SU­SAN WO­J­CI­CKI HAS TRANS­FORMED YOUTUBE—BUT SHE ISN’T DONE YET.

SIX WAYS THE VIDEO GI­ANT IS POISED TO DOM­I­NATE THE FU­TURE, AND FOUR THINGS THAT COULD DERAIL IT

Fast Company - - Nest Cam IQ -

What’s Work­ing 1 Youtube is ca­ter­ing to its most pas­sion­ate fan groups.

Wo­j­ci­cki has pushed the com­pany to tai­lor ser­vices for some of the most pop­u­lar ways peo­ple use Youtube, cre­at­ing ded­i­cated apps for kids, gam­ing en­thu­si­asts, and vir­tu­al­re­al­ity early adopters.

2 Youtube gen­er­ates rev­enue from more than just ad­ver­tis­ing.

Red is a pre­mium ser­vice that’s ad-free and costs $9.99 a month. Youtube of­fers Hol­ly­wood movies and TV shows to buy or rent (just like Ama­zon), and Youtube TV pro­vides 40 broad­cast and ca­ble chan­nels for $35 a month. In Oc­to­ber 2016, Google ac­quired the in­flu­encer mar­ket­ing firm Famebit to help Youtube match brands and stars.

3 Youtube is build­ing a deep slate of orig­i­nal pro­gram­ming.

Wo­j­ci­cki has qui­etly un­der­taken the most am­bi­tious con­tent ini­tia­tive in Youtube his­tory. She has funded dozens of Red Orig­i­nals, which tar­get Youtube’s core au­di­ence of teen view­ers, a mar­ket that’s been un­der­served thus far by Net­flix and Ama­zon. The pro­gram­ming is of­ten cre­ated by some of Youtube’s most suc­cess­ful pro­duc­ers and fea­tures home­grown stars.

4 Youtube is now a mo­bile­first ex­pe­ri­ence.

Wo­j­ci­cki has pushed sig­nif­i­cant user-in­ter­face en­hance­ments

de­signed with smart­phone or tablet con­sump­tion in mind, such as dou­ble tap­ping on the video to fast-for­ward and rewind 10 sec­onds and em­brac­ing ver­ti­cal video once Snapchat pop­u­lar­ized it. The re­sult: Mo­bile views now ex­ceed desk­top ones.

5 Youtube’s re­built al­go­rithms have led view­ers to watch 1 bil­lion hours of video a day.

Youtube is op­ti­mized for what it calls “watch time,” which en­com­passes what users view, how long they tune in, the length of their over­all Youtube ses­sion, and so forth. To­gether, these sig­nals help Youtube al­go­rithms de­cide which videos a user is most likely to watch shortly af­ter they’re posted and which will lead to the long­est over­all view­ing pe­riod.

6 Youtube has built a mod­ern, global stu­dio sys­tem.

Cre­ators can ac­cess full pro­duc­tion fa­cil­i­ties called Youtube Spa­ces in nine en­ter­tain­ment hubs in­clud­ing Tokyo and Toronto. Youtube en­ables HDR video and 360-de­gree audio and video, and mo­bile live-stream­ers can even broad­cast 360-de­gree video in 4K res­o­lu­tion. Wo­j­ci­cki has also made a big bet on vir­tual re­al­ity, amass­ing hun­dreds of thou­sands of im­mer­sive videos.

Needs Work 1 Youtube needs to re­build trust with ad­ver­tis­ers.

This March’s rev­e­la­tions of ad­ver­tise­ments mon­e­tar­ily sup­port­ing (and ap­pear­ing to tac­itly en­dorse) hate­ful con­tent led to a vo­cal brand back­lash. Al­though the hub­bub has qui­eted down, it’s prompted changes to how Youtube sup­ports the brands that buy spots. There will be more pres­sure to de­liver bet­ter, more trans­par­ent view­ing met­rics and to con­tinue to cre­ate tools that let mar­keters con­trol where their ads ap­pear.

2 Youtube’s re­la­tion­ship with its cre­ators re­mains fraught.

In ex­change for the re­ported 45% cut it takes from ads that run against videos, Youtube has added more tools and ser­vices, in­clud­ing hu­man sup­port, com­mu­nity mod­er­a­tion, and a non-video feed to in­ter­act with fans. But cre­ators still feel like they have trou­ble com­mu­ni­cat­ing with the com­pany. Youtube al­go­rithm ad­just­ments can rad­i­cally im­pact the pop­u­lar­ity of a chan­nel, and those changes haven’t al­ways been re­layed ef­fec­tively. The com­pany over­cor­rected in the wake of the brand-safety con­tro­versy, dec­i­mat­ing rev­enue for news and pol­i­tics pro­gram­ming.

3 Youtube’s bid for the liv­ing room re­mains elu­sive.

Wo­j­ci­cki has led two over­hauls of its TV app since tak­ing over, and she’s suc­ceeded in get­ting the likes of Com­cast to em­brace it. A year ago, she re­ported that liv­ing room watch time had dou­bled year over year, and Youtube TV’S well-re­viewed bun­dle of broad­cast and ca­ble net­works could im­prove that fur­ther. The com­pany says TV is its fastest­grow­ing screen. For the over­whelm­ing ma­jor­ity of Youtube users, though, the ser­vice re­mains a mo­bile or com­put­er­based ex­pe­ri­ence.

4 Youtube is the big­gest mu­sic streamer in the world— and that’s the prob­lem.

With an es­ti­mated 800 mil­lion peo­ple con­sum­ing mu­sic on Youtube, ac­cord­ing to a mu­sic trade or­ga­ni­za­tion, the ser­vice dwarfs Spo­tify, which has 100 mil­lion reg­is­tered users (half of whom sub­scribe). Al­though Youtube touts that it paid out more than $1 bil­lion to the mu­sic in­dus­try in 2016 (from ad­ver­tis­ing) and it’s do­ing more to spot­light emerg­ing artists on the ser­vice, over­all, mu­si­cians and la­bels com­plain that it’s not enough given Youtube’s might, es­pe­cially as Spo­tify cuts more fa­vor­able deals with the in­dus­try.

“There’s some­thing very about Youtube,” says CEO Wo­j­ci­cki, re­fer­ring to both its charms and its per­ils.

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