It is little wonder YouTube wants in on the streaming game

YouTube’s unlikely origin story starts with online dating. One of the first ideas that founders Chad Hurley, Steve Chen and Jawed Karim came up with was a video website for people looking for love. That was scrapped in favour of home videos. Now it seems to be more interested in professional content.

You might wonder why the Google-owned platform needs TV and streaming services. User-generated content has made YouTube into one of the world’s most popular sites, with more than 2bn monthly users. That is far more than Netflix, Disney Plus and Apple TV Plus combined. It has retained its grip on young users too. Forget TikTok lip-syncing, YouTube is the most popular social platform with American teenagers according to Pew Research Center data. Plus the content is free.

TV channels and streaming services do not fit well with the company’s stated mission to “give everyone a voice and show them the world”. But the cost of giving everyone a voice has been unrelenting criticism. User-generated content leaves YouTube trying to strike an impossible balance between promoting free speech and moderating problematic content. Add to that the charge that its algorithm pushes extreme videos to users. Netflix shows may be expensive to make but at least they have not been accused of radicalising viewers.

When YouTube permits upsetting videos to stay online, it is called irresponsible. When it polices content, it is accused of over-reach.

In 2018, for example, it banned conspiracy theorist Alex Jones, saying he had violated community guidelines. Jones is known for falsely telling his followers that the 2012 Sandy Hook Elementary School shooting, in which 20 children and six adults were killed, was a hoax. For its troubles, YouTube was accused of censorship and bias by Jones’s supporters. Conservative politicians mused about the positives of breaking big tech companies apart.

YouTube has always defended both its moderation and its algorithm. It has reduced recommendations of what it deems borderline content. Annie Chen at The City University of New York and other researchers found that most extremist content on YouTube is consumed by people who sign up to particular channels. In other words, they go out looking for that sort of content. Still, the idea that YouTube fuels extremism persists.

In Like, Comment, Subscribe, a new book about YouTube due out next month, Mark Bergen explains that moderation has been difficult from the beginning. It has always been a painful job for the people paid to decide which videos should remain online, too. When YouTube took a more aggressive stance on removing videos in 2017, puppies were brought into the office to comfort staff.

More recently, it has battled disinformation on Russia’s invasion of Ukraine, as pro-Kremlin sites find ways around a ban on channels linked to Russian state media. 

Criticism is all the more galling this year because advertising on YouTube has been underwhelming. Revenue growth was less than 5 per cent in the past quarter, the slowest in two years. Advertisers are worried about recession and competition is rising, though the slowdown is also partly the result of a difficult comparison with 2021, when the pandemic drove up viewer numbers. Other social media companies have reported the same problem.

But compare YouTube with some of those other big social media companies and revenue still looks unimpressive. If YouTube has 2bn monthly users that means the revenue it made in the past quarter is equal to less than $4 per user. Meta makes almost twice that.

No wonder TV and streaming services look appealing. Taking a share of revenue would contribute to growth without adding to the strain on moderators. More than 5mn people have already signed up to a bundled YouTube TV subscription. At $64.99 a month it is expensive but offers more than 85 channels. The Wall Street Journal reports that YouTube is working on a similar channel for multiple streaming services.

Online streaming is already the most popular method by which Americans watch TV, according to Nielsen data. Not every tech company will want to share data with YouTube. But if it can pull together the increasingly confusing options available to watch shows and films online it should do very well.