YouTube Is Swallowing TV Whole, and It’s Coming for the Sitcom

Creators are making longer shows to meet viewers where they are: increasingly, in front of their TVs.

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Episode Transcript

Speaker 1 (00:00):
YouTube is swallowing TV whole and It's coming for the
sitcom by Lucas Shaw read by Mark Lee. For two decades,
YouTube has tried to convince advertisers that it's the future
of entertainment. The pitch has always been simple enough. Young
people don't watch cable, they watch YouTube. It doesn't exactly

(00:21):
require a PowerPoint presentation. But YouTube has had problems making
its case. The first is that the vast majority of
videos on the site aren't filmed to Scorsese like standards.
The biggest knock against creator content is that it's slow quality,
sh crap, slop, garbage. Doug Shapiro, a former executive at

(00:41):
Time Warner Road, in December that's sort of inconsequential, he argued,
since most people aren't watching random YouTube slop, they're watching
the most popular slop, which leads to YouTube's second issue.
The most watched channels haven't always been hospitable to advertisers.
To name a few high profile examples, f K s
Kelberg aka Pawudiepie, a Swedish YouTuber known for his gaming content,

(01:04):
made anti Semitic jokes in videos in twenty sixteen and
twenty seventeen and was later accused of inspiring white nationalist
shooting rampages. Logan Paul, who posted gaming and prank videos
before sending to influencer wrestler status, filmed a video in
twenty seventeen with a dead body in a Japanese suicide forest.
In twenty twenty, Jason Ethier aka Jaystation, a Canadian YouTuber

(01:28):
known for videos such as Running from the Cops and
twenty four hour Overnight Challenge in Jail, tried to gain
followers by pretending its girlfriend and fellow YouTuber Alexia Morano
had been killed by a drunk driver. Marketers don't have
to worry about this kind of stuff on say NBC.
All three creators apologized, and YouTube ultimately took down that

(01:48):
Jaystation channel for violating its terms of service. In a video,
Morano said she never agreed to the hoax and was
sick to her stomach about it. To attract those advertising dollars,
YouTube set about trying to boost the quality of videos
on the site. In twenty eleven, it announced plans to
invest one hundred million dollars in original programming. The funds

(02:10):
went to dozens of channels from popular creators such as
Philip DeFranco, a pop culture commentator who currently has more
than six point six million followers, and Felicia Day, an
actress best known for the web series The Guild, which
was based on her life as a gamer. Four years later,
YouTube backed a smaller number of prestige shows to drive
viewers to YouTube Bread, an ill fated attempt to compete

(02:33):
with Netflix Inc. In subscription video. The company hired Suzanne Daniels,
a longtime Hollywood executive who developed Dawson's Creek and Buffy
the Vampire Slayer, to oversee this late which included Cobra Kai,
which takes place about thirty years after the Karate Kid saga,
and beginning in twenty seventeen, YouTube started funding dozens of
ad supported original series that it offered for free, such

(02:56):
as Kevin Hart What the Fit, in which the comedian
works out with celebrities including Conan O'Brien, DJ Khaled, and
Rebel Wilson. Not much found a huge audience. Daniel's biggest
discovery was a young writer named Quinta Brunson, who created Broke,
a comedy about three friends who moved from Philadelphia to
Los Angeles. The show lasted just one season, but Brunton

(03:18):
went on to create Abed Elementary, a hit for ABC.
YouTube gradually wound down its originals' efforts and allowed Sony
Groupcorps TV Studio, which produced an own Cobra Kai, to
shop the rights for future seasons. The show became a
huge hit for Netflix. Daniels left in twenty twenty two.
YouTube had more success cleaning up its existing catalog, promoting

(03:40):
stars it prayed wouldn't do dumb stuff. It built tools
to monitor the site for things such as Japanese suicide forests,
and ran marketing campaigns to boost the cultural relevance of
major creators, hoping that billboards of Eliza Koshi and Actress
from Houston or Smash a sketch comedy improv Collective would
make advertisers think of them as movies. New programs like

(04:02):
Companies target ads of the top one percent of videos
by viewership. YouTube channels such as Mister Beast Good, Mythical Mourning,
co Workers reveal their searchers to read to each other,
and First We Feast, the home of wing eating talk
show phenomenon. Hot Ones grew so popular that even if
some advertisers didn't see the service as premium, most viewers

(04:22):
didn't care. The site became too dominant not to be
a major part of advertisers media plans and their video strategy,
says David Capanelli, President Global Investment at Horizon Media, Inc.
Which buys a lot of YouTube ads. Even as advertisers
spend more money on YouTube, executives at parent company Google
thought it should be securing ads from marquee brands whose

(04:44):
large checks were instead going to TV networks. YouTube still
made most of its money from low cost commercials targeted
at niche audiences, and many advertisers still thought their commercials
didn't have the same impact when they appear next to
YouTube's cheaper, shorter videos, most of whi which were viewed
on phones or laptops. YouTube spent the past few years

(05:04):
trying to make itself the centerpiece of the living room.
The company teamed up with TV manufacturers, so watching YouTube
on a TV became as easy as watching it on
your phone or laptop. People can now leave commons and
subscribe to YouTube channels on a TV, and creators can
arrange videos as though they are episodes of a show.
YouTube will remind viewers where they left off with a

(05:25):
program and feed them the next episode, rather than have
the algorithm offer a similar video, often from another creator.
YouTube also tailored its advertising for TV viewing, creating more
space between ad breaks. The company introduced pause ads, which
show commercials when it viewer stops a video, and it
introduced a live TV service, YouTube TV, that includes the

(05:48):
channels and a cable bundle, crucially the ones that show
the NFL, as well as a storefront that offers page
streaming services such as Max and Paramount Plus. YouTube is
now the TV service of choice for viewers of all ages.
People in the US spend more time watching YouTube on
a TV than on a phone or computer, according to
the company. Not including YouTube TV, the service accounted for

(06:11):
over twelve percent of TV viewing in April, more than
all of Walt Disney cost TV networks and streaming services combined.
According to Nielsen, about forty percent of viewers are age
eighteen to forty nine, the demographic most appealing to advertisers.
Nielsen reported, when people turn on the TV, they turn
on YouTube, says YouTube chief executive officer Neo Mohan. While

(06:34):
linear TV ad sales have flatlined, YouTube has more than
doubled its ad sales over the last five years, from
fifteen billion dollars in twenty nineteen the thirty six billion
dollars in twenty twenty four. According to earnings reports, YouTube
now generates more sales from advertising than all four broadcast
networks combined. Hollywood executives still try to portray YouTube as

(06:56):
a slop fest. In a recent public appearance, flix Code
chief executive officer Ted Sarandos said YouTube is a place
people kill time, whereas his service is a place where
people spend time. But these comments now wreak more of
fear than confidence. As much as Hollywood has worried about
labor strife, artificial intelligence, and the demise of moviegoing, the

(07:18):
rise of YouTube is a much more immediate and real threat.
To understand how YouTube has evolved past its awkward struggle
with original programming to become the singular destination for creators
and advertisers, it helps to know the name Alan Chicken Chow.
YouTube's biggest creators have been doubling or tripling the length
of their videos for longer viewing sessions optimized on larger screens.

(07:40):
Of course, longer videos also create more opportunities for advertising.
Some are just recording longer podcasts. People such as Chow,
though one for making YouTube shorts which are three minutes
or less to making the sitcom length Alan's Universe. The
show has its DNA and classic American tween series such
as Boy Meets World, a coming of age ninety sitcom,

(08:02):
the South Korean high school drama Boys Over Flowers, which
ran for one season in two thousand and nine and
became a cultural phenomenon in Asia and Japanese anime Alan's
Universe started drawing millions of viewers in twenty twenty three.
Chao is the showrunner and main character, while his college
friend Chelsea Sick co stars as a frequent love interest
and occasional rival. The stories aren't serialized, but every episode

(08:26):
features the same cast of characters at the same fictional school.
Chow begins writing each episode by coming up with the title,
such as no One Knew I was a Famous singer.
If a conceit works, he repeats it with a twist.
We are really intentional about creating stuff that even a
year from now, you could watch it and get the
same amount of viewer interest, he says. In January, he

(08:47):
posted no One Knows I'm a Famous pop Star. The
two videos have over eighty two million views combined. A
recent episode, Boys Versus Girls Control the School has more
than sixty two million views and is on track to
become the show's most watched episode. As the title suggests,
Choo and Sick lead their respective genders in a battle

(09:08):
to be named president of their school. After many public
and covert efforts as sabotage one another, they fall in love.
Growing up in Dallas, Chow had dreams of creating his
own sitcom. The son of immigrant parents, Chicken means strong
willed in Cantonese. He devoured Hannah Montana and George Lopez.
He attended the University of Southern California, majoring in screenwriting

(09:30):
and business administration, and first pursued Hollywood as an actor,
booking guest roles on TV series including Grey's Anatomy. Yet
he was more interested in creating his own projects than
enacting in someone else's. He joined Reach, a club at
USC for students who wanted to be social media creators,
and started posting to TikTok and YouTube and twenty nineteen.

(09:52):
In early twenty twenty three, Chow suffered an existential crisis.
He was by then the world's most popular creator of shorts,
he'd amass tens of millions of followers with goofy comedy
clips and couple goals Gone Too Far Over six hundred
and sixty four million views, Choo shows his partner that
lengshill go to to please her. He exchanges his hoodie

(10:13):
for her sports bra when she stains it and makes
a lecherous stranger grab us behind. After the stranger slaps her,
a demonically distorted version of My Heart Will Go On
from Titanic plays in the background. In Zombie Fan Fix
Be Like more than five hundred and fifty four million views,
he plays a zombie hunter who falls in love with
an undead woman with a taste for arms. He realizes

(10:36):
the key to his happiness is buying her a mouthguard.
But Choo wanted to tell stories that would influence kids
the way sitcoms had affected him. Four years after starting
his YouTube channel, he renamed it Alan's Universe and turned
it into the home of his new scripted drama. He
still made shorts, but they now exist within Alan's Universe.

(10:56):
Last July, Chow converted a drab office space in burn Bank,
California into the Allen's Universe studio The makeup room is
a former office on the second floor, down the hall
from a locker room. The ground floor features the basic
settings of a teenager's life, a bedroom, a school cafeteria,
and a small area that can be manipulated into whatever

(11:17):
is required, such as a catwalk for a dance off.
Wires and cables run along the ground between the rooms,
just asking for someone to trip. Everything is whatever you
want it to be, Chow says during an interview from
a conference room that's doubled as a school's principal office.
Boys Versus Girls, which clocks in at twenty six minutes,
will feel very familiar to any fan of Mean Girls

(11:39):
or high school musical, minus the super quick cuts and
neon editing effects. The key to its huge audience may
be that, while scripted, the vibe of the show comes
off as organic to the platform in a way that
Cobra Kai perhaps did not. Allan's universe speaks a language
familiar to teens and tweens who grew up on YouTube,
a demographic for whom the youth brands of Yesteryear, Comedy Central, MTV, Nickelodeon,

(12:03):
Mean Little, Disney Channel and Nickelodeon have surrendered more than
ninety percent of their primetime audience over the past decade.
Disney Channel averaged about one hundred and ten thousand viewers
last year in primetime, down from about two million and
twenty fourteen. There is no Disney Channel anymore as we
used to know it, says Chow. The seven to fourteen

(12:24):
year olds that used to watch Disney Channel now watch YouTube.
Disney's own YouTube channels are top performers with kids, who
also engage with its characters through Disney plus theme parks,
et cetera. Choo is one of several creators having successful
with scripted shows for younger audiences. Dar Man's channel has
over twenty five million subscribers and features wholesome, uplifting stories.

(12:46):
His videos often have to do with bullying. There's Amish
girl bullied in public school and kids make fun of
boy with autism they instantly regret it, which is Man's
most watched with more than sixty seven million views. In
the twenty eight minute video about an Amish girl named
Greta who is experiencing newfound freedoms on her room Springer,
she quickly becomes a pariah for not knowing how to

(13:08):
turn on a computer. And trying to talk to a
vending machine. Just as she's had enough of the insults
and prepares to return to the traditional life on the farm,
one of the bullies has an about face and gets
her to stay. She finds a boyfriend they form a band.
Darm Man Studios uploads four or five half hour episodes
of original programming per week, appealing to a core audience

(13:30):
of thirteen to twenty four year olds. Man got to
start posting inspirational messages on Facebook while helping his wife
run a beauty business. He now oversees one of the
largest scripted programming businesses on YouTube. Man has commandeered three
sound stages in Burbank that house dozens of sets, including malls, apartments,
high schools, and a pawnshop. Thanks to a business that

(13:53):
generates tens of millions of dollars a year in ad sales,
he now has a staff of nearly two hundred. Content
the ma make some sort of a positive difference in
the world, he says, is key for virality. If YouTube
has its way, it'll be the place people come to
to watch shorts, podcasts, nursery rhymes, the NFL, other streaming services,

(14:13):
and thirty minute shows that are made for YouTube Right now,
scripted series are just one table and an endless buffet
of videos. While Chow and Man were both at YouTube's
annual presentation to advertisers earlier this month, neither one appeared
on stage that hallowed promotional ground was reserved for bigger
stars such as Mister Beast, Sean Evans, the host of

(14:35):
Hot Ones, NFL commissioner Roger Goodell, and Lady Gaga. But
Chow's and Man's successes help illustrate a world in which
the distinction between YouTube and Hollywood is eroding. In moving
to scripted shows, Chow and Man are thriving where many
others have failed. Save for a handful of popular web
series such as Fred, a comedy created by Lucas Krushenk

(14:57):
about a boy named Fred Figelhorn, and Red Versus Blue,
a first person shooter parody, scripted programming on YouTube has
faced challenges. Most viewers don't open the app for a
specific channel. They're fed videos based on their previous viewing
or stumble upon links online. Then they pick what to
watch based on a videos title and thumbnail image. It's

(15:17):
hard to distill the essence of a scripted show in
a few words, the way Mister Beasts can with I
survive the five deadliest places on Earth. But the biggest
issue is cost. Making a scripted series is more expensive
than even the most elaborate unscripted program. Game of Thrones
or Severance costs as much as twenty million dollars an episode.
Mister Beast reo named Jimmy Donaldson spends about three million

(15:41):
to four million dollars per video, more than just about
any creator on YouTube. Few channels generate the ad revenue
to make the math work. The budget for Allen's Universe,
about one hundred and twenty thousand dollars in episode, amounts
to roughly six percent of Jennifer Aniston's fee for an
episode of The Morning Show. Still, it's only a matter
of time before scripted shows become as big as Mister

(16:04):
Beast or Say Dude, Perfect five Buddies who got famous
perfecting the art of the trick shot and now have
over sixty one million subscribers, says Sean Atkins, a veteran
media executive who joined Man's company as CEO last year.
AI will only make it easier and cheaper for creators
to produce shows that look expensive and appeal more to adults.

(16:25):
Will there be YouTube's Game of Thrones? It's one hundred
percent going to happen, Atkins says, will it be one
hundred million dollars an episode? No quality is the other issue.
YouTube No longer has to convince advertisers that it's a
safe place to spend money, but it's still trying to
convince Hollywood and Madison Avenue that the slopfest days are

(16:45):
in their rear view mirror. Even with operations that resemble
proto Hollywood studios and budgets around one hundred thousand dollars
in episode, Advertisers consider Chow's and Man's videos less valuable
than those of a network sitcom. Man, for example, gets
paid twenty five percent as much as a broadcast show
per viewer and must share forty five percent of VAT
sales with the YouTube, which is better than the arrangement

(17:08):
on other platforms. YouTube's top priority is getting more brands
to see their future is with YouTube. He says. The
lower budgets haven't stopped Amazon, Prime Video, Disney Plus, and
Netflix from licensing the work of hit YouTube creators. There's
Coco Melon, the wildly popular nursery Rhyme and children's song
channel Miss Rachel, which is dedicated to toddler learning and Sidemen,

(17:32):
where the hosts compared two hundred and twenty thousand dollars vacations.
Hollywood Studios and other investors are also looking to buy
into or acquire major YouTube channels. The Dude Perfect Dudes
raised more than one hundred million dollars last year from
investment firm High Mount Capital and open an eighty thousand
square foot studio in Frisco, Texas. They're using the money

(17:53):
to increase output, make more videos that don't feature themselves
or trick shots, and open a family entertainment complex. Mister
Beast generates more than two hundred million dollars a year
from his entertainment business, and his Feastable's chocolate business had
sales of about two hundred and fifty million dollars in
twenty twenty four. Also last year, he raised three hundred

(18:13):
million dollars at a valuation of about five billion dollars
with Alpha Wave, an investment firm. Man is working with
CoA Evolution, an investment bank affiliated with the Hollywood Talent Giant,
to roll up other YouTube channels under his umbrella. Investment
will only accelerate as money follows eyeballs. According to Nielsen,

(18:34):
an average of more than seven million people in the
US are watching YouTube on a TV at any given
point in time, more than those watching Netflix and Amazon
Prime Video, combined, with the fastest growing audience being viewers
sixty five and over. In addition to the more than
thirty billion dollars in ad sales, YouTube now generates almost
twenty billion dollars from subscriptions. YouTube may eclipse Disney's media

(18:58):
business in total revenue as soon as this year, according
to research for Moffatt Nathanson LLC, which dubbed YouTube the
new King of all media. YouTube is still sensitive to
the idea that programs born on the service are inferior
to those born on say, Netflix or ABC, and the
company has spent millions of dollars on advertising campaigns to

(19:18):
help shows such as Hot Ones compete for Emmy Awards.
It hasn't won one yet. The amount of money you
spend on the show doesn't equate to quality, says Mohan.
It might equate to some antiquated notion of production value.
I would put a lot of our creator led, studio
generated content against what used to be considered traditional content.
Many advertisers and Hollywood moguls would beg to differ. It

(19:41):
seems inevitable. They won't for long