Last week we reported that 300 Hours of video are uploaded to YouTube every minute. That's a big number, so, let me try to explain what it actually means in real terms to YouTube advertisers, and YouTube Partners.
Comparing hours to minutes almost certainly obfuscates the truth. To clarify what’s really happening, let’s do the math. If 300 hours of video are uploaded to YouTube every minute, then 18,000 minutes of video are uploaded to YouTube every minute. Or, 18,000 hours of video are uploaded to YouTube every hour. Or, 18,000 days of video are uploaded every day.
To put this ratio into perspective, consider binge-viewing all the YouTube videos that were uploaded yesterday. It would take you 18,000 days, or more than 49 years to watch them all. Or, to pick a more modest goal, mull over binge-watching all the YouTube videos that were uploaded in just the past hour. It would take you 18,000 hours, or more than 2 years until you finished viewing the last one.
Imagine a Cable Provider Offering 18,000 Channels!
That’s one perspective. But there is another? Well, imagine a Multi-System Operator (MSO) that offered viewers 18,000 cable or direct-broadcast satellite channels. Although in the strictest sense any cable company that serves multiple communities is an MSO, the term today is usually reserved for companies that own a large number of cable systems, such as Comcast, DirectTV, Dish Network Corporation, Time Warner Cable, Verizon Communications, Cox Communications, AT&T, Charter Communications, Cablevision Systems Corporation, and Bright House Networks in the U.S.; Rogers Cable, Shaw Communications, and Videotron in Canada; or Virgin Media in the U.K.
So, imagine an MSO that offered 18,000 television channels … and almost 99.98% of them are free!
99.98% of YouTube is Still Free to Air for Viewers
Now, 237 YouTube channels are paid channels. For example, Jim Henson Family TV offers an ad-free YouTube channel featuring exclusive family-friendly content for an introductory subscription of only $2.99/month ($24.99/year). But, the YouTube Partner Program now has more than a million creators from over 30 countries around the world. So, even if 237 YouTube channels are now paid, this means that almost 99.98% are still free.
Now, none of the YouTube channels produced by more than a million YouTube Partners is creating content 24 hours a day, seven days a week, 365 days a year. But, according to Adweek, there are about 45 minutes of programming per hour of cable television. The other 15 minutes goes to ads, PSAs, and promos.
So, in my analogy, there would be about 56 creators programming an average of roughly 19 minutes of content for each day for each television channel. This means that one of the 18,000 television channels in my analogy isn’t assigned to, say, Michelle Phan. There would be one television channel assigned to “Beauty” and about 56 YouTube beauty personalities and vloggers (video bloggers) would each create roughly 19 minutes of YouTube content a day focused on makeup, skincare, hair care, and nails. Michelle might get a "prime time" slot, which is 11:00-11:19 a.m. Eastern, 8:00-8:19 a.m. Pacific, just before work on the West Coast.
Now, imagine an MSO that offered 18,000 television channels which featured original content from more than a million creators from over 30 countries around the world. Now, that’s what I’m talking about. So, here’s the $64,000 question: Aside from my imaginary MSO, who would benefit from this system?
Advertisers are Still in Short Supply on YouTube
Thousands of advertisers are using the TrueView family of cost-per-view (CPV) video ad formats, but there are more than a million creators in the YouTube Partner Program. So, the number of YouTube Partners is hundreds of times larger than the number of advertisers in TrueView’s auction-based system (aka AdWords for video). So, the supply of ad inventory is significantly greater than the demand for ad inventory. Now, supply and demand can change over time. For example, there are more than a million advertisers using Google ad platforms, but the majority of these are small businesses. So, how many small business owners might begin using video advertising … and how soon would they start?
Plus, with TrueView ads, an advertiser pays only when a viewer actively selects a video, or chooses to continue watching a video when it first loads as they browse video content. Unlike cost-per-click or cost-per-thousand impressions pricing, advertisers don’t need to pay every time their ad is shown.
That’s why YouTube Partners need endemic advertisers whose products and services directly address their audience. For example, if you are one of the more than 100,000 independent consumer electronics content creators with a YouTube channel, then Samsung would be one of about 25 endemic advertisers. It is “native” to the consumer electronics market and has a real need to advertise on YouTube channels like yours.
200% Increase in Video Uploads, 32% Increase in Video Ad Views
Using the most recent data available from comScore Video Metrix, which is now seven months old, Americans viewed close to 3.1 billion video ads in March 2014 on Google Sites, driven primarily by video viewing at YouTube.com. By comparison, Americans viewed more than 2.3 billion video ads in March 2013 on Google Sites. That’s a 32.2% increase year-over-year.
Now, a Google spokesperson has confirmed that 300 hours of video are uploaded to YouTube every minute. And as far as we know, 100 hours of video were uploaded to YouTube every minute a year ago. That’s a 200% increase year-over-year.
Supply and Demand: YouTube TrueView Advertising & Creators
What does this mean for the already imbalanced supply and demand in the auction-based TrueView system? It means the average CPV should probably continue dropping for thousands of advertisers, while more than a million YouTube Partners undoubtedly need to create more content to earn even the same money from their YouTube channel that they did last year.