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The rise of YouTube: Uploading many a dream to world's largest OTT

Google's YouTube has created an ecosystem that transcends entertainment, information or education

Satya Raghavan, director, YouTube content partnerships, India
Satya Raghavan, director, YouTube content partnerships, India, says YouTube has moved from being the most entertaining place to being the most useful
Vanita Kohli-Khandekar New Delhi
6 min read Last Updated : Jun 11 2021 | 6:10 AM IST
Rachna Ranade refused to budge. She had just uploaded a 90-minute video to YouTube – the first of the series Basics of Stock Market for Beginners. When friends advised her to edit it for length, instinctively, she resisted. Instead, the Pune-based chartered accountant, who was teaching at over half a dozen colleges, among other places, in February 2019, told her students to watch the video to prepare for a viva.

She expected 8,000-10,000 students to watch it. Within the first three months 25,000 people did. By September 2019, she hit 100,000 subscribers. “People are alright with long form. It depends on what you have to say,” says Ranade.

By December, she became a full-time creator and now has over 2.5 million subscribers on YouTube to watch some of the free videos. To access a complete course or hear her on a host of financial subjects, you have to register on Rachnaranade.com and pay anywhere between Rs 4,000 and Rs 10,000. Roughly half of the 100,000 registrants on her site pay.

Ranade is among thousands of YouTube creators who found success by serving a real need for knowledge. She is also an example that Satya Raghavan, director, YouTube content partnerships, India, points to frequently and deliberately. The emphasis is on YouTube’s role in creating an ecosystem that transcends entertainment, information, education or plain time-pass. “Video is the entry point to the internet in India, so YouTube becomes the first point of contact with any Google brand,” says Raghavan.

That puts YouTube, India’s (and the world’s) largest over-the-top (OTT) platform, in a piquant position.

“In 2020, YouTube outperformed the Google business,” says Kia Ling Teoh, senior analyst, TV and video advertising for UK-based Omdia. Of Google’s $147 billion advertising revenues in 2020, YouTube brought in $20 billion, pitching it directly against the $25 billion Netflix. On sheer numbers, YouTube is the world’s largest OTT player with over 2 billion users. On revenues, Netflix, with 210 million paying subscribers, is the biggest.

In February this year, when Google declared its numbers, 468 million Indians used the internet to watch video, listen to music, read news or socialise, among other things, says Comscore India data. The bulk of these, 440 million, used YouTube. That is more than two times as much as the next OTT – Times Group’s MX Player.

Media Partners Asia estimates YouTube’s revenues at Rs 4,000 crore in calendar 2020. So on value, it is bigger than Kalanithi Maran’s Sun Network and over half of Zee. If you add parent Google to the maths, then YouTube is part of India’s second-largest media firm. “We see YouTube as TV of sorts. The YouTube masthead is as dominating as a full page ad,” says Shrikant Shenoy, general manager, Lodestar UM, a media buying agency.

YouTube, however, consistently plays down the entertainment angle in its growth, choosing to point out instead to the ecosystem it has created. “We have moved from being the most entertaining place to being the most useful,” says Raghavan.

Over a decade back, when major broadcast or entertainment firms entered online, YouTube was their first destination. Now most have their own OTT brands. Yet, “we are not a competitor. Broadcasters still upload and look at us from the windowing (the lag between the first/second/third release of fresh content) or promotional lens. We look at them through a partner lens”, says Raghavan.

Think of YouTube as the world’s largest auditorium where anyone can come and showcase a talent, information or anything else, and if it works, like it did for Bhuvan Bam, Village Food Factory or Ranade, make money from it.

The gateway to the internet

And that brings this to the first point about YouTube – its focus on the ‘creator economy’ to drive advertising revenues across geographies, genres, devices, audiences or any other variable you can think of. “Globally there are two things driving Google’s performance, search and YouTube advertising,” points out Vivek Couto, executive director, Media Partners Asia.


He adds, “Unlike rivals, it has a tighter synergy with (parent) Google, it is a monetisation metric. Over the last 6-10 years YouTube has invested a lot in product innovation. This helps in ad formats, content delivery. YouTube has led with the lowest CPMs (cost per thousand or mille).”

Lodestar UM estimates that the cost of advertising on YouTube is 75 per cent more than other digital brands, but is 35 per cent less than broadcast TV. “CPMs are very market driven,” is all Raghavan says.

Globally, Google rarely shares any numbers on YouTube. And there is no break-up of its revenues. The bulk of it still comes from advertising. To change that the firm has introduced all sorts of other revenue streams -- subscription for its music and some videos, member fees that creators like Ranade charge for special episodes which are split with YouTube. Many of these other streams are rising, says Couto. This is possible because of the focus on a broader more all-encompassing ecosystem.

That brings it to the second point about the YouTube machine. “The streaming market has two ecosystems. The one with YouTube, TikTok et al and the other with premium video players such as Disney, Netflix and Amazon Prime Video,” explains Couto.

Media Partners estimates that 58 million Indians subscribed to OTT in 2020, up from 12 million in 2018. That then knocks off the premium audience completely from YouTube or services like it, pushing it further into the free ecosystem where competition could be Taka Tak, Moj or Dangal TV. And in this market, “you don’t know what kind of consumer you are getting. Anyone with a smart phone is on digital. At this (mass market) end, TV does the job (better)”, says Shenoy.

Raghavan doesn’t agree. “The needs of a consumer are no longer homogenous. The premium consumer may be watching 50 other things on YouTube. A large number of YouTube consumers watch catch-up TV, movies, music, web series. As a consumer, we have ceased to be the person who is entertained only by a soap,” he points out. For instance, a single person wanting to cook with the two ingredients or another one wanting to install a telescope among millions of others go to YouTube. It offers content across a spectrum of needs -- entertainment and news are just a few of them.

 “The YouTube business model has redefined the business model in the entertainment space. It is not just about videos but also the creator,” says Raghavan, pointing to Ranade and her ilk. All media companies find audiences and monetise them. YouTube has simply scaled it to another level.

Topics :GoogleYouTubeOTT platformsEntertainment industry growthYouTuberYouTube channelYouTube videosYouTube VLOGGERSonline streamingDisney IndiaHotstarAmazon Prime VideoNetflix

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