YouTube sees its future driven by small screens
In 2015, as YouTube looks forward to the next 10 years, its emphasis is firmly on a smaller screen.
“For us, most of our focus is on mobile: product development for mobile, content development for mobile, making sure mobile video works on carrier networks all around the world. It’s all mobile, mobile, mobile,” says Robert Kyncl, YouTube’s head of content and business operations.
Kyncl is talking over a video call – Google Hangouts, naturally – to a small group of European journalists, including the Guardian, about YouTube’s past, present and future. Mobile quickly looms large in the conversation.
“It’s a very difficult place to figure out, yet at the same time a massive opportunity, because consumers love engaging with those devices,” says Kyncl.
“We think it’s all about mobile, and that’s where we’re putting most of our efforts across the board… We think that phone is the remote control for your life, and it’s definitely the remote control for your video.”
According to YouTube’s own stats , half of its views are already on mobile devices, with mobile “watch time” growing nearly 100% in the last year, compared to growth in overall YouTube watch time of 50% in that period.
“I think the future, mostly, in advertising-supported video will be around mobile,” says Kyncl, before drawing comparisons between people’s viewing habits on the device that’s in their hands compared to traditional screens.
“Look over the last 70 years: most movies and TV shows have been developed for very large screens, either movie theatres or TVs. They were not interactive, they were not commented on, there was just no activity around it,” says Kyncl.
“That business is not growing. It’s a flat business, and it’s actually slightly declining. It’s a no-growth business at this point. The business that is growing tremendously is online video.”
This, unsurprisingly, is a message that YouTube is pitching hard to brands and advertising agencies, as it tries to persuade them to shift even more of their spending to online – and, indeed, mobile – video.
“If you’re an advertiser, you’ve really been able to get your reach and influence over the last 70 years by partnering with TV channels. That is where you get your reach, and that’s what influences culture,” he said.
“Today, there is a very growing influence on culture from the internet firms, YouTube included, and there’s a tremendous amount of growth on mobile. If advertisers want to capture the future of video and participate in this growth, they should partner with the firms that are doing incredibly well in mobile video. We’re certainly one of those.”
YouTube’s mobile efforts are not just about the big, developed markets with lots of advertising budget, like the US. In fact, the company sees mobile as its engine for growth elsewhere in the world too.
“Today, one of our big activities around the world is making YouTube accessible to as many people as possible, and we’re striking a lot of agreements with telcos in emerging markets who can reach another billion people,” says Kyncl.
“We’re working with them to make video – including YouTube and other services – a lot more cost-effective to access. Many of those folks won’t have TVs, they won’t have tablets. They’ll just have phones.”
Mobile may be YouTube’s big growth area, but the company prides itself on getting in early to new technologies: it started supporting videos shot in 4K resolution in 2010 , for example. In 2015, it’s exploring 360-degree video and virtual reality .
Kyncl is wary of talking up VR too much. “I think it’s extremely nascent. What you’re seeing is basically first announcements and first moves in the products of something that’s going to take a long time to develop in a big way,” he says.
“We don’t know how long VR is going to take and how large it’s going to be. We don’t know. But we know it’s somehow going to play an important role, and we therefore must have focus on it and have people working on it.”
Kyncl praised the Google Cardboard initiative, which provides build-it-yourself cardboard VR headsets designed to use smartphones as the screen. “It’s a very basic and simple thing, but it makes you think about video differently,” he said, adding that YouTube intends to continue experimenting with 360-degree videos with some of its creators.
“We have a whole bunch of efforts underway like this to keep on trying, and you roll it out to users and start to see traction. That’s the beauty of having more than 1bn people [watching] – you start to see traction,” he said.
“We may see traction coming out of India and not Europe, or out of Latin America and not the US… The short answer [to whether VR will be big] is I don’t know. We don’t know. But we know it’s going to be important in some fashion.”
YouTube is also working on subscriptions, on several fronts. In November 2014 it launched a beta of YouTube Music Key , a subscription streaming music service. Meanwhile, in April 2015, YouTube confirmed plans to launch “an ad-free version of YouTube for a monthly fee” later this year.
Music Key’s beta has been extended until September, but Kyncl claims to be relaxed about the delay in a commercial launch. “We’re still going through some development. The launch is coming in a few months from here: there’s a little bit of a delay, but nothing too serious,” he says.
“We have been collecting a lot of feedback and working with that. We got a lot of really great feedback, and thought it was better to address most of it than to launch without [addressing] it… We’re a lot smarter about the product from the heaviest users.”
The ad-free subscription for YouTube as a whole is the company’s other big push into paid content in 2015, which it hopes will be more successful than the introduction of “a la carte” subscriptions for individual YouTube channels in 2013.
“We have not been scaling it. It’s there it’s available for people to take advantage of, but we have not been actively scaling it,” says Kyncl.
“We are focusing on the one subscription that we have discussed earlier and making sure that we roll that out… We just can’t do many different subscriptions, and do them well, and grow them large. So we’re focusing on one big effort today.”
Even so, he maintains that YouTube remains, at heart, a free, advertising-supported service. “Our free ad-supported business is growing incredibly fast. We’ll always have that: that’s our core, and we’ll never stop focusing on it,” he says.
“It’s in Google’s DNA to be in the ad-supported business. Subscription is an add-on. It’s an adjacent business that we’re building.”
– © Guardian News & Media 2015