The New Yorker has seen the future of youtube, and it’s not what you thought it would look like. Google is shifting gears quite rapidly, moving the focus away from user generated content to studio-produced shows & movies – even channels created solely for youtube itself. It’s a revenue driven set of decisions seeking to wrest some of the profits from the incumbent tv channels. The claim is that tv audiences watch up to several hours of tv a night, where YouTube audiences watch only a matter of minutes, and that can be changed by adding a number of things; higher relevance for linked material (by algorithms), channel content such as shows or movies, and content created exclusively for YouTube. It would seem that google is literally throwing money at this, and is trying to lure the entertainment industry to its channel.
Kyncl’s relationships in Hollywood would help in securing premium content; and, more important, he understood entertainment culture. He brought “the skill set of being able to bridge Silicon Valley and Hollywood—an information culture and an entertainment culture,” he told me.The crucial difference is that one culture is founded on abundance and the other on scarcity. He added, “Silicon Valley builds its bridges on abundance. Abundant bits of information floating out there, writing great programs to process it, then giving people a lot of useful tools to use it. Entertainment works by withholding content with the purpose of increasing its value. And, when you think about it, those two are just vastly different approaches, but they can be bridged.”
The crucial difference for me, however, is that this shows a clear misunderstanding of google’s business model. For hollywood, or the entertainment industry, there’s a clear product being sold. The challenge for their business is keeping you coming back for more. Ticket sales, DVDs and now streaming video are examples of different media, but the product is still the same. Google, on the other hand, cares very little about that kind of product. For google, you are the product they care about. Your data, your behaviour, your actions. You are the product, and you only depreciate if you stop being ‘engaged’ in the brand. Each action you make helps Google to refine and distill their digital version of you.
On YouTube, the niches will get nichier, and the audiences smaller still. But those audiences will be even more engaged, and much more quantifiable. Advertisers have to rely on ratings and market research to get even a rough approximation of who’s watching which show. Because YouTube is delivered over the Internet, the company will know exactly who is watching—not their names but their viewing histories, their searches, their purchases, their rough location, and their online social connections. As Shishir Mehrotra, YouTube’s head product manager, explained to me, “Advertising will be done at the level of the audience rather than at the level of the show. Content is no longer proxy for an audience—we know who the audience is. We know what your preferences are, the types of shows you like to watch.” If you posted a video of your trip to Hawaii on YouTube, chances are YouTube is going to advertise airfare to Honolulu to you. Advertising can therefore be highly focussed, not the blunt instrument it is now.
It’s a striking difference between the old and the new. What’s interesting about this (and I’ll follow on with this in another post) is that a) the old industries of print journalism and entertainment don’t seem to really grasp this concept, and b) it also seems like the concept of youtube is shifting very radically, the YouTube of 5 years time will be a very different beast to what we know today.
Also, its a bit shocking to think that it’s only been in existence for 7 years, the web has changed so much because of sites like YouTube. Self expression and consumption have changed immeasurably. Where it goes next is hard to say, but it does look like YouTube will be governed more by ad impressions, studio content and improved algorithms.
We’ll be watching to see what happens next.