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a be­hind-the-scenes look at her TV pro­gram, drives one of Youtube’s top chan­nels, thanks to high­lights from her talk show. Katy Perry’s sixyear-old “Fire­work” video is edg­ing in on a bil­lion views, and her up­com­ing live-streamed al­bum-re­lease spe­cial will seek to ex­pand upon the spec­tac­u­lar view-counts for her great­est hits.

Part of Youtube’s ap­peal to main­stream cre­ators is its adop­tion by a gen­er­a­tion of view­ers for whom Youtube, Ama­zon, and Net­flix are the new ABC, CBS, and NBC. As James Cor­den ex­plained at the Brand­cast, what makes The Late Late Show work was his epiphany that the pro­gram could be di­vided into highly share­able, fun-size en­ter­tain­ment. “I re­al­ized that I didn’t have to make a show for any time slot, be­cause we had the in­ter­net,” he told the au­di­ence. “And more than that, we had Youtube.”

Cor­den does this as adroitly as any­one: Adele’s ap­pear­ance on his “Car­pool Karaoke” bit, fea­tur­ing her ren­di­tions of Spice Girls and Nicki Mi­naj songs, was Youtube’s most vi­ral video of 2016, with more than 155 mil­lion views. (By com­par­i­son, his TV show has av­er­aged 1.34 mil­lion view­ers in its 12:37 a.m. time slot this sea­son.) In fact, the late-night wars, the hottest time-slot com­pe­ti­tion in tele­vi­sion, are now ef­fec­tively be­ing waged on Youtube. Clips from Cor­den, Jimmy Fal­lon, Jimmy Kim­mel, and Stephen Col­bert have been viewed more than 16 bil­lion times in ag­gre­gate, ac­cord­ing to video-tech­nol­ogy com­pany Zefr.

This new re­al­ity helped in­spire Youtube TV, a $35-a-month stream­ing ser­vice for phones, tablets, PCS, and TVS that of­fers more than 40 live broad­cast and cable chan­nels from the me­dia com­pa­nies be­hind ABC, CBS, Fox, and NBC, the same stuff you might be watch­ing on Com­cast if you weren’t pe­rus­ing Youtube videos. Wo­j­ci­cki un­veiled Youtube TV last Fe­bru­ary at an event at the Los An­ge­les pro­duc­tion stu­dios that it built for cre­ators, lo­cated in a 40,000-square-foot for­mer Hughes Air­craft plant that still has a he­li­copter parked out­side the front door. “There’s no ques­tion that mil­len­ni­als love great TV con­tent,” she says, tee­ing up the an­nounce­ment be­fore a grid of 36 screens that cy­cle through clips of such main­stays as Mod­ern Fam­ily, Keep­ing Up With the Kar­dashi­ans, and col­lege bas­ket­ball. “But what we’ve seen is they don’t want to watch it in the tra­di­tional set­ting. They don’t want to watch it sit­ting in the liv­ing room with their fam­i­lies, wait­ing for their fa­vorite show to come on. Younger gen­er­a­tions want to con­sume TV the way they’re used to con­sum­ing TV con­tent on­line.” In other words: They want to watch it like Youtube.

When Wo­j­ci­cki and two of her lieu­tenants—prod­uct chief Neal Mo­han and Robert Kyncl, the for­mer Net­flix ex­ec­u­tive who has over­seen Youtube’s con­tent and busi­ness op­er­a­tions since 2010—spell out the de­tails of the ser­vice at the event, they don’t ad­dress why Youtube doesn’t have deals with Time Warner (CNN, TBS, and so forth) and Vi­a­com (MTV, Com­edy Cen­tral). Later, Kyncl says that re-cre­at­ing a cable lineup sim­ply was not a pri­or­ity. “Our con­tent of­fer­ing isn’t as com­plete as the one you can get with your cable or satel­lite sub­scrip­tion,” he cheer­fully con­cedes when I speak with him in his of­fice, a mini mu­seum of me­dia his­tory fea­tur­ing such ar­ti­facts as a vin­tage an­nouncer’s mi­cro­phone, Bea­t­les LPS, and Snap Spec­ta­cles. “We think that the older gen­er­a­tion will grav­i­tate to­ward their tra­di­tional way of sub­scrib­ing to TV, and the younger au­di­ence will be happy with the of­fer­ing that we have. That’s my the­sis. We’ll see what ends up be­ing the truth.”

Youtube TV launched in April in five cities (New York, Los An­ge­les, Chicago, San Fran­cisco, and Philadel­phia), en­ter­ing an in­creas­ingly crowded mar­ket of sub-$70, cable Tv–like ser­vices de­liv­ered via the in­ter­net. AT&T/DI­RECTV, Hulu, Sling, and Sony Playsta­tion have only slight vari­a­tions in chan­nel lineup and pric­ing—and ru­mors per­sist that Ap­ple will soon join the com­pe­ti­tion. Youtube hopes to dif­fer­en­ti­ate it­self by cre­at­ing a bet­ter user ex­pe­ri­ence than its ri­vals’, with fea­tures like a cloud DVR with un­lim­ited stor­age and a search en­gine that’s smart enough to un­der­stand not just show ti­tles but also con­cepts such as “his­tory” and “su­per­heroes.” In its first seven days, the mo­bile data-an­a­lyt­ics com­pany App­topia re­ported that 147,300 peo­ple down­loaded the Youtube TV app, a rel­a­tively promis­ing start if they’ve ac­tu­ally gone on to sign up. (Sling, which has been in the mar­ket for two years, re­port­edly has more than 1 mil­lion sub­scribers.)

For now, Youtube TV is a solid rough draft. Al­though the ser­vice mixes con­ven­tional TV pro­gram­ming with Youtube Orig­i­nals avail­able on the Red sub­scrip­tion ser­vice, such as Lazer Team and other youth-ori­ented movies and se­ries, it’s barely be­gun to in­te­grate Youtube’s vir­tu­ally in­fi­nite cache of en­ter­tain­ment, news, and how-to in­for­ma­tion, much of which could sa­ti­ate the de­sire for any miss­ing cable chan­nels. In ad­di­tion, its ad ex­pe­ri­ence still mir­rors what you’d see on cable TV rather than tak­ing ad­van­tage of Youtube’s sig­na­ture user con­trol and va­ri­ety of com­mer­cial for­mats. In­deed, the net­works are cur­rently con­trol­ling the ads, not Youtube. “We ob­vi­ously have a lot of ex­pe­ri­ence with in­no­va­tive ad prod­ucts,” says Kyncl. “We can bring that when­ever our part­ners are ready.” Wo­j­ci­cki points out that Youtube it­self re­flects more than a decade of learn­ing and tech­no­log­i­cal ad­vances. Youtube TV just needs time to de­velop.

Ask Wo­j­ci­cki about Youtube’s at­ti­tude to­ward mon­e­tiz­ing its busi­ness, and she sounds like a startup founder. “We’re fo­cused on get­ting the users to Youtube and happy with the ex­pe­ri­ence, and keep­ing that grow­ing, with the be­lief that the ad­ver­tis­ing will con­tinue to come,” she says. “Be­cause ad­ver­tis­ers go where the users are.”

Given her cen­tral role in bol­ster­ing Google’s over­all ad rev­enue, though, she has put a lot of ef­fort into mak­ing ads both more ef­fec­tive for mar­keters and ap­peal­ing to users. That’s in­cluded a mi­gra­tion away from for­mats that feel like, well, TV com­mer­cials in fa­vor of ad units that are unique to Youtube, in­clud­ing sixsec­ond “bumper” spots. “It’s amaz­ing the way you can tell a brand story in a short amount of time,” Wo­j­ci­cki says. The ser­vice plans to phase out un­skip­pable 30-sec­ond ads by 2018. These moves rep­re­sent yet an­other chap­ter in Youtube’s his­tory of ad in­no­va­tion, which be­gan in 2010 when the com­pany started to let view­ers by­pass many spots af­ter the first five sec­onds and only charge ad­ver­tis­ers when some­one didn’t fast-for­ward.

No Youtube ad ini­tia­tive has been more im­por­tant to the com­pany than Google Pre­ferred. Launched in the spring

“This is where the growth is,” says Wo­j­ci­cki. “It’s where the next gen­er­a­tion wants to be.”

of 2014, three months af­ter Wo­j­ci­cki’s ar­rival as CEO, the pro­gram al­lows com­pa­nies to tar­get ads to the top 5% of Youtube videos in cat­e­gories such as beauty and fash­ion, mu­sic, and com­edy, based on a pro­pri­etary al­go­rithm in­volv­ing to­tal au­di­ence and pas­sion level among view­ers. It’s en­gi­neered to give big mar­keters brand-safe con­tent that speaks, es­pe­cially, to 18- to 34-yearolds, al­low­ing Youtube to com­pete for TV dol­lars (and charge more like net­works too).

Thanks to Google Pre­ferred, dur­ing last year’s up­fronts—the ad-buy­ing sea­son when net­works presold $18.6 bil­lion worth of com­mer­cials— Youtube was able to “ne­go­ti­ate side by side with the TV net­works rather than be­ing dealt with af­ter the TV dis­cus­sions were done,” says Tara Walpert Levy, Google’s VP of agency and me­dia so­lu­tions. “That speaks to the break­down of the si­los be­tween TV and [dig­i­tal] video.”

This ero­sion of boundaries has im­pli­ca­tions for the en­tire ad­ver­tis­ing in­dus­try. As 2016’s up­fronts ap­proached, me­dia-buy­ing firm Magna Global, part of ad­ver­tis­ing gi­ant IPG, agreed to spend $250 mil­lion of its clients’ money over five quar­ters on Youtube ads. “The ini­tial re­ac­tion was one of dis­be­lief on the part of some of our TV part­ners,” re­calls David Cohen, Magna’s CEO for North Amer­ica. “They thought it was ne­go­ti­a­tion [tac­tics] as op­posed to real and sub­stan­tive. When we went to the up­fronts and ac­tu­ally had less money to spend, it was clear. It made net­works hun­grier for the busi­ness.”

That was 2016.

The 2017 up­fronts took place less than three months af­ter Youtube’s ad-po­si­tion­ing woes be­gan, re­mind­ing mar­keters that em­brac­ing Youtube isn’t as sim­ple as shift­ing dol­lars from one bud­get line to an­other. Google Pre­ferred was de­signed specif­i­cally to shield ad­ver­tis­ers from con­tro­versy, and yet a rene­gade cre­ator like Pewdiepie—the Youtube su­per­star whose failed com­edy sketch fea­tur­ing two guys car­ry­ing a sign that read DEATH TO ALL JEWS ini­ti­ated the trou­ble—presents risks that sim­ply don’t ex­ist on con­ven­tional TV. That said, the ad busi­ness over­all ap­pre­ci­ates that Youtube is nei­ther an­ti­sep­tic nor bland. Mar­keters pro­mot­ing an R-rated hor­ror film, for in­stance, are far less skit­tish about the con­tent ac­com­pa­ny­ing their ad than the mar­keter of baby sham­poo. In fact, Rob Nor­man, chief dig­i­tal of­fi­cer at Groupm, the world’s largest me­dia buyer, says that he doesn’t know of any in­stances of movie stu­dios—among the big­gest spenders for both Youtube and TV ad­ver­tis­ing—pulling cam­paigns in the wake of the dustup.

Al­though net­works such as Fox and NBC have pub­licly trashed Youtube and its ri­val Face­book as be­ing too risky for TV dol­lars, there are signs of re­cov­ery: Magna CEO Cohen notes that “the vast ma­jor­ity of clients that had paused Google ac­tiv­ity are now back and live.” John­son & John­son, one of the high­est-pro­file brands to have side­lined its Youtube cam­paigns, is re­turn­ing to Google Pre­ferred. Just as im­por­tant, it also grabbed the spon­sor­ship of Best.cover.ever., a new Youtube singing com­pe­ti­tion hosted by Lu­dacris and cre­ated by Ryan Seacrest’s pro­duc­tion com­pany. “We knew im­me­di­ately that we wanted to be the ex­clu­sive spon­sor,” Jeff B. Smith, North Amer­ica com­pany group chair­man, says in a state­ment to Fast Com­pany. If Ryan Seacrest–pro­duced con­tent isn’t brand­safe, noth­ing is.

The ad con­tro­versy has ob­scured a longer­run­ning, more in­tractable is­sue that Wo­j­ci­cki has yet to solve: keep­ing the ser­vice’s com­mu­nity of cre­ators happy. This con­stituency has chafed at a num­ber of real and per­ceived slights but now fears burn­ing out in the ef­fort to keep pace with the Hol­ly­wood tal­ent it’s in­creas­ingly com­pet­ing against for view­ers’ (and Youtube’s) at­ten­tion.

The com­pany “wants longer videos, more videos, more fre­quency,” says Jim Loud­er­back, a part­ner at the VC firm So­cial Starts and for­mer CEO of stream­ing TV net­work Re­vi­sion3. Youtube’s al­go­rithm is re­ward­ing that kind of con­tent, par­tic­u­larly if view­ers re­spond to it. Con­se­quently, some high-pro­file Youtu­bers fret that the ser­vice is turn­ing against them. Last De­cem­ber, Matthew Pa­trick, whose gam­ing chan­nel has more than 8 mil­lion sub­scribers, fun­neled his angst into—ap­pro­pri­ately enough— a Youtube video. “Prac­ti­cally none of Youtube’s or­gan­i­cally grown cre­ators can stay on this tread­mill 365 days a year,” he said in a voiceover. “But you know who can? Large com­pa­nies with hun­dreds of em­ploy­ees who are al­ready used to 24-hour news cy­cles.” While he spoke, an an­i­ma­tion showed Youtu­bers tum­bling off a tread­mill while an­thro­po­mor­phized lo­gos for To­day, Ellen, The Late Show, and The Tonight Show jogged gamely on­ward.

Youtube’s artis­tic com­mu­nity has long grum­bled about the com­pany tak­ing a re­puted 45% of rev­enue from ads placed on their videos. Now, as the com­pany fid­dles with the levers on its plat­form to re­duce the chances of ads show­ing up where mar­keters don’t want them to, some good­c­i­t­i­zen video up­load­ers, from news com­men­ta­tors to wrestling fans, have seen their views and rev­enue fluc­tu­ate wildly—an ef­fect they de­scribe as the “ad­poca­lypse.”

“It’s been tough for the cre­ators, too,” Wo­j­ci­cki ac­knowl­edges. While she isn’t budg­ing on Youtube’s share of ad rev­enue, the com­pany has greatly ex­panded its cus­tomer-ser­vice sys­tem for cre­ators, with email sup­port avail­able to all and ded­i­cated phone reps for those with 100,000-plus sub­scribers. A new fea­ture called Com­mu­nity now al­lows cre­ators to share items other than videos—such as text, GIFS, and polls—with their fans. Wo­j­ci­cki has also ex­panded Youtube’s global net­work of lav­ishly equipped pro­duc­tion fa­cil­i­ties. There are cur­rently nine of them, known as Youtube Spa­ces, lo­cated in cities from L.A. to Mum­bai, In­dia. Cre­ators with at least 10,000 sub­scribers (who num­ber in the hun­dreds of thou­sands) have free ac­cess to sound­stages, edit­ing work­sta­tions, 360-de­gree cam­eras—ev­ery­thing they need to ramp up the am­bi­tion and pro­duc­tion values of their videos.

Youtube has grown so per­va­sive and fa­mil­iar that it’s easy to lose sight of the unique value at its core. Burnie Burns, co­founder of Austin-based Rooster Teeth, which pro­duced the Youtube orig­i­nal sci-fi com­edy Lazer Team and its up­com­ing se­quel, still re­mem­bers be­ing dumb­struck al­most a decade ago by what the ser­vice of­fered: “They com­pletely changed the game in terms of the abil­ity to mon­e­tize video with pre-roll ad­ver­tis­ing. That did not ex­ist ear­lier.”

“You have all these peo­ple whin­ing and com­plain­ing,” adds a cap­pella singer Pe­ter Hol­lens, who per­forms pop­u­lar ren­di­tions of songs, from “The Sound of Si­lence” to “Let It Go,” in har­mony with other Youtu­bers or mul­ti­ple record­ings of him­self. “When in the his­tory of mankind have you been able to have free world­wide mar­ket­ing on a plat­form?” Not to men­tion distri­bu­tion, host­ing, and pro­mo­tion. Hol­lens isn’t ut­terly de­pen­dent on Youtube ads for his liveli­hood: Fans make on­go­ing pledges to pay for his videos via crowd­fund­ing plat­form Pa­treon, which he calls “a quin­tes­sen­tial part of my growth in­come.” But with­out Youtube, he would never have built the fol­low­ing that sup­ports him there. (Pa­treon was it­self co­founded in 2013 by Jack Conte, a pop­u­lar Youtube mu­si­cian who strug­gled to make a liv­ing purely through ad rev­enue; Fan Fund­ing, Youtube’s own do­na­tion fea­ture, floun­dered and was re­cently re­placed by a new at­tempt called Su­per Chat.)

Wo­j­ci­cki in­sists that she wants to hear what’s on cre­ators’ minds, even when they’re dis­grun­tled, and no mat­ter what the venue. Some­times they reach out to her di­rectly on Twit­ter; some­times one of her kids will watch a video, en­counter a gripe, and re­lay it. A day be­fore Brand­cast, she held a sum­mit for cre­ators in New York. “We have to run this del­i­cate ecosys­tem be­tween the view­ers, the cre­ators, and ad­ver­tis­ers,” she says. When I visit her of­fice at Google’s Google­plex head­quar­ters in Moun­tain View, Cal­i­for­nia (where she works one day a week and re­ally does have a moun­tain view), Wo­j­ci­cki doesn’t start our con­ver­sa­tion with her per­spec­tive on cre­ators or mar­keters. Rather, she proudly shows me a small sculp­ture that her 9-year-old daugh­ter made for her. Fash­ioned from Tinker­toys and card­board, the in­spi­ra­tional art­work is em­bla­zoned with slo­gans such as “Fair­ness is for every­one,” “Don’t go back­ward, go for­ward,” and, at the top, “I see the fu­ture in your eyes.” High ex­pec­ta­tions fol­low her wher­ever she goes.

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