YouTube - Fueling the content revolution

June 2016

For a while now, everyone involved in the entertainment business has been pondering the same question: what is this industry going to look like in a few years? We’ve lived through the golden age of television and now we’re out the other side, looking at a landscape being reshaped by seismic shifts in network ratings among younger viewers, surging online video consumption, and the emergence of new mediums like virtual reality and 360-degree viewing.

What is Peak TV?

In Hollywood, the conversation has centred around the idea that we’ve entered a phase of entertainment history people are calling ‘Peak TV’. Peak TV is the theory that we’ve reached a point of maximum expansion in the production of original programming - with over 400 original shows available on US networks, there’s a belief that audiences can’t keep up, and that great content is being swamped in an environment saturated with new material. The theory argues that this scenario is unsustainable: audiences will tune out, advertisers will spend less, and eventually the content bubble will burst.

Now, that might make you want to run out and start stockpiling box sets, but at YouTube our experience suggests that the future will play out quite differently. Since YouTube launched in 2005, we’ve been at the epicentre of an explosion in creativity, audience choice, and passionate engagement between creators and fans - and we believe that contrary to the pessimistic predictions of Peak TV, original content is poised to thrive in the coming years.

Are you not entertained?

There’s no doubt that the data behind the content explosion is staggering: over the past 15 years, around 10 cable channels per year have been added to US Pay TV packages, bringing the average total to over 200 channels per subscriber.1 High-speed internet access has opened up new means of distribution in the form of Hulu, Netflix and Amazon Prime, where old favorites and new flagship programming are streamed directly onto mobiles, games consoles and smart TVs. And that’s just the world of traditional content; beyond these channels there’s video on our social feeds, there’s Snapchat, Vine & Periscope, and of course, the 400 hours of content uploaded to YouTube every single minute of the day.

This profusion of viewing choices can definitely feel chaotic at times, but where the Peak TV theorists are mistaken is in how they believe audiences are responding. When faced with an unprecedented abundance of content, audiences aren’t tuning out, they’re tuning in more than they ever have before. Over the last ten years, the amount of time we spend watching video has increased by two hours per day, making it our third most time-consuming activity after work and sleep.2 Content is increasingly available on-demand, and on mobile, meaning we can watch whatever we want, whenever we want, wherever we want - and we’re seizing that opportunity every chance we get.

What has remained unchanged during this period of growth in both content and audience appetite, is our attention span. When we look at viewing behaviour, it seems that people only watch around 18 channels or networks on average3, with the number not really fluctuating even as the number of available channels expands (for mobile apps the situation is even more stark, with most people spending around 85% of their time on just five apps4). Faced with overwhelming choice, it turns out that we respond by focusing even more on what we love.

And as we double down on the content we’re most passionate about, our relationship to video has changed. What was once a medium for distraction from work and stress has become a haven, where genuine community and a sense of belonging are now possible. Viewers are more engaged than ever before, and simultaneously more aware of the many demands on their attention, which presents both a challenge and an opportunity for marketers.

Marketing to the new media landscape

When the media landscape was still concentrated in a handful of channels and a handful of important shows, if you wanted to get your message out to a huge audience, you had a pretty good idea of where and when you could find them. Fewer people watching the same thing at the same time mean we don’t live in that world anymore. Achieving reach used to require simply casting your net in the ad breaks between an episode of ‘event’ television, but now that audience has scattered and if you want to communicate with them you have to approach them on their turf.

Reaching the right people, in the right place, at the right time, is definitely more complicated than it used to be, but the potential upside is immense. If you can find a way to participate in the conversation between these passionate, engaged viewers, you have a chance to land your message more powerfully than ever before. In fact, when done right, our viewing data shows that the distinction between brand and non-brand content melts away, with many of YouTube’s top trending ads each year being produced by brands.

While individual audiences might be smaller, their insatiable appetite for the content they love also represents a huge opportunity. On-demand viewing has introduced us to the phenomenon of ‘binge watching’, with viewers consuming entire seasons of shows like House of Cards and Transparent in only a couple of days. And this behaviour isn’t just visible on services like Netflix and Amazon Prime - in a recent study, it was reported that an incredible 37% of millennial viewers (aged 18-34) binge watch on a daily basis, with a third of those surveyed saying that they did their binge watching on YouTube.

Behind all of this passion are YouTube’s creators. A new generation of influencers are bringing about a revolution in the nature of celebrity as profound as anything since the end of the studio system, inspiring a genuine sense of community between stars and fans. At the heart of this change are honesty and personality, as YouTube creators share their true selves - their feelings and opinions, joys and flaws - with an audience who love and respect them for it. The effect is transformative, with 60% of millennials saying that a YouTube creator has changed their life or their view of the world. The creator community has enormous potential as advocates and spokespeople, with nearly 60% of that key millennial audience saying they are more likely to take the advice of a YouTube star than a traditional celebrity from the world of film or TV.

From engagement to immersion

With so much incredible content to choose from, the real risk for brands isn’t noise or distraction, it’s apathy. Viewers want to be engaged and expect to be entertained - and if they aren’t, they have almost limitless alternatives. Fortunately, a variety of new technologies such as virtual reality (VR), 360-degree viewing, and live streaming promise new and exciting ways to create deeply engaging experiences.

VR and 360 place viewers directly in the scene, demanding their full attention as they navigate the world you’ve created using the device in their hand. In a recent example of how well this approach can work, Broadway musical The School of Rock filmed a 360-degree video which led to a 300% increase in traffic to their booking website, contributing to a gross of over $1m per week for the show. In a similar vein, live-streaming commands viewer attention through immediacy - insisting that you watch now or lose the moment forever. Already, we’ve seen major events like the Royal Wedding and Felix Baumgartner’s space jump live on YouTube, and we’ll be seeing many more meaningful moments as we open up mobile live-streaming to anyone using the YouTube mobile app.

The golden age of content

At the heart of the theory of Peak TV is a basic misconception about the audience. Its proponents believe that viewers are an exhaustible commodity, but the reality is that they are a truly renewable resource, enriched and re-energised by innovative content and engaging technology. If you make something for an audience you understand, they’ll watch it, whether you’re a brand with a million dollar budget or a teenage girl in Dubai. The golden age of TV might be over, but the golden age of content has only just begun.

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