How YouTube became the new television

Plus, my top 10 channel recommendations

Way back in 1987, the Nobel Prize-winning economist Robert Solow famously quipped, “You can see the computer age everywhere except in the productivity statistics.” This was the productivity paradox of its day, yet it seemed to resolve itself within a decade.

By the mid-1990s, the vast impacts of technology – not least from semiconductors – began to be recognised in productivity data¹, as businesses learned to leverage the benefits of ever cheaper computational power. This represented a ‘positive supply shock’, the inverse of the oil shocks of the 1970s.

It takes time for companies to find ways of maximising any new technology, and the macroeconomic benefits are often missed at the time by the producers of official statistics. And I think a similar process is underway when it comes to how people consume entertainment and in particular, television.

While Netflix, Prime, Disney, HBO and NBCUniversal pour tens of billions of dollars annually into original content, YouTube, owned by Alphabet, does things differently. Its creators, whether bored teenagers or mega influencers (though there is increasingly a crossover), commission themselves and fund their own costs. Any advertising revenue is split, with creators receiving 55¢ for every dollar, and YouTube taking the rest.

It can be exceptionally lucrative for content creators, who earn between $4-25 per 1,000 views, depending on audience demographics, topics and so on. According to a New York Times report in 2024, YouTube paid its creators and partners $70bn in the previous three years. All while taking precious little financial risks itself. Unlike rival streaming giants, if a video bombs, so what?

For readers who still sit down to watch linear TV, brace yourselves. The Gauge, Nielsen’s monthly snapshot of total broadcast, cable and streaming consumption that occurs through a television screen, found that (among US audiences) streaming accounted for fully 43.5%. Traditional TV leads by less than a percentage point.

And the trend is unmistakeable. Streaming’s 43.5% represents its largest share to date, while total time spent watching YouTube rose 2.5% month on month, to 11.6% of total TV viewing. If your image of a YouTube video is still a grainy, 45-second clip about someone’s great aunt, I’m afraid you are 20 years out of date.

The real game changer was connected televisions. TV is now the primary device for consuming YouTube in the US, with more than one billion hours of YouTube content consumed on TVs every day. The platform has been a boon not only for independents, but also legacy media. Saturday Night Live, which recently celebrated its 50th birthday, has flourished on the platform, with its celebrity-filled, five to 10-minute skits tailor-made for YouTube.

That a majority of YouTube is watched on television is incentivising longer-form and more cinematic styles too. Whether chat shows involving celebrities eating progressively spicier chicken wings or even feature length films, YouTube is becoming television’s ‘everything store’.

But it is something of a double-edged sword. If you are the BBC, or SNL, or any production company, you can upload your content to YouTube and benefit from potentially billions of eyeballs, with the commensurate advertising income and brand building that comes from it. But ultimately, you do not own the platform. There is no guarantee that the (often younger) consumer will even realise they are watching something produced – at potentially great expense – by you. It’s all just YouTube.

This newsletter has not even gotten into YouTube Shorts, the company’s lucrative TikTok rival, or podcasts on YouTube, which claims more weekly listeners than either Spotify or Apple. Nor does it dwell on its algorithm, which drives more than 70% of the content on the platform, or the phenomenon of ‘second screening’ and content designed for people who aren’t really watching.

Instead, as an avid consumer of YouTube, I thought I’d leave you with 10 of my favourite channels. No obligation to read on, of course.

1. History Matters – short-form animated historical documentaries

2. Federer Home – *very* niche, often grainy clips from the era of peak Federer (2004-2007)

3. The Tim Traveller – ‘Travel videos for nerds’. I particularly enjoy how he says “hello” at the start of every video

   4. DennisBunnik Travels – flight reviews (seriously)

   5. David Boothroyd – where else are you going to find live coverage of the 2013 local elections?

   6. xkcd’s What If? Just nonsense questions, lovingly answered and drawn

   7. Cool Worlds – space, astronomy, exoplanets, astroengineering and the search for extraterrestrial life (often in unnecessarily tight-fitting t-shirts)

   8. Good Areas with Jarrod Kimber – in which an Australian living in London yells cogently about cricket

   9. Great books explained

   10. Wired – in particular, its ‘expert answers questions from the internet’ series

Have a lovely weekend.

1. This is a highly readable paper from the Reserve Bank of New York, ominously published around six months before the global financial crisis began