Democratization of content creation outpaces ability to monetize
Unprecedented access to low-cost content creation and distribution has blurred the lines between “amateur” and “professional” creators. However, despite broader access to creation and distribution, research shows that the top 3% most viewed channels on YouTube account for 85% of all views, indicating that ad-based monetization models predicated upon discoverability and engagement remain out of reach for the long tail of creators.
Top creators will continue to benefit from ad-based models as well as subscription models and licencing opportunities. To sustainably integrate the long tail of creators, distributors will experiment with new monetization models, such as merchandising and micro-donations, and new discovery models, such as algorithmic feeds independent of social graphs.
Key trends and proof points
Niche content finds a global audience
- Local phenomena find a global stage: Greater access to international audiences through digital channels allowed Korean pop group BTS to break a global virtual attendance record with their Bang Bang Con concert in June, selling +750K tickets to fans across 107 countries.
- Global platforms breaking down barriers for virality: Average daily YouTube video uploads with “At Home” in the title grew 700% in the second half of March while views grew 210%, highlighting the potential for individual creators to find success through broader access to production and distribution.
We are in a golden age of creativity with more outlets for distribution than ever before. At YouTube, when our creators succeed, we succeed. We can deliver value for advertisers and share that revenue with our creative community to everyone’s benefit.—Robert Kyncl, Chief Business Officer, YouTube, USA
User-generated content (UGC) becoming a mainstream marketing tool
- Official marketing campaigns leverage UGC: In the UK, ITV launched “The People’s Ad Break”, in which well-known ad campaigns were re-created by viewers at home. The campaign outperformed the original ads on key metrics, such as brand recall.
- Smaller creators getting a larger cut: The number of marketing campaigns using creators with fewer than 100,000 followers increased +300% from 2016 to 2019, indicating that monetization opportunities exist for smaller creators.
- UGC driving greater authenticity: 86% of consumers say that authenticity is important when deciding which brands they support and consumers are three times more likely to say that content created by a consumer is authentic compared to content created by a brand.
Stakes around unchecked content get higher
- Fine line between pluralism and tribalism: As media organizations are increasingly expected to take stances on social issues, many have become split along political and demographic lines, driving polarization that is accentuated by existing social platforms with insular social graphs and new platforms, such as “free speech” social network Parler, that have emerged to serve tribal audiences.
- Weaponization of UGC: The authenticity and reach of UGC is being weaponized to sway public opinion around contentious issues, while the metrics and algorithms that drive UGC recommendations are drawing scrutiny from government actors.