTube] executive I've ever met with is all about the creator and helping us. They've even influenced how our content looks on TV. Most of my viewers watch on TV, so it needs to look different than it does on a phone. I don't think there's a platform that has a better relationship with their creators."
In a further signal of support for the creator community, YouTube announced in September that it plans to revamp its CTV app to add such user-friendly functionality as the ability to organize content by episodes and seasons, as well as video previews when navigating a creator's page, for an experience similar to what audiences are accustomed to on other streaming platforms.
"I equated that to what I call the TiVo moment," Lopez says. "Remember in the '90s, when all the most popular shows were procedurals and sitcoms that were episodic? Then TiVo was invented around the turn of the century. And by coincidence or not, you got The Sopranos and The Wire and Six Feet Under. The golden age of serialized television, coincidentally or not, happened after consumers, for the first time, had an easy way to watch television from beginning to end, in sequence. Until now, there's been no incentive for a creator to come up with a serialized story. They wouldn't know how to publish it on YouTube to make sure that people would find it and watch it. But my reading is that YouTube is signaling that that's one of the things they want to encourage creators to do."
They also want to encourage creators to pursue Emmy Awards. Although Creators for Change, an Originals division documentary featuring Michelle Obama, received a Daytime Emmy in 2021, YouTube now has its sights on a Primetime Emmy.
In May, shortly before the start of nominations-round voting for the 76th Emmy Awards, Mohan wrote a guest column in The Hollywood Reporter, arguing that "creators are the new Hollywood" and name-checking such YouTube titans as MrBeast, whose 300-million-plus subscribers can't get enough of his competition challenges and big-money giveaways; Michelle Khare, who endures rigorous physical and mental tests on her show, Challenge Accepted; Sean Evans, host of the talk show Hot Ones, on which he interviews celebrity guests while they eat increasingly spicy wings; and Rhett & Link, hosts of the variety show Good Mythical Morning, which, according to Larson, has twice the viewers in the 18–34 demo as all the late-night talk shows combined. In August, after the 76th Emmy nominations were announced — with none for YouTubers — The Wall Street Journal ran a similar story citing most of the same creators. Given that an Emmy nom would go to the creator, not to YouTube, why is the platform, as Larson put it at the VidCon conference this summer, "going gangbusters to get someone nominated for a Primetime Emmy"? Because the validation would have a halo effect on the entire platform.
"When you can point to a creator who's getting recognized that way, it's going to get the whole ecosystem feeling legitimized and like we've made it," Larson says. "It would not be a small thing. It would be an amazingly positive message for the whole creator ecosystem."
Wilms echoes this theme but expands it to YouTube's identity in the industry as a whole. "When we launched 19 years ago, people were saying, 'This is the future of TV,'" he says. "How it played out with technology is that a lot of the viewing and a lot of the interest went to mobile. But it's kind of come full circle now, and I think we're in the midst of another shift back to TV."
At the vanguard of that shift are creators like Alan Chikin Chow, whose Shorts have logged billions of views and who now produces and stars in the long-form series Alan's Universe, a candy-colored, high school–set mash-up of teen flicks, rom-coms, horror thrillers, pop musicals and every other youth genre of note. "Our series is getting 10 to 30 million views per episode, which, if you think about it from Nielsen TV standards, is insane," says Chow, who recently set up a studio in Burbank to expand his output for the more than 60 million subscribers to his YouTube channel. "And they're 20-minute episodes, just like normal TV. It's shot with a 25-person crew. So, it really does feel like: What's the difference between what we're making and television?"
This article originally appeared in emmy Magazine, issue #13, 2024, under the title "Good Reception."
