Welcome back to Cybercultural, a weekly newsletter covering the intersection of technology and the cultural industries.
Let’s start with a quick look at what’s happening this week, before my US readers head off to celebrate Independence Day:
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On a personal note, my nearly 15-month old son started at daycare for a couple of days a week. That gives him an opportunity to make new toddler friends, and me an extra day per week to work on Cybercultural. So hopefully it’s a win-win. 😊
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Analysts across various cultural sectors continue to digest Mary Meeker’s annual internet trends report. I did my analysis a couple of weeks ago, focusing on how photo sharing is impacting the cultural sectors. Since then, Rande Price has examined what Meeker’s report means for news publishers, while Cherie Hu and friends have looked at it from a music industry point of view.
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The ramifications of Facebook-led cryptocurrency Libra are also still being worked out. I explored what it means for Spotify (a Libra organisation member) and other digital media in a previous newsletter. Since then, Ben Thompson has posted an insightful Stratechery analysis and Paul Sweeting wrote about how Libra could enable micropayments for Spotify.
Before you click any of the above links, read on for my thoughts on YouTube’s original programming pivot. After that I’ve got some juicy data points for you, followed by more news at the nexus of tech and the cultural industries.
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What the YouTube Originals pivot tells us about what is (or isn’t) premium content 🎥
YouTuber Jake Roper in the Mad Max episode of his YouTube Originals series, Could You Survive The Movies?
The LA Times has reported that YouTube plans to unlock original programming (which it labels ‘YouTube Originals’) from its YouTube Premium paywall by 2020, and set the shows free in the ad-supported jungle of YouTube’s main site and app. In short, YouTube is pulling back from its original intention to compete with SVOD (streaming video on demand) market leaders Netflix, Amazon and Hulu.
The fact is, YouTube has never wanted to commit the necessary money to compete with the likes of Netflix and Amazon. Netflix spent $8 billion on content last year, while Amazon’s last reported content spend was $4.5B in 2017. By comparison, YouTube was only committing “a few hundred million dollars” per year to original programming according to a Bloomberg report last February. The same report also noted that YouTube would not be increasing that budget over the next two years.
The following chart shows just how far apart YouTube is from the two SVOD giants, in terms of content spend on original programming. The trend lines also show YouTube Premium’s budget stagnation, compared to the relentless upward trajectory of both Netflix and Amazon (admittedly YouTube only has a couple of data points, but the point stands).
Data sources: Matthew Ball (Redef), Business Insider, Tubefilter
Now, it must be pointed out that YouTube was mostly spending its money on its own platform creators – not Hollywood stars, as is common on Netflix and Amazon. While the YouTube Originals lineup does include some relatively minor Hollywood fare (such as the Ben Stiller-produced ‘Hot Cargo’ starring Chris Messina), for the most part it is made up of shows from YouTube creators – like Mark ‘Markiplier’ Fischbach (23.9 million subscribers), Dude Perfect (43.1 million), Marques Brownlee (8.8 million), and Jake Roper (308K).
What the YouTube Originals pivot tells me is that YouTube doesn’t think its top creators are ‘premium’ quality – at least not compared to Hollywood showrunners and actors. What we’ve learned from the success of Netflix and Amazon in the SVOD market over the past several years is that consumers want – they demand – premium scripted content on their TV sets. Which costs big money. Shows like ‘Orange Is The New Black’ reportedly costs around $4 million per episode, or $50M per season.
While YouTube Originals initially intended to compete on high-end scripted content, it has since decided to focus on unscripted shows – such as YouTuber Jake Roper’s show, ‘Could You Survive the Movies.’ As Deadline reported last November, YouTube “quietly stopped taking new scripted pitches” over September and October. Even though there are still successful scripted shows on the platform, such as the ‘Karate Kid’ reboot ‘Cobra Kai’, we can expect to see those scripted shows peter out in the coming months.
With all due respect to Jake Roper, whose show I enjoyed checking out, the YouTube pivot confirms what many of us suspected: User Generated Content does not equal premium content, at least in the SVOD market.
Data Points 📊
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Nielsen: traditional live TV watching continues to erode, while the amount of time spent streaming video on TV-connected devices was up 8 minutes to 54 minutes a week. 📺
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Newzoo’s 2019 global games market report: Global consumers will spend $152.1 billion on games in 2019, an increase of +9.6% year on year. 🎮
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Ipsos-iHeartRadio survey: 69 percent of consumers tune in to the radio at least once a day compared to 34 percent for streaming. 📻
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Business Insider survey of < 2,000 Gen Z people (13-21) finds that 59% list social media as their top news source, with 65% checking Instagram daily. 📱
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Interactive Advertising Bureau (IAB) report (pdf) on podcasting industry by PwC: podcast advertising revenue is forecasted to exceed $1B by 2021. 🎧
Noteworthy: Hearst SVOD, Spotify shutters direct uploads, Authorpreneurs, AI in art world 👀
Magazine titan Hearst Magazines has just launched a new guided fitness app, called ‘All Out Studio.’ Adweek reported that the app “has more than 35 hours of video content from Hearst brands, including Men’s Health, Women’s Health, Cosmopolitan, Runner’s World and Prevention.” It will cost $100 annually or $15 monthly, which seems like a high price point for content that is easily obtained on YouTube for free. Then again, it’s still cheaper than a gym membership. 📹
Spotify has shut down the ability for indie artists to upload their music direct. The reason? “Spotify believes that music distribution is best handled by partners.” It’s true there are better tools out there, like TuneCore, that enable artists to upload their music to Spotify and a plethora of other streaming and download platforms. But Spotify knows it could make the lives of indie musicians so much easier, by supporting artist-friendly features like direct upload and payments. One positive spin: Spotify can now focus on helping artists with discoverability and using social tools on its platform. Unlike direct uploads, that’s something Spotify is in a unique position to do. 🎹
The Alliance of Independent Authors (ALLi) has introduced a new member category: Authorpreneur. ALLi director Orna Ross explained that the label, which is being applied to self-published authors, “most clearly describes the new breed of author and the new approaches to making a living as an author in these digital days.” There’s quite a high bar for this category though, with ALLi requiring an author to provide “proof of 50,000 book sales over the previous two years.” I can tell you I didn’t come close to that number of book sales when I self-published a novel a few years ago. Regardless, I did learn there’s more to self-publishing than simply writing. As Ross noted, in the digital era an authorpreneur must “integrate their books into an ecosystem of products and projects that can include advertising, blogs, events, merchandise, podcasts, social media publishing, technologies, tools, video, and more.” 📚
In yet another ‘could AI revolutionize [insert cultural sector here]’ article, The Observer ponders the use of artificial intelligence in the art world. Christie’s photographs specialist Anne Bracegirdle says AI could, for example, provide “more detailed nuance to image recognition and object recognition” when authenticating art pieces. Meanwhile in The Art Newspaper, Margaret Carrigan ruminates on “the datafication of the art business,” which she says is ultimately a risk minimisation strategy for art collectors (the more data, the less risk). My take: as with all AI stories about the cultural industries, the technology is overly hyped. At best, AI in the arts can augment human professionals; as with the Christies example cited above. At worst, it makes creative decisions for us – which is what Carrigan is rightly worried about for art buyers. 🎨
Tweet of the week 🐦
I’m a fan of the #musetech job bot on Twitter, created by designer Desi Gonzalez. The hashtag #musetech is regularly used to reference museum technology on Twitter, and Gonzalez decided to have some fun with it. Every day, her bot tweets out a random “#musetech job title from the last 50 years.” This one is pretty close to my actual job title in 1999 (I was an “information developer”):
Thanks for reading and happy Independence Day, especially to all the indies out there. See you next week!
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