7: On ‘YouTube’ – the video bazaar

YouTube increasingly suffers from the same issue as the term ‘media’. It has become everything (video) and thus an empty term. At a content level, there is little that can be said about YouTube because it is so many different things. To be clear, this isn’t a critique of YouTube, more the noting of how frequently we talk past each other because we haven’t developed subcategories or readily acknowledged its breadth and diversity. Also, like ‘social media’, YouTube – what it is and encompasses – has changed considerably in the last two decades. Perceptions of what YouTube is reasonably vary significantly, at least in part because people use it differently, but that too is difficult to know.

The best analysis I’ve seen suggests ‘commercial YouTube’ (as in the part media makers monetize) accounts for a very small percentage of the videos it hosts (like 1%). It is clear those videos also make up a wildly disproportionate amount of viewing. But given its scale, growth in time spent with YouTube isn’t clearly a good thing for media makers distributed there.

What can be claimed of YouTube? YouTube is a massive – the most massive? – source of hosted video. It is a giant repository including (at least):

• short-form videos delivered through a strongly algorithmically driven feed experience (Shorts)
• video of all lengths made by sole-proprietor and SME corporate video media makers using it as a media monetization service. Those makers rely on YouTube as 
  • primary revenue source
  • secondary revenue source
  • source of legitimacy that supports other revenue (e.g. view/engagement metrics)
• vast resource of hobbyist (non-commercially motivated) and commercially aspirant video
• secondary distributor of video created under licensed dynamics
• video bulletin board for sharing video with a specific audience (family; school board meetings)

* And for a short decade an unsuccessful dabbler in commissioned originals

YouTube is an enormous, multi-faceted, multi-national repository of hosted and licensed video (it hosts, but also hosts video licensed by others). Of course YouTube attracts more attention than any other distributor – there is nothing that offers remotely the same library or such an effective way to search.

YouTube (circa 2020s) has achieved this status because it is an effective distributor; it is an infrastructure (see McGrady). Its infrastructure supports a giant video bazaar offering the goods of independent craftspeople, national chain stores, and global conglomerates. And let’s be clear, YouTube attracting more and more attention is good for YouTube, but not necessarily good for the media makers it hosts.

Given its scale and diversity that make it impossible to make claims about the content on YouTube, the most useful way to approach YouTube is by foregrounding the limited declarative truths about its business model.

• It is not a licensor of video (in which licensing is defined as a paid contractual arrangement, neither the Standard YouTube ‘license’ or Creative Commons ‘license’ meets the standard of remunerated use typica of the term in media industries).
• It is a hosted video service with a moderately transparent mechanism (it’s a low bar) for remunerating video makers for the attention attracted by the videos they create (55% of ad revenue for YouTube Partners). YouTube does not (June 2025) have a strong mechanism for facilitating direct consumer funding of videos. [Yes, consumer payment options such as memberships are developing but there is as-yet little evidence of this being significant for media makers, especially given YouTube takes 30% of payment.]
• It only offers video (though McGrady et al estimate 15% of videos are just a still image and 40% are music).

That’s not a lot, but it is helpful for placing it relative to the broader media ecosystem. There is nothing like it (in Western media) – the archival library depth clearly differentiates it from others.

Understanding YouTube
The scale of attention attracted by YouTube videos should not surprise us. It is largely ‘free’ to the media maker and viewer. It hosts an amazingly vast array of video content and is decently effective in surfacing what users seek. It has a straightforward and comparatively generous (still a low bar) revenue sharing program with creators, and its wide use makes it a launching pad for many others.

In understanding why it is so different from others and can be argued as an infrastructure, we must appreciate the economics and what its business model makes possible, as well as the fact that model could change at any time because hosted video isn’t based on contracts as licensed video is. Sharing 55% of revenue with top creators has enabled an extraordinary expansion of available video and video-making businesses, breaking the bottleneck of what could be ‘done on TV’. To be clear, it wasn’t only the opinions of ‘network gatekeepers’ that constrained video content flow through their decisions but the budgetary limits of distributors as commissioners in taking on risk. The consequence of that change is to put media makers in a position where they shoulder risk. Some may ultimately succeed that wouldn’t have in a licensed system (success = establish a revenue sustainable enterprise). Many will try and fail; they will be out of pocket for costs and time but have had an opportunity to try the market.

Licensed video operated with a strategy of intentional overproduction: commissioners knew much of what they developed would not succeed, but the peculiar risk of media industries – in an environment of scarcity – warranted overproduction. As an infrastructure, YouTube effectively offers ‘intentional overcirculation’ and bears the hosting costs of a great amount of video that delivers no revenue. It effectively subsidizes considerable hobbyist and commercially aspirant video that adds value for users. This is a cost of YouTube’s strategy. While data is scarce, Evan Shapiro’s collaboration with Tubefilter suggests an extraordinary number of YouTube videos reach very small audiences – 90% of channels account for only 6.1% of views in their study. That is an extraordinary skew; far from a long tail, that is a cliff, not a tail. McGrady et al estimate nearly 4.88% are never watched, 4.44% a single view, 18.38% fewer than five, 65.44% fewer than a hundred, and 86.93% fewer than a thousand (p21).

YouTube has no risk exposure in developing content in the manner of licensed video businesses; yet it takes nearly half the advertising revenue delivered by its most popular content and takes all the advertising revenue from less popular content. That is an extraordinary model (yes, I've used that word three times). Not only does it lack content-spend risk, but it takes nearly half to all of ad revenue generated by everything it hosts. Yes, the infrastructure has costs. There is technology, hosting, advertising, but YouTube is more media infrastructure – akin to cable/system – than a ‘channel’. Please don’t compare it to distribution businesses involved in content licensing and commissioning. [I’d love to know what percentage of YouTube’s ad revenue isn’t shared revenue, in other words, revenue that derives from videos ineligible for revenue sharing.]

At the same time YouTube makes access to and distribution of video possible – something with notable social value, its revenue share is arguably unethical. It is a paradox.

YouTube is a media distributor, perhaps the most significant that has existed. It is an incredible advancement from multichannel cable or satellite systems (also infrastructures) in terms of breadth of offer, but crucially, only accomplishes that because of makers’ willingness to bear all risk. As a distributor, it will always have lower costs than a licensing distributor.

Also crucial, there remains a universe of valued video content that cannot, will not, be created for YouTube (caveats below). Most scripted fiction and much high-quality journalism relies on levels of funding that cannot be fronted by hosted video distribution. YouTube can and already does distribute this type of content, but it is often as a secondary distributor. It does not seem that makers’ costs of such content can be supported exclusively by YouTube earnings or the brand deals useful for personalities. There will always be alternatives to YouTube because there are users that want such content, though that business may be narrower than before and focused on very micro markets (with Netflix filling the gap in between).

Exuberance about ‘YouTube’ must not lose sight of the fact that it does not make content when making comparisons to other media companies that pay those who make content.

YouTube may not threaten spectacular and highly professionalized content (content requiring a lot of skill specialization and funding levels that can't be borne by makers) as a direct competitor. But it is reshaping the ecosystem, and I worry the abundance of fragmention (driven also by FAST) limits the ability to maintain licensed/commissioned media making. The scale of that spectacular and highly professionalized sector has and will continue to contract; I do worry about its future existence.

As we build understanding of the evolving ecosystem, we must not lose sight of costs and risks of media making. YouTube is an amazing development in that ecosystem, but there are limits to its business model. The capacity of its vast bazaar and not-yet-enshitified user experience (Doctorow) may erode. The present may not predict the future.

I do wonder whether scale becomes a liability at some point. While YouTube can keep adding attention, that attention gets splits across more and more videos in a way that diminishes the scale of individual media makers. Does it stop being searchable/is discovery compromised? So much else has fallen prey to what Ed Zitron has brilliantly identified as the ‘rot economy’ – what happens when ad load becomes too annoying; the inevitable push to add subscription fees happens and those fees become too high in the endless pursuit of growth? What are the implications of the US Google monopoly case penalties? YouTube does not have meaningful competition; that rarely ends well for consumers and media makers will be casualties as well.