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Conversations about the media economy, and how to think clearly when things get messy.
This is puzzle problem mess. Conversations about the media economy and how to think clearly when things get messy. In this episode, I'm joined by Ian Whitaker. Ian is a London based analyst with over twenty years experience covering media and technology equities, and he's one of the clearest voices making sense of the shifts underway in the media sector, particularly around advertising and marketing. In this conversation, we focus on the rise of YouTube and why broadcasters and content owners continue to struggle with where to place YouTube in their strategic thinking.
Dan Fahy:Here's Ian Whitaker. Ian, the debate around the ascendancy of YouTube tends to be anchored around its enormous audience scale. But is that the right frame for thinking about YouTube?
Ian Whittaker:No, I don't think it is. I mean, first of all, let me just say YouTube is a great platform. So there's no doubt about it. The content you've gotten is hugely wide ranging, obviously, huge for a variety of, of topics and so forth. So it is something where when you look at it, you think, wow.
Ian Whittaker:This is to actually bring such a library together of content has been fantastic. Having said that, certainly when it comes to advertisers, another way that they should look at it is that you really do have to take YouTube as its own unique beast. At the end of the day, if you look at the content that it is shown on here, you've got a huge variety of things there. It can either go from full length movies, full length sort of programs, all the way down to extremely short clips. Some professionally generated content on there, but a lot obviously is amateur as well.
Ian Whittaker:There's no filter here, and I think that's a key point with this. You know, it's been the more sort of, aggressive comments about YouTube sometimes referred to it as a bit of a swamp. I don't think that's necessarily correct, but at the same time, yeah, there's no doubt about it when you look at the content. You've got someone there that is gonna be attracted to advertisers, the professionally generated content. You've got a lot where, quite frankly, advertisers probably want to stay well away from.
Ian Whittaker:The issue we also have with YouTube is, quite frankly, when it comes to visibility, there's not a huge amount of visibility on what actually constitutes viewing on the platform. Mhmm. So there was a survey by the BBC that I think turned around and said the average median views is around 41 views per video. Yeah. If you look to the average time spent on the video, it was around 60 Mhmm.
Ian Whittaker:On here. Everyone always goes all all about mister beast and how important that is, but that's sort of at the very, very tail end. Most content when it comes to YouTube, quite frankly, it is outside music videos, kids, and whatever professionally generated content is on there. Quite frankly, most of it is gonna be fairly amateurish. And that sort of that raises the question for advertisers who are thinking, if you wanna reach an audience, what's the type of audience you wanna reach?
Ian Whittaker:And in what context do we want to reach them as well? So I I think trying to put YouTube into a particular bucket, say YouTube is TV, YouTube is something else, it's something a bit more unique. Obviously, got quite a lot of close links for the likes of TikTok and so forth. But I think from advertiser standpoint, the way they should look at it, as I say, is really to consider it as of its own kind. And when it comes to its advertising strategy, that will drive their decision making process.
Dan Fahy:Got you. And why do you think broadcasters and content owners, well as advertisers and marketers, struggle with where to place it in their strategic planning?
Ian Whittaker:Well, because there's still this debate that goes on as to whether YouTube is competition for TV advertising money or whether it's supplementary to TV audiences. I think this really boils down to if you step back and think about this as what's the bigger the bigger level, the the higher level question here, is that do people follow platforms or do they follow content? If you believe that they follow platforms, then if you're a broadcaster, you can see the sense of actually putting content on YouTube because the argument would go that younger audiences are no longer watching television, and therefore what's happening is they've migrated to platforms such as YouTube and TikTok, and therefore broadcasters should put their content on those platforms in order to capture those audiences. Now my view is that audiences actually follow content. Yet if you want to take this to its extreme, if you had like a bunch of just inane nothingness on YouTube, would audiences go there?
Ian Whittaker:Of course, they wouldn't. People want content to watch. They follow the content that they like. And so my view of things is that essentially the way the broadcasters need to think more about this is the content is actually critical, and it's not so much necessarily the build on YouTube will deliver them sort of more audiences. I would argue that maybe is a stepping stone, but realistically, if you are a broadcaster, what you want to do is you want to get those audiences onto your own platform, watching on television, or probably more likely your own streaming platforms.
Ian Whittaker:Because at the end of the day, why share your revenues with YouTube? Yet it is far better as a broadcaster to take a 100% of the cut rather than, let's say, 55, 60% and and so forth. And I think what's happening here is the this this is the the fundamental question that broadcasters are struggling with. There's been a lot of talk about the fact that, yeah, that YouTube delivers audiences that broadcasters cannot reach. Yeah.
Ian Whittaker:Impressively, what that is saying is that essentially those audiences have been lost to broadcasters forever. I don't believe that's the case. Yeah. A lot of content we don't know the figures because quite frankly, we don't have any sort of visibility from the YouTube stats. But presumably, a lot of the content on YouTube will be professionally generated content, either in its long form nature or that will come from short form clips.
Ian Whittaker:If those are attractive to audiences and audiences like to watch them, then what broadcasters need to think is, okay, this is our content. How can we monetize it most effectively and how can we think about this strategically over the longer term? And what that would suggest is that, fine, use YouTube as a a temporary, let's call it, strategy in order to reach those audiences. The ultimate goal, though, should be to get those audiences to come to the broadcasters platform. And I think when it comes to your question about why is it the broadcasters still don't know where things sit?
Ian Whittaker:In my mind broadcasters still haven't worked out fully, both in terms of of what is the sort of wide audiences watch content, what is it that attracts audiences, and that's the key question that needs to be resolved as well. And also as well, the longer term strategic thinking is and working through the rationality of if audiences still very much follow content rather than platforms and most of our content is actually driving large audience views on YouTube, logically what we should be trying to do is get those people across to our own platforms. And I don't think that's yeah. It will be happening in certain places. Disney, I thought, was quite interesting with their comments last week at CES for Disney plus.
Ian Whittaker:But I think most broadcasters haven't fully thought through yet the strategic implications over the long term of what they need to do with, content and where YouTube fits into that.
Dan Fahy:It's really interesting that push and pull between content and platform because there's a race against time in that the longer an audience cohort is habituating on certain platforms, the harder it's gonna be to get them off platforms or to think about other platforms.
Ian Whittaker:I think that's true, but, I mean, broadcasters have certainly shot themselves in their own foot in their own feet over the, yeah, over the past couple of years with their strategy. You know, one thing that is interesting on this on this whole debate is if you think about how the advertising market traditionally has worked, it traditionally works on the idea that not all content is the same. That we've got premium content and peak times that therefore deliver a premium over let's say daytime and also as well just low quality content. One of the sort of big underlying questions that you've got here is that whether that distinction still holds or whether it fades away. And it doesn't really matter what sort of people watch and what time of the day that they watch it or indeed that they watch it in a mass market cohort.
Ian Whittaker:I mean, if you boil it down, the the sort of phrase, the attention economy, sounds like a great catchy phrase, but what it ultimately says is that all viewing time is the same. Doesn't matter what content you watch. Yeah. It could be AI slot. It could be premium content.
Ian Whittaker:That actually doesn't really matter. What matters is the percentage of viewing that takes place. And arguably, the a lot of what's driven going back to the question before about how broadcasters see YouTube, one of the things that broadcasters need to be wary of is increasingly, if you look at the debate, is taking along the lines of, if you have this percentage of viewing, you should get this percentage of advertising money. And for broadcaster, that's probably a negative scenario if that becomes the default. Because, again, your whole model has been based on the idea of premium content, some content is better than others, peak times, sometimes they're better than others, and the scale that comes through from a mass market audience.
Ian Whittaker:That sort of thing of your your share of advertising equals your share of audience Mhmm. And it's a very simplistic calculation. That's one that really benefits the tech platforms. Because quite frankly, their great weakness is their business model is not set up to produce professionally generated content. It just doesn't work, particularly when you get outside The US, which is why you never get the platforms going after major sports rights in Europe, except to the marginal level.
Ian Whittaker:The business model just doesn't work. So essentially for these platforms, what they need is either it needs to be other people's content on there or what you want if you're going to take advertising money is essentially say, it doesn't really matter whether the content is premium or not. It doesn't really matter what time it's shown at, or it is a very simple calculation of saying this amount of audience gives us this amount of advertising share. And yeah. So from a standpoint of of the broadcasters, they need to start thinking those ways.
Ian Whittaker:And one of the areas, and it comes back to what we're saying about the strategic mistakes they made before, one of the areas they should be thinking about, for example, is kids. You know, if we think about kids programming, the reason why kids are on YouTube is because a lot of the content was cut out from TV. But if you look at actually one of the strongest arguments that the likes of YouTube has at the moment for taking TV advertising money is because it's got a large audience share. Where does a lot of that audience comes from? It comes from kids.
Ian Whittaker:It's gonna come from kids who are watching programs like Bluey and Cocomelon, etcetera, on YouTube. And therefore, what YouTube is there to say is we've got this amount of audience, you should get this amount of advertising money. Now that can take into account that if you're a kid, you haven't got any spending powers to what could a user an advertiser. There's all the obvious question of, well, do kids actually maintain their viewing habits as they move forward? So I think that is a question that's very much open to debate on things.
Ian Whittaker:But there are things that broadcasters can do that are quite simple to move the dial back in their favor. I think what they have to do though is they have say they have to start thinking strategically. And at the moment, I would say that it's starting to change now, but, you know, certainly the pattern has been for over the past couple of years that broadcasters haven't thought in a long term strategic way. Now,
Dan Fahy:obviously, the biggest advocate of the YouTube is TV label is YouTube. And why do they care about this so much now?
Ian Whittaker:Well, yeah, it's to say, it's always follow the money. I worked in banking for over twenty years, but, yeah, either directly or indirectly, what will happen is you always look at where the money trail goes, and I give you a you could do usually work out what people's incentives are. I think the timing of this is very interesting. Look at when the whole YouTube is CV argument really took off. It was in late twenty twenty four.
Ian Whittaker:And really, I think there's a very strong reason for that. First of all, if you actually take what's been happening on YouTube's advertising growth over the past several years, the growth rate has really decelerated from where it was in pre COVID days. Pre COVID days was growing, yeah, in the forties and the fifties, year on year advertising growth. If you actually look at it now, it's around the low to mid teens. Probably will be around again 14% maybe for 2025.
Ian Whittaker:Now that's a very good growth rate, certainly compared with TV, but obviously it's decelerated from where it was before. And actually we compare the YouTube advertising growth rate with, for example, that of Google search, YouTube's advertising growth rate is only one to two percentage points above Google search, and that's been the case for the past couple of years. So there's definitely been a deceleration of growth that's come through. And also as well, when you look at it, the deceleration matches very closely to the rise of TikTok in international markets. Now we don't know.
Ian Whittaker:We know the ByteDance numbers because there are numbers for for that. We don't know exactly what TikTok's international revenues are, but certainly from the reporting from the likes of Bloomberg and Wall Street Journal, it would imply that in you're probably looking for 2025. You're probably looking at, TikTok overtaking YouTube advertising revenues, and potentially by a significant amount. Yeah. You could be looking at a gap anywhere between 10 to $15,000,000,000, if some of the reporting is correct.
Ian Whittaker:And that gap seems to be just expanding wider and wider. So I think for YouTube, another issue why they want TV advertising money and why this debate has kicked off is quite frankly, when it comes to the social media market, you know, from what competes together from news sources, it looks as though YouTube is losing share in particular to TikTok. And therefore, if YouTube wants to accelerate its revenue growth rate, it's got two options. One is it can actually grow its subscriber revenue growth rate and it's been doing that very successfully. Although again, if you look at the back end of 2024, there was a quarter there where essentially that growth really decelerated and I think that may have also prompted the YouTube is TV advertising growth argument.
Ian Whittaker:But also as well, you need essentially to take a new part of advertising money. Advertising money is still very much siloed. People still look at it, particularly in both the advertisers and the agency space, apart for digital, apart for TV. If you look at the 2024 YouTube advertising revenues, they were around $36,000,000,000 globally. That's a large amount.
Ian Whittaker:TV, though, was around a $170,000,000,000. If YouTube can actually take a sizable proportion of that TV advertising money, it can reignite its growth. And the easiest way, because advertising money is against those siloed, and that's the way that people think about it, is to get YouTube inserted into the pot of TV advertising money. And that's fundamentally why we're seeing this debate. Sure.
Ian Whittaker:There might be an argument about content creators, and it might be the whole debate that people are saying, well, what are people watching and how are they watching YouTube? As far as YouTube's concerned, those are means to an end. Okay? You know, they're not the fundamental goal here. The fundamental goal is to take a sizable chunk of the TV advertising money.
Ian Whittaker:And to go back to the question before as to how broadcasters think about this, this really is the central point that broadcasters need to realize that for all the nice words and all the nice tone, this is the fight for advertising money. And in this case, we all like to think we can expand the pie and maybe it will to a a small degree, but it's really about taking share.
Dan Fahy:Got you. And any final thoughts on what broadcasters, streamers, content owners can do to better navigate this mess, this fog that's around YouTube at the moment?
Ian Whittaker:Well, I think the first thing is to have a clear plan and clear strategy, and that involves actually working out what is the core competency of a broadcaster and also as well YouTube where that fits into the sort of the role. For me, the core competency of a broadcaster is to produce video content that appeals to a mass market audience. Yeah. Usually professionally generated content, but it doesn't necessarily have to be so. Think about broadcasters, what has been their core strength?
Ian Whittaker:Yet they have seventy, eighty years of experience of working out what sells to a mass market audience and why that is appealing to advertisers. That's the way they should think about things. I think the problem for the broadcasters at the moment is that still there's still a lot of mindset of television broadcasting equals thirty minute shows in a particular format. Sure. We can stream them, but, you you know, it it sort of that's the mentality that still very much goes on.
Ian Whittaker:I think what broadcasters need to realize is that, actually, if you think about your core competency competency in that wider context, then actually that opens up the possibility of you actually showing a lot more content. For example, why is it broadcasters can't get into short form content? Disney plus said this last week, but it's something I've been saying for the past several years. A lot of the clips that you see in terms of short form are from professionally generated content, news clips, sports clips. Even DIY is something where broadcasters produce content in that area.
Ian Whittaker:So there's a lot more that broadcasters should be doing around their content. I think Oswaldo as well, they should look a lot more at the kids market because again, going back to this point before I said, the share argument is becoming increasingly important and an easy win for broadcasters is to actually attract more kids onto their platform. Again, there's a question mark over advertising. But still, I would argue what TF one's doing in France, trying to make it the YouTube of France. That's ultimately where broadcasters want to go and say, look, why can't we show music content?
Ian Whittaker:Because music, again, is likely be a large percentage of YouTube viewing. In fact, again, if you work together, the sort of comments that have come from YouTube's music ad, You can see that in the advertising numbers. You can see that in the revenue numbers as well. And so I think what sort of broadcasters ultimately need to get to is the goal of thinking we become the ultimate destination, yet in terms of video content that appeals to a mass market audience. Doesn't necessarily mean it needs to come out of a production studio.
Ian Whittaker:You can also as well and again, something that I've been saying, you can co op content creators as well. Because ultimately, as mister beast says, the YouTube economics don't work. For many content creators, television still remains the ultimate goal. So ultimately, what you want to do, I think if you're a broadcaster, is start to think, we need to think like YouTube. We need to be that ultimate destination for content in many different realms.
Ian Whittaker:And the broadcasters have a big advantage because they can produce that professionally generated content that YouTube's economic model won't allow it to do. And where that therefore means sort of where they fit YouTube sits within their strategy, my view of it is that essentially they should look at YouTube as a stepping stone. You you don't want to become too reliant on it. You need to realize as a broadcaster that they're actually after you're advertising money. You also need to recognize as well that provide by providing content, you are feeding their audience share, which is enabling them to go back and say, we have this audience share, we therefore should get this amount of advertising money.
Ian Whittaker:But in the short term, use them, but the long term ultimate goal should be to get people to watch your content on your platform. And you'd there's probably gonna need to be cooperation for that between various broadcasters at the back end level. I mean, yeah, in Europe, for example, could you see the the the sort of emergence of national sort of domains, you know, could you see things on the programmatic side? Absolutely. There's many things on on the back end where I think creative cooperation makes sense.
Ian Whittaker:But, ultimately, what the broadcasters need to be thinking of is we want to get viewers on their own platforms. And, you've got your content. If you're a broadcaster, it's your content. What you want is a 100% revenues for that content. You don't wanna be sharing that with somebody else.
Ian Whittaker:Mhmm. And particularly somebody else who said at the end of the day, you know, we could talk about this, my you know, in nice terms and so forth, but, ultimately it's after you're you're advertising money.
Dan Fahy:Slight change of tack here now. There are people who are earlier in their careers than you and I. What practical tips might you have for people who are making their way in media today, who are early or mid career, given the ambiguity that seems to be around the industry?
Ian Whittaker:I think the general obviously mean you can't acknowledge, but I would argue in this sort of environment, you know, what's key is flexibility. And flexibility comes from your areas like, for example, always keep a good social network going. Yep. Social skills, I think, will become increasingly important. Creativity, I think will become increasingly important in this sort of environment.
Ian Whittaker:Think about the things that aren't predictable, can't be replaced by AI, because at the end of day, AI is going to replace certain types of jobs. The things that AI will find most difficult most difficult to do is creative, further moment thinking that isn't so predictable. Now that's very, very hard to put in this career plan as to what people would do. And I would argue what it probably means more is people need to think more about their soft skills rather than necessarily needing to know about their hard skills. The hard skills are obviously, you know, important.
Ian Whittaker:You need to know the job. But, yeah, I think increasingly that will be seen as a given. What will be the differentiator between people when it comes to jobs? It's more the softer skills, how they interact. Can they think laterally?
Ian Whittaker:Yeah, can they think in different ways. I'll give you an example from banking. You know, thirty years ago, when I I was looking at investment banking jobs in The UK, the sort of subject that the investment banks are most commonly hired from in terms of degrees. At that time, the most commonly degree held by sort of people who are hired was classics, and then it was followed by history. And actually, if you follow if you did business studies, that was seen as a negative.
Ian Whittaker:And the the rationale that the bank used was to say, look, the actual is hard knowledge. We can teach somebody in a training program. That's fine. But, actually, the reason why we go for people who do classics and history is because of the way they think, the way they approach a problem, the way they look at something, and then they break it down and come with a solution on things. And I think that's not to say that suddenly everyone should rush and do a classics to a history degree, but it is to say that I think what we're gonna get is we're gonna get things circling around.
Ian Whittaker:That I think that if you look at where careers have been very much focused on over the past year, twenty, thirty years, certainly twenty years, there's been more about the sort of efficiency, hard knowledge. Go off and do coding, go on and learn Python, yeah. Well, look at that now. Increasingly, it looks like that knowledge can be replaced by AI. You can do that work for a fraction of the cost and work twenty four hours.
Ian Whittaker:The softer skills, though, the way that you think about the problem, the way that you approach it, the way that you look at it, the way that you communicate with people, you know, the way that you reach solution that quite frankly AI would never even think of. I think those things are gonna be more and more important. So I would say don't get yourself fixated and say my lifetime career will be x. Think about it more as saying, what are the sort of skills that you can build up that you will make more flexible, that when change does occur, you can actually take advantage of it.
Dan Fahy:Fantastic. Ian Whitaker, thank you very much for your generosity, insights, and your time as well.
Ian Whittaker:No problem, Dan. Thanks very much for having me. That
Dan Fahy:was Ian Whitaker. Thanks for listening. I'm Dan Fay. The original music in this podcast was by Lee Bracevere and So Cow. And if you think a colleague or friend would enjoy this episode, please pass it on.