How Youtube took over our television screens
SAN FRANCISCO — Two years ago, Youtube abandoned its audacious plan to beat Hollywood at its own game.
The video platform had tried to build the next Netflix but didn’t gain traction. So it canceled the shows and fell back on the user-created content that had made it a household name.
It looked like a major concession — a failure, even. It turned out to be just a speed bump.
Now, Youtube consistently ranks as the most popular streaming service on U.S. televisions, surpassing the companies it once tried to emulate. The platform’s unlikely ascent to the top of the leaderboard shows that more than a decade into the streaming era, the internet has continued to change the nature of TV and the habits of viewers.
Youtube’s viewership on TVS jumped during the pandemic, when people were stuck at home and willing to consume more content. The trend has continued, in a sign of growing interest in a more laid-back TV experience. The platform’s popularity underscores the sharp differences between Youtube’s hands-off approach to content creation and the billion-dollar bets of old guard media companies like Disney, Paramount and Nbcuniversal as they compete for audiences.
Since Netflix started offering original content in 2012, TV networks have jumped into the streaming race, trying to outflank one another with major upfront investments. Netflix alone spends $17 billion a year on new series and movies as well as on older fare from other companies’ libraries.
On Youtube, ordinary creators decide what to make and cover production costs. If a video racks up views and ad dollars, Youtube sends the creators 55% of that revenue. If a video flops, it doesn’t lose any money. The company says it has paid creators and partners $70 billion for content over the past three years — but always after it has made money, without having to take financial risks.
The decision to leave content decisions with creators was the most important lesson the company learned, Neal Mohan, Youtube’s CEO, said in an interview.
“Our creators are much better at predicting what our fans and audiences want,” he said. “This is television remade for a new generation.”
So far, it has struck a chord. Mohan said 150 million people in the United States look at Youtube on televisions each month, and they watch the same things that are popular on phones: stunts from Mr. Beast, Youtube’s biggest creator; music videos; and even Tiktok-style vertical videos called Shorts.
Youtube has topped the list for streaming time on a TV for 17 months in a row, according to data from Nielsen, which tracks TV viewership. In June, its share ballooned to 9.9%, setting a record for any streaming platform. That does not include viewers watching from a phone, tablet or computer. Nor does it include the Youtube TV app, which offers traditional network and cable channels for a fee.
In the second quarter, Youtube’s ad sales climbed 13% to $8.7 billion. That was a bit less than Wall Street analysts expected, but Youtube also makes money through subscriptions, which grew in the quarter, Alphabet, one of its parent companies, reported.
The video service also performs well among young viewers. In May, roughly 48% of its TV viewership was from people younger than 34, Nielsen found. Netflix, by comparison, had 43% of its viewership from that age group. Only Disney+, with its child-friendly content, does better in that demographic.
Youtube also has strong viewership totals among Black, Asian, Hispanic and Spanish-speaking households.
“It’s just so broad — that’s what’s driving its strength,” said Brian Fuhrer, Nielsen’s senior vice president of product strategy. “There’s something for every single demographic and every race and
ethnicity, all the time.”
Youtube confronted the ire of TV networks almost immediately after being founded in 2005. They were frustrated that users were uploading their shows onto the video site, without permission. In 2007, Viacom, then MTV’S owner, sued Youtube for $1 billion in a bitterly fought copyright case. (Youtube won the suit.)
Over a decade ago, Youtube made its first foray into commissioning original content. It had paid some creators a majority of the ad revenue from their videos since 2007, but took things up a notch with its Youtube Original Channel Initiative in 2012. The company spent $100 million to start 100 Youtube channels featuring entertainers like Madonna and Shaquille O’neal. One year and more than $300 million later, the company shuttered the effort.
It tried again in 2015, with an even more ambitious plan to build a premium streaming service.
Youtube hired a former MTV executive, Susanne Daniels, who developed shows under the branding Youtube Originals. The next year, the platform started releasing comedies, dramas and a horror-themed reality show, “Scare Pewdiepie,” which starred one of its biggest personalities.
Within a few years, the content library grew to include a Taylor Swift concert and a Justin Bieber docuseries. But only one show became a hit: “Cobra Kai,” which was a sequel to the “Karate Kid” films.
So in early 2022, Youtube pulled the plug.
Mohan said that the company had shut down Originals because creators had been growing rapidly on
the platform, and that it had wanted to “double down” on supporting them.
Over the years, Youtube creator content graduated from the low-budget amateur videos of the early days.
Rhett Mclaughlin and Link Neal started uploading comedy videos to the platform in 2006. Now their channels have a combined 31 million subscribers. On their daily talk show, “Good Mythical Morning,” they interview celebrity guests and goof around in low-stakes experiments.
Some Youtube channels have made their content more cinematic, to look good on larger screens. Half of Michelle Khare’s viewers watch her videos of highstakes challenges on TVS. In one, “I Tried Houdini’s Deadliest Stunt,” she tried to get out of handcuffs and chains while holding her breath underwater. More than 5 million people tuned in and found that (spoiler alert) she succeeded.
The challenge took a year to come together, which she said would not have been possible on traditional TV.
“We’re not bound to a production pipeline,” she said. “The culture of Youtube rewards creative risk.”
Not all TV viewership of Youtube is created equal. It’s mostly broken into two extremes: those who watch incredibly closely and those barely watching at all, according to Tvision, a research firm.
Tvision tracks 5,000 households and deploys a camera near panelists’ TV screens to see whether they are looking at a program. Youtube tends to rank “rock bottom in terms of attention every year” among major streaming platforms, said Yan Liu, Tvision’s CEO.