LAS VEGAS – The chief business officer for YouTube predicts people will be watching more online digital video than TV by 2020.
In a keynote speech at the Consumer Electronics Show last week, Robert Kyncl says viewing patterns are shifting dramatically. “I believe digital video will overtake TV to become the single largest way people spend their free time before the end of this decade. With YouTube being a major driver of that shift."
Kyncl also announced that YouTube's premium subscription service, Red, will begin producing original content including new shows and movies (like TV companies have for ages…). The announcement signals a major strategic shift as YouTube moves from an ad-supported video-hosting service to a media company that will compete with Netflix, Hulu HBO and others. Kyncl also announced a number of new initiatives including expanding its collaboration with GoPro to create 360 YouTube videos with the newly launched GoPro Odyssey and virtual reality films with VR filming company Vrse. He also took the opportunity to announce YouTube would be joining Amazon and Netflix to support HDR (High Dynamic Range).
“More than five hours a day are spent watching video, and those hours fuel a $200 billion economy, with the majority of that money coming from Pay TV subscriptions,” said Kyncl And that cash is the reason why the TV market is such a tasty target for YouTube and others.
He referred to Nielsen data which found 18 to 34-year-olds now spend 9% less time watching TV than last year, yet spend 48% more time on YouTube, with mobile viewing the largest source of growth. People are now spending about an hour and fifteen minutes daily watching online video, which is growing at annual rate of 25%, he added.
In his 60-minute presentation Kyncl said digital video will ultimately win the decade because it's inherently mobile, offers greater diversity of content, improved audio and promises to become the most immersive experience. "It’s endlessly diverse; and most importantly, it’s inherently mobile."
With phone screens becoming larger and battery life getting better he says a growing number of people are using them to watch video wherever they go. This is why all TV companies are also pushing their content to mobile platforms, too.
“App makers and publishers, from Snapchat to the New York Times are all investing in making video a core part of their experiences, accelerating mobile video consumption. When consumers do cut cords in a big way, they’ll be cutting in favour of video experiences that they can watch or control on their phones,” said Kyncl.
Mobile video is also growing because not only can you share it and search it, you can also choose to consume it whenever you choose said Kyncl.
"Think back to your own childhoods. How many of you had to compromise with your parents or your siblings when deciding what to watch in the living room? How many of you had to do that just a couple weeks ago during your holiday break? Your kids don’t have to do that. They can go to their rooms and watch whatever shows and stars they love."
(Ed. Note: Goodness gracious, what crushing hardships we had to endure in the olden days…)
To support his claims, Kyncl brought out several YouTube partners on stage that it has featured and helped launch their careers including Scooter Braun, best known as the person who in 2007 discovered Justin Bieber by finding one of his videos on YouTube.
“For the second year in a row, the most popular entertainers among American high schoolers weren’t film actors or musicians, they were YouTube stars.” – Robert Kyncl, YouTube
“For the second year in a row, the most popular entertainers among American high schoolers weren’t film actors or musicians, they were YouTube stars,” added Kyncl.
He explained further that YouTube's Red is targeted at teenagers who prefer to watch viral videos uninterrupted as well as those who want to create their own content in hopes of becoming the next YouTube star.
The youngest millennials he says are watching more digital video than TV and it has now overtaken social media as their top online activity. As a result he says the average time people spend watching video on their mobile device is forty minutes, a gain of 50% in one year.
The diversity of content available is the second reason digital video will win the decade and "YouTube is the biggest library in the world,” said Kyncl, who then reminded the audience that when cable launched it was successful because it attracted an audience that cared about the specific type of content that was offered.
"MTV began by airing music videos that they got for free from music labels. AMC, which used to stand for American Movie Classics, licensed old films. The Food Network had a few single camera cooking shows. CNN aired live news, read from a desk, 24 hours a day."
He explained that eventually, as these networks grew in size and found success, they evolved to offer original content you couldn’t find anywhere else.
"MTV created the Real World, AMC created Mad Men, the Food Network has Iron Chef – and HBO and Netflix also followed a similar pattern, starting with licensed content and moving into original series." YouTube is now moving in a similar direction. "We’re launching new original shows and movies from some of our top creators, like Lilly Singh, Rooster Teeth and PewDiePie,” said Kyncl.
With Red, subscribers get all of YouTube’s video content without ads and they can also unlock a premium listening experience on its new music app through YouTube Music.
“If an artist has a live performance, a remix, an acoustic version or an out of print track, chances are you can find it on YouTube.” – Robert Kyncl, YouTube
Going forward the third reason digital video will thrive is because video is more important to music than ever. “More than half of all teenagers use us as their main way to find and listen to new artists, in large part because we have the biggest and best music library available. If an artist has a live performance, a remix, an acoustic version or an out of print track, chances are you can find it on YouTube.”
Just five days after it was released, Adele’s “Hello” became the second fastest video ever to hit 100 million views, after Psy’s “Gangnam Style" said Kyncl. "That exposure helped propel her to the biggest first week album sales ever. And now she’s on pace to break a billion views. One billion views used to be an outlier—now we’re seeing that kind of engagement happen multiple times a year."
Rather than give away their music to radio or TV for free, artists and songwriters now earn revenue from those clips, as well as additional cuts, covers and parodies uploaded by their fans explained Kyncl. "To date, we’ve paid over $3 billion to the music industry, and that number is growing year-on-year."
In the end digital video will grow even faster in the future said Kyncl because it provides a much more immersive and interactive experience than TV. “On YouTube, we made a big, early bet on 360-degree and 3D video because it is the first type of video that actually gives you a better experience on mobile than you can have on desktop or on your TV. And since we know mobile video is exploding, formats that lend themselves to mobile storytelling will grow along with them."
He explains that for virtual reality (VR) to be truly successful, you need four things to happen. "You need the camera technology to capture video in 3D and 360, you need a storyteller who can create content using that technology, you need a device for users to view it and you need a platform on which that content can live. At every step of the way, we’re leading this effort."
He says YouTube is placing VR cameras around the world and working with partners to encourage creators to tell "richer, more immersive, more interactive stories."
Just two weeks ago YouTube released a brand new animated film called Special Delivery, produced by the studio behind Wallace and Gromit.
"With Special Delivery, your phone becomes a window to the story happening all around you. You can see different things, follow different characters, and even unlock stories within the stories. All of you can watch it but have a completely different experience."
YouTube is also providing a place for VR to live. "Already on Android and soon on iOS, you’ll be able to watch any video on YouTube in VR with [Google’s] Cardboard, making VR truly democratic and primed to grow exponentially"
He said that partners such as GoPro have helped YouTube push the "technological boundaries of what’s possible, while capturing some of the most stunning footage ever seen.
"Not only are these all trends that point to digital video’s success, but they’re all areas where YouTube truly shines. We offer one of the best mobile video experiences available, we have the largest and most diverse content library in the world, we are a huge force for music and for artists and we are breaking ground as the home for immersive video."
