AI: Google YouTube's 2024+ Ambitions

...AI poised to play a key role

The CEO of Google YouTube, Neal Mohan, articulated the company’s ‘4 Big Bets for 2024’. And of course the outline has heavy roles for AI. They’re top down and bottom up. From YouTube Shorts, to traditional, long-form YouTube. Let me discuss this outline in a bit more detail. First he introduces his overall context:

“Since the very first upload, YouTube has opened up a new way to tell stories. Suddenly anyone with a story could find an audience. And they did just that. People filmed in their kitchens, their bedrooms, and even their backyards. Along the way, they built communities that stretched across the globe.”

“YouTube took this creativity one step further by making a big bet: we decided to share revenue with creators. Since then, the growth of the creator economy has been incredible. More people created content on YouTube last year than ever before. And we’ve hit a new milestone. Today more than 3 million channels are in the YouTube Partner Program (YPP), which gives creators ways to earn money on YouTube. YPP has paid out more than any other creator monetization platform, and we paid over $70 billion to creators, artists, and media companies over the last three years.”

“Now generative AI is driving another evolution that raises critical questions about how we express creativity. As we move forward, we’ll continue to embrace partnership. We’ll develop entirely new ways of empowering creative expression, managing rights, and driving revenue for our partners.”

“We’re at a key moment in history and I’m excited about what lies ahead. Today I’m sharing how we’re thinking about these changes, my vision for 2024, and four big bets we’re making across YouTube.”

He particularly goes onto highlight some AI features the company has been rolling out since last year. This includes ‘Dream Screen’ with AI-generated video or image backgrounds in YouTube Shorts, created by simple text prompts. Also production and editing tools like YouTube Create, and AI analytics and suggestion tools like ‘AI Insights’. Along with other multimodal, translation and other features for global reach of Creator content.

I’ve outlined the massive changes underway in media from legacy and incumbent media to the increasingly massive ‘Creator Economy’, with Google YouTube, Meta’s family of Apps and Services, as well as global stalwarts like TikTok in the lead.

Goldman Sachs already pegs this ‘Creator Economy’ at over $250 billion last year, growing to almost half a trillion by 2027. There’s a meaningful shift to tens of millions ‘Creators’ making content of all types, from text, to video to photos to increasingly multimodal AI driven content. And it’s all resulting in big shifts in consumer behaviors around the world, as this new ‘Medium’ finds a plethora of new ‘Messages’.

YouTube CEO goes onto highlight his four key points, complete with some new YouTube performance metrics:

“#1: AI will empower human creativity”

“#2: Creators should be recognized as next-generation studios”

“#3: YouTube’s next frontier is the living room and subscriptions’

“#4: Protecting the creator economy is foundational”

#3 is particularly of note, because it highlights the one place where Google YouTube has a distinct advantage vs both Bytedance’s TikTok and Meta’s Reels products on Instagram and Facebook. YouTube has a unique advantage in the living room via the TVs in people’s home, due to the massive penetration of YouTube and YouTube TV, as well as mainstream user watching habits at scale in that venue. As the YouTube CEO notes:

“And they’re watching YouTube the way we used to sit down together for traditional TV shows – on the biggest screen in the home with friends and family. Their numbers are impressive. Viewers globally now watch more than 1 billion hours on average of YouTube content on their TVs every day. According to Nielsen's report on streaming in the U.S., YouTube was the leader in streaming watchtime for the past 11 months.”

“Creators are thinking about how to optimize their content for the living room, and it’s easy to see why – it’s where their audience is watching! In the last three years, the number of top creators that received the majority of their watchtime on the big screen increased more than 400%.¹ Like creators Ms Rachel and SypherPK, whose living room watchtime doubled in the second half of last year. And it might not be what you’d expect, but people like watching Shorts on their TVs!”

“We’re bringing everything viewers love about YouTube to the living room experience. And that includes sports. We just wrapped our first season of NFL Sunday Ticket, and it really shows the future of YouTube. We’re bringing all of the content people want to see, like commentary from creators such as Deestroying and the Kelce brothers’ New Heights podcast.”

“We’re also seeing growing consumer interest in our subscription services. We’re excited to announce that we have more than 8 million subscribers to YouTube TV. And we passed 100 million Music and Premium subscribers, including trials.”

It’s hard to see Meta and TikTok entering the living room TVs of mainstream users. The only other big tech companies that could play here would be Apple and Netflix. But they’ve got entirely different priorities and opportunities.

The whole piece on YouTube’s Neal Mohan announcement is worth reading in detail, especially for the directional value of this critical piece of Google’s long-term AI opportunities. I’ve of course discussed these at length. Especially for Google’s Search business, and on video as a critical additional data source for Google’s LLM AI strategy with next generation multimodal versions of Gemini, be they ‘Nano, Pro, or Ultra”.

Google remains a prime example of a company that can blend opportunities what I’ve called ‘Big and Small AI’, and it’s at the very beginning of the beginning of this long journey along the ‘AI Tech Wave’.

It’s good to see some directional commentary from a key part of their product portfolio on YouTube’s key bets for this year and beyond. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)