YouTube has paid a whopping $70 billion to video publishers on its service in the last three years, reflecting how it has become a major piggy bank for both creators and media companies that reach a big enough audience.
YouTube CEO Neal Mohan announced the milestone Tuesday in a letter to his service’s video community, in which he also lays out YouTube’s priorities for this year. In it, he talks about focusing on synthetic intelligence to facilitate the creation of videos, professional-quality videos. and the growing focus on subscriptions that allow consumers to watch ad-free videos while also paying dividends to content owners.
The letter comes after a strong 2023 fiscal year for parent company Alphabet, driven in part by the immediate expansion of YouTube’s advertising and subscription business. The video giant, which generated more than $9 billion for Alphabet last year, has become a huge source of prospects. expansion of its parent company as consumers spend more and more entertainment time, from cable TV to streaming, on big-screen TVs in their living rooms.
“They watch YouTube like we used to, as well as watch classic TV shows,” Mohan said.
In a sign of its status among creators, Mohan said, YouTube now has over 3 million channels enrolled in its ad and subscription revenue sharing program (YPP). Those channels—mostly individuals and small outfits that he described as “next-generation studios”—get a cut of any revenue their videos generate.
The world of writers has become so large that Mohan, in his letter, warned that YouTube could simply pressure authors in Washington over unspecified legislation. He wrote that the company “will help policymakers and industry partners understand the economic and entertainment value that authors bring. “
In terms of subscriptions, Mohan wrote about what they’re like on YouTube and how he’ll be asking for more in 2024. Last year, they generated $15 billion, thanks to YouTube’s premium NFL Sundays TV, music and ticket offerings. Mohan also revealed that YouTube TV (a replacement for cable) has 8 million subscribers while Music has 100 million (including trial members). The higher subscription figures show how YouTube continues to encroach on territory ruled by paid streamers such as Netflix and Spotify Premium, especially the latter since the music platform has 226 million paid subscribers internationally (while Netflix has around 260 million).
The real position in which YouTube can compete with Netflix and Spotify is the living room. With the help of YouTube TV, NFL Sunday Ticket and other big-screen-ready content, Mohan said users watch an average of more than 1 billion hours of YouTube content on their TVs a day, rather than watching it on their computer or smartphone. This comes as YouTube takes on TikTok for dominance of short, engaging music videos, especially with YouTube’s arrival of competing TikTok Shorts.
While content that can be used in a living room could be a wake-up call for creators, most of whom don’t have the means or education to create the best content as a whole, Mohan hopes that YouTube’s AI, with “proper protections” will allay their fears. These AI equipment come with Dream Screen, which creates a professional or realistic background, and Music AI Incubator, which helps with audio. “Everyone has access to AI equipment that will overcome barriers to artistic expression,” he said.