This is picking up on a topic I started here.
In the original post, I gave a fairly brief explanation to what Alphabet (Google) has been telegraphing over the past decade in regard to YouTube's future, now present. That transition, in short, is to a network television streaming platform. However, YouTube isn't aimed to be another Hulu. Where the YouTube platform is heading is to a fully custom, on-demand network television streaming service.
Imagine telling your cable or satellite provider that you only want Law & Order: SVU, South Park, and The Walking Dead with a side order of History Channel and the entire ESPN suite. Not only that, but you want the ability to watch any existing episode of any show currently available of the aforementioned on-demand. Oh, and you're only going to pay for that content, none of those bundles or package "deals". Your provider would most likely not even know how to respond to such demands...other than perhaps a smug "no". Well, this kind of custom-tailored subscription service is where YouTube is heading over the coming years. As I said earlier, this has been in the works for around a decade. Albeit in very small increments.
Google obtained YouTube in October 2006, after the platform had gained some corporate backing (Underground music contest sponsored by Cingular). In August of 2007, InVideo Ads launched. The significance of this step is what began to shape YouTube into what we have seen so far. For better or for worse, activity began to sore as more content creators entered. One could think of it as a digital gold rush.
In response to this rush, YouTube then launched the YouTube Partner Program in December of 2007, a program still available as of now (but I expect to see it scrapped or made heavily exclusive over the coming months). This allowed for targeted ads on select channels' content. We began to see YouTube flooded with content, again for better or worse, as more people hopped on board. In 2008, Google began to pick up the pace on developing the platform into a monetization machine. While many of these additions and changes could be seen as "creator tools", in all reality, Google was building the foundations to the end goal; network television.
YouTube Insight, Click-to-Buy, promoted videos, and Pre-Roll Ads all launched within the 2008 time frame. Creators had tools available to them that, prior, they would've had to go to specialty firms and media groups to obtain. And they had it for free. So it's no wonder why the majority of the YouTube creator crowd had no questions about it.
In 2009, another flurry of changes and utilities released. Expansion to home page ads, Individual Video Partnership, and "skippable" pre-roll ads. But most significant of all 2009 developments was Video Targeting. It's the Video Targeting capabilities that have played the most significant role when it comes to advertising via YouTube to this day. Video Targeting is also one of the most actively developed assets of the YouTube platform. One of the most recent changes to occur with Video Targeting is the ability for advertisers to target their ads to individual end-users, based on that user's search history. Not only does this rub me the wrong way completely, but it gives advertisers unprecedented access into the mindset of the YouTube audience.
Now many may think "big whoop, it's just my search history". But Google's search history functions in a very interesting way. Let's say you type into a Google search sailboats for sale. Well, the analytics of Google search, more-or-less, goes "So this user's search history indicates they are/most likely male/female. They like sailboats. They are in the market for a sailboat. That puts them into this income bracket and associates them closely to this subset of lifestyle interests. This also indicates that the user is most likely interested in other outdoor activities, so hiking, camping, RV travel..."
You get the gist. Google begins to profile you immediately. And the more you use their products, the more accurate the profile. So they have a very real chance to predict exactly what you're interested in, and what you will most likely purchase. What this means to advertisers, in short, is inexpensive and highly effective marketing. So if you've ever had one of those "wow, that's weird" moments when seeing an ad for something you actually were considering...well, that's the powerhouse of Google's analytics.
So what does this have to do with network television? Well, if you've been under a rock...Television networks, the vast majority of them, run on advertising dollars. The higher the network's audience, the broader the demographic, the more valuable they are to advertisers. The challenge of "the good ole days" of television marketing was finding a means to advertise to a broad demographic in a manner that would produce a high-yield return (a lot of purchases of advertised product). That means selling (generating interest) to a chunk of that network's demographic that would most likely have no interest in the product. You don't see many power tool commercials on Lifetime, for instance. That's because the demographic of that network has a near-zero chance of purchasing the product. It is a very small number of the overall audience that will purchase that product. So the advertiser goes elsewhere to pitch their new saw.
However, if Lifetime content was on YouTube, the advertiser can totally bypass the network demographics and tap into the analytics tools to find that handful of viewers, and pitch the saw to them, since that handful of viewers have a profile that exhibits traits of interest in that product. With YouTube, advertisers don't rely so much on the network's audience as they do individual user data. Advertisers don't have to worry anymore about ineffective ad campaigns (aside from a crappy pitch or ad-blocking software). Also with the analytics available, they now have the ability to get right into the mind of consumers, down to sub-categories of demographics, and formulate even better pitches (commercials). Down to a point to where people will see completely different presentations of the same product ad. For marketers...this is invaluable.
So, with that knowledge, this part will (hopefully) be clear. YouTube's transition into a consumer-catering television streaming platform means millions (if not billions) in revenue. As it stands, YouTube's revenue is roughly a profit-share system. Alphabet (Google) gets a majority cut of advertising dollars, and the content creator gets the remainder. When an advertiser pulls ads from a creator, that's less revenue Alphabet has to part with. That also makes creating content less or not profitable for creators, which in turn, either has them looking for another means of revenue, or quitting altogether. Both great things for Alphabet considering they're retaining more revenue. Especially great when it's an alternative form of revenue that the creator generates (such as Patreon support, direct donations, etc.), since then, that creator sticks around to produce content during the transitional period, providing the platform with audience retention, which is great for attracting advertisers.
With network television "arguably" failing (of course, at no fault of their own...pfft), the networks have had to figure out ways to attract advertisers to their dying medium. Well, they've found enough to be on what I consider life-support. With networks licensing out their programs to streaming services, they've found an increase in profit. Some networks have created their own streaming platforms with mixed success (I still think it comes down to having garbage content).
So what other issues do networks face? Well, the service providers are definitely no help. With ever inflating costs for less and less "product", the service providers have had a rather direct role in the death of traditional television. The costs coupled with networks' generally terrible content; more consumers aren't even bothering with cable or satellite services. There's also the issue of narratives, which many people are tired of hearing...even if it's a narrative they happen to agree with (I like to call that the "favorite song effect").
What would networks need to gain footing again? Well, they would need larger audiences in order to attract advertisers. They would need a means of appealing to advertisers; that their network is the best choice for advertising. They would need a diverse audience to appeal to a broad number of advertisers. And they would need to know what content is generating the most active response and generating the most viewers...now it may be making sense as to why YouTube is the solution to network woes...
No need to focus on demographics and viewer counts. Google's analytics does that for them. No need to worry about appealing to advertisers, Google already has them lined up. No worries about service providers. The consumer will eventually be able to pick exactly what they want, leaving the networks to study their numbers and concoct shows that will pull in subscribers. Which also allows networks to be very selective as to what they produce...rolling the dice with concepts becomes a thing of the past with "to-the-minute" analytics...it's almost like Google has been working on these solutions for years...which is the point...they have been.
While I don't see Alphabet blatantly sweeping out independent creators, I do see them ceasing mass monetization. The partnership program will be the creator's only means of generating income directly through YouTube, and that program will become all-the-more exclusive as the transition to network television finalizes. The transition itself doesn't really phase me that much. Perhaps because I have been seeing it happen over the years. But what does irk me is the abuse creators are receiving in the name of profit margins and appeasing business prospects. Alphabet is back-handing the very people that made the YouTube platform "profitable" to begin with. Without these creators generating content over the years, YouTube would be merely another video platform among the many. And when it comes to "outside" abuse (cough Wall Street Journal cough), Alphabet allowing it to occur, and then catering to these imbeciles just affirms my observations...YouTube will be the new television...at all costs...
