I've worked in television and online media. Right now, we have a show that has over 200 million views on YouTube (The Young Turks). So, I have a great vantage point on both sides of this issue. But you must be wondering, who would even ask this question. What's bigger -- YouTube or TV? Right now, it's not even close.
Television wins in a landslide. The TV networks have some enormous advantages over YouTube, but the reason I'm writing this is because these will not last. In the long run, YouTube will be larger than the networks.
Before I tell you why, let me first tell you why that should sound nuts to you. Here are television networks' current colossal advantages.
1.Built-in audience.
When you start a YouTube show, you start at square one. You have zero viewers and very little ways to get more. When you start a television show, it goes on an existing network with a built-in audience. The TV station and its steady audience have usually been around for decades. The network you're on has name recognition and tremendous marketing power. Plus, the new show usually follows another show that many, many people have already been watching. If you follow American Idol and you don't have tens of millions of people watching you, your show sucks.
2.Better ad infrastructure.
Television has already built a well-oiled advertising machine. It serves approximately eight minutes of high-cost ads per half hour. The system is in place and brings in an enormous amount of revenue without having to do anything new or different. On YouTube, you're lucky if you can run a fifteen second ad before your video without your audience flipping out. Plus, the ad model is not set in place and the online video industry is constantly trying to reinvent it and get a steady revenue model in place.
3.Media credibility.
If you're on television, you're somebody. If you're not, then you're nobody. Almost every act of a television personality is a news story. Rachel Maddow, an MSNBC anchor, once went fishing and that made headlines. That's it. She went fishing. On the other hand, if you're in the online community and you make major news they will run your name as an after-thought by the news event. If you're on TV, they run the news event as an after-thought by your name.
4.People in power watch it.
Some YouTube shows might have a large audience, but the so-called adults in the entertainment industry don't watch it. If the people in power don't watch a show, it has far less chance of getting picked up for a larger project and get economies of scale. On the other hand, people in the entertainment industry are obsessed with television. They believe it is the one and almost only source for entertainment talent in the country.
Now, what does YouTube have that can overcome all of these huge institutional advantages? Audience, talent, and most importantly, distribution. Let me explain.
Here are YouTube's advantages:
1.It's where the audience is. You cannot talk to someone under 25 who doesn't watch YouTube. For many of them, it is exclusively what they watch. Hence, it's the new television. The gathering ground. The virtual town center.
2.Endless supply of talent at very little cost. Instead of television executives picking talent (which they are notoriously bad at; the industry's batting average is horrendous), the market picks the talent. The market decides. Cheap shows sprout up, and if they win the crowd, they get bigger. Leading to an endless supply of talent that you don't have to spend a fortune developing.
3.It's worldwide. YouTube has what television networks only dream of - universal distribution. They're on almost every computer terminal in the world (and soon on TV monitors as well). Cable networks brag about their reach, "We're in 71 million homes." Whoop dee doo. YouTube is in every home.
For example, Verizon has started a whole new slate of channels that will be on many cable networks. This has pretty decent reach, but giant swaths of the country (let alone the world) won't get these channels at all. Now, where would you rather be on one of the dozens of new Verizon channels on one of the dozens of cable networks ... or on YouTube where everyone can watch you?
When I was on television, I would have been lucky to get recognized in my local market. Now, on YouTube I get recognized from London to LA. We have viewers in almost every country in the world. The industry hasn't woken up yet, but international television has already arrived. It's online.
So, it will take awhile before the advantages of the television networks are worn down. And in the short run, there is still so much more money to be made on TV. But in the long run, YouTube's strengths are too overwhelming.
Like it or not, YouTube is coming. And in the end, it will roll over the television networks and our kids will ask, "What do you mean there were only a certain number of channels on television? Why didn't people just start their own channels?" They won't understand our world at all. It reminds me of when I took my nephews to the library the other day and told them that this is where I used to do research before the internet. They were shocked at the limited world I grew up in. Kind of like when I tell them that in the old days you could only watch television on television.