In India, its fastest growing market, YouTube has plans to invest heavily in learning and education content, roll out ‘sponsor’ buttons to a wider set of creators so viewers can pay them directly, and also make available a Snapchat like ‘Stories’ feature it announced earlier to creators.
The company’s plans were revealed at a closed-door event earlier this month in Singapore by Gautam Anand, managing director, YouTube Asia Pacific and other company executives. Many YouTube partners, investors, and publishers from South East Asia attended the event, FactorDaily has learned.
“They’re building a big team for learning and education in Mumbai,” said one of the attendees, who requested not to be named because he isn’t authorized to talk to the press about YouTube’s plans. A Google spokesperson declined to comment because the event was private.
YouTube, as per sources, has seen “huge growth” in education, learning, and do it yourself content as data access in the world’s second-largest market by internet users becomes cheaper and millions of Indians go online for the first time. The new demand, mostly from smaller towns, is coming from an “aspirational” set of users who are looking to upskill themselves, said the second source. To address this need, YouTube has plans to sponsor a “select few content creators.”
The company is also likely to launch a standalone application for this audience. “Learning is a category where serious people come to learn something, they are seeing a lot of drop off because of ads or unrelated content which is why they are thinking of launching a separate app,” said a second source, again wanting to stay anonymous.
YouTube already has standalone applications like YouTube Kids (for children under the age of 13) and YouTube Go, targeted at data-starved users.
Sponsor a Youtube creator
The other big move for YouTube in India will be the ‘sponsor’ button, which is currently being tested with a select set of creators. Users will be able to pay creators by giving them Rs 159 per month. We spotted the sponsor button on Mumbiker Nikhil’s channel. “The feature will be rolled out to a lot more creators this year,” said the source.
Sponsorship was a feature rolled out by YouTube for gaming channels to begin with. Sponsors get a badge and also custom emoji while live-chatting with creators. Their comments also get played up in the comments section. In return, creators need to promise exclusive content to sponsors.
YouTube will get a share of such sponsor revenues like it gets from all creators using and earning on its platform. One creator said creators are being offered as much as Rs 120 out of the Rs 159 that sponsors pay.
YouTube’s chief business officer Robert Kyncl who was in India earlier this month also hinted at the launch of sponsorship. In a podcast with All India Bakchod, Kyncl said that the company is “working on” bringing sponsorship to India and that one of the product managers in charge of it is coming to India “in a few weeks”.
YouTube has ramped up its efforts in India over the last five years. It hired Satya Raghavan to head the business in 2014, set up a creator studio in Mumbai in 2015, and this year, it expanded fan festivals to five cities from just one (Mumbai) last year. The company says that of the 330 million internet-connected smartphone users in India, 225 million watch YouTube on a monthly basis. The turning point for YouTube in India was the launch of Reliance Jio phone services in September 2016, which drove the price of mobile data down. “By 2020, India will have over 650 million internet users and we’re really looking forward to exciting growth in the future,” Raghavan told FactorDaily in an interview in March.
By many accounts, video consumption has boomed in India – one recent report estimates video consumption grew five-fold in 2017; Google India chief Rajan Anandan said in August last year that mobile watch time has grown 400% year-on-year. There are 135 creators on YouTube with over one million subscribers each in India. But ad spend hasn’t kept pace with the breakneck growth in video consumption. India’s digital video advertising market is likely to grow about 35% from last year to touch Rs 2,200 crore this year, according to a report by Vidooly, a video analytics firm. About half of this, estimated between Rs 900 crore and Rs 1,100 crore, was spent on YouTube.
Moreover, competition in advertising has increased. YouTube’s main threat comes from Over The Top players like Hotstar, Voot, SonyLiv, and JioPlay. “They have a lot of high-quality content which is brand facing and that’s a challenge for YouTube,” said Rahul Vengalil, the founder of What Clicks, a digital marketing audit firm (See: Adpocalypse Now! — How YouTube’s clean-up is helping India’s streaming sites).
This, in turn, means creators have seen their reach grow manifold but their revenues haven’t grown significantly. “There’s a pushback from creators,” says Vengalil, who was earlier the business head of digital agency Isobar in India. “Nowadays each video gets 100,000 views in a day. But the CPMs have gone down,” says Amit Bhawani, who runs PhoneRadar, a popular tech channel on YouTube. CPM is the cost per thousand impressions, or what a creator earns from thousand views.
This is where the sponsor button comes into play. The sponsor button will supplement creator earnings – keeping them in the YouTube ecosystem. YouTube also has a subscription product called Red, which hasn’t been launched in India yet but is slated to launch in 100 more countries. With a YouTube Red subscription, users can watch all of YouTube ads free and also stream music. Kyncl hinted that eventually Red will be launched in India as well. Indian users have shown early signs of buying into services like Hotstar, Amazon Prime and Netflix with nearly 10% of the some 120 million monthly active users being paying subscribers.
YouTube has also started testing Stories, a feature it had announced sometime November 2017, in India. The feature is live on channels like All India Bakchod and BB Ki Vines. The idea is to bring Snapchat-like Stories to YouTube, where creators can make quick, on-the-go videos. More creators will get this feature in the coming days.
“I don’t know if I’ll use Stories or seek sponsors. Stories will be seen as too much noise on YouTube and for sponsors, you need to make a deep commitment. Right now, I don’t think I can fit in another exclusive video into my schedule,” says Bhawani, who like most YouTube creators shoots, edits, and uploads videos himself.
YouTube also plans to push YouTubeGo, an app it created grounds up for markets like India where users are sensitive to the amount of data they consume (See: YouTube Go, Google’s attempt at video domination crafted in and for India). In February this year, YouTube launched its YouTubeGo in 130 countries.
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Updated at 02:20 pm on April 27, 2018 to assign a category to the story.
Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.