In 2013, I scraped some of the top channels of YouTube in order to understand what the then mysterious and up-and-coming YouTube-native ecosystem differed from traditional creative industries.
You can play with the interactive graphic here.
- YouTube is a “winner take all” market.
This isn’t a surprise. The top-performing YouTube channels and videos are millions of times more productive than the median YouTube channels and videos.
- The “winner take all” aspects partly live at the video level.
I was surprised at the variance within channels of video performance. My prior belief had been that I’d see fairly consistent levels of views across videos in a channel as fans found channels they liked and devoured content. Instead, I found with someone like Jenna Marbles that they could get videos with 4.57M views, 31.3M views, and 457k views for videos released within a few days of each other.
- To be a native YouTuber is to live on a treadmill.
YouTube-native channels, like Jenna Marbles or Smosh, post with incredible volume and consistency. I can’t imagine the amount of effort, time, and creativity it requires to make this much video with this much consistency.
- YouTube is a music platform.
More than a third of the top 100 channels are music channels, anchored by the VEVO network of channels.
- YouTube favors incumbent media.
Ellen, Fallon, and other variety programs like Britain’s Got Talent also figure promenently in the top 100 channels. Many of these are music and variety-format shows that are snackable video gold.
- We can get a loose sense of how long video takes to proliferate by looking at this data.
Click on Smosh or Jenna Marbles. You see a “rise and fall” of video views, in which views start off low, seem to rise, and then fall on average. With the benefit of hindsight, we know that the channels did not become unpopular. Rather, this is likely an effect of the time lag between the most recent videos and older ones. The oldest ones aren’t as popular because they were earlier in the growth of the channel. The latest ones haven’t had as much time to accrue views. This could give us a sense of how long of a shelf life a video has. If I had more time to gather data, I would gather snapshots for a subset of video channels for several months.
- What has changed, and what hasn’t?
In 2013, YouTube was a wild frontier. Venture dollars poured into MCNs, and there was conversation that the long-tail content might become to cable TV what cable TV was once to broadcast TV. It wasn’t clear if YouTube-original content would ever be tractable for older people. The reality has turned out to be more complicated. Netflix and its kin have turned out to be the more immediate threat to the cable bundle. YouTube has turned out to be a secular shift that spans generations, rather than a generation-specific innovation like Snapchat, but it’s unclear to me if YouTube-native content appeals to adults older than millenials.
- Is investing in YouTube content a good idea?
If you are an individual or small team and find success, then yes, it’s may be a good idea—this is a blockbuster after all. It is a grind!
But the multi-channel networks (MCNs) have not been successful investments for most of their investors and employees. Maker Studios was bought by Disney for $500 million, rising to $950 million if financial milestones were met. Relativity Media bid $1.1B and was rebuffed. This acquisition is generally considered to have been unsuccessful for Disney.
- Is there a “middle” of YouTube content?
It’s hard to make a $20M movie. It’s plausible to make money on a $200M movie (like any Avengers franchise movie), or a $2M movie (like Get Out), or even a $200k movie.
How has this evolved on YouTube? High-end productions, like music videos or SNL sketches, have large production budgets, writing staffs, and actors. Low-end productions from individual YouTube contributors (for instance, PewDiePie or others playing video games and commenting on them) can also do well. In 2013, the “middle” included Internet darlings like Funny or Die. Today, it is difficult to see them making it.
The next test of this will be Quibi:
There will also be a show about Snapchat’s founding, an action-thriller starring Liam Hemsworth, a murder mystery comedy from SNL’s Lorne Michaels, a documentary series from Tyra Banks, a Steven Spielberg horror show, a comedy from Thomas Lennon, and more.
But with 100 million in pre-launch ad revenue commitments, and Katzenberg at the helm, it’s too soon to count Quibi out yet.
- How has YouTube labor evolved?
As a creative medium we have seen YouTube mature and flourish. From everything I can tell, YouTube creative labor continues to be a kind of invisible college in which knowledge is accrued and transmitted person-to-person by a small number of experienced practitioners, rather than written down and widely publicized. The scoreboard is well understood, but the real rules of the game aren’t well publicized. Is this still true in 2019?
What about below-the-line production labor? In Hollywood, there’s a well-understood labor market, gaffers, best boys, PAs, craft services, etc. Has that extended to YouTube? Or has it been lost in “the middle?”
- Who benefits financially from YouTube?
I am also left wondering who benefits from financially YouTube. YouTube isn’t obviously profitable—it almost certainly wasn’t in 2013—and it’s unclear if its expanding revenues are covering its expanding costs. It’s also not clear to me if it pays off for creators. PewDiePie, YouTube’s top star in 2014, allegedly made $7M in 2014 While that’s a phenomenal haul for a single person, it becomes discouraging when you realize that this is the top haul of the top star for the whole medium—and there are many mouths to feed who don’t have PewDiePie’s reach.
- What effect did YouTube’s onboarding process at around this time have?
If you signed up for YouTube in 2013, the onboarding flow encouraged you to subscribe to some of YouTube’s top channels. This created its own kind of “rich get richer” phenomenon, in which the top YouTube channels got more subscribers because the platform actively funneled new users to these channels. As a new user in 2013, you may not know about Ray William Johnson or smosh and therefore not view any of their videos. If users did respond to this nudge, however, we would expect to see the inequality of views across channels dramatically increase.
- Does one hit “make” a YouTube channel? Is there a lead-in effect?
Game of Thrones opened a flood of new viewers to HBO. The Simpsons opened a flood of new viewers to Fox. Could one video open a flood of new viewers to a channel? Or is it a slow drumbeat of users accruing over time? By examining the data for Jenna Marbles or smosh, you can see a kind of “rise and fall” of views. But this is easily explained by the more recent videos having had less time to accrue views.
- With the rise of Twitch and other platforms, is YouTube unbundling?
In 2015, YouTube unbundled their music experience to YouTube Music, and began charging extra for offline listening and an ad-free experience. They tried to invest in original content in the form of YouTube Red, but recently (as of this writing) moved to a free, ad-supported model for their originals, have canceled several series, and may be moving away from originals altogether.
Should we expect other domains to unbundle from YouTube? That depends—Twitch was able to add a variety of video-game-specific features that made it an attractive medium for a smaller, more passionate audience. YouTube Music was able to capitalize on existing user behavior—searching for music on YouTube—and unbundle it into its own refined experience. Vimeo is arguably dedicated to unbundling business video from YouTube with business-specific features. If there were a fourth domain, what would it be?
Know something about the above? Please write me!
Special thanks to Anita Elberse and Will Young, whose conversations helped shape my thoughts on this topic.