Cannibalisation is inevitable for YouTube as the attention economy bites
Photo: Rachit Tank
When YouTube launched Shorts in 2021, the social video platform was knowingly risking de-stabilising its core business. The rationale behind launching a short-form video offer was that the risk of not doing so could mean haemorrhaging thousands, if not millions, of viewers to TikTok. As with all defensive product launches, companies can get comfortable with cannibalisation on the grounds that disrupting yourself is better than being disrupted by rivals, because at least users stay within the ecosystem – even if the value extracted from those users could turn out to be lower.
Fast forward two years and this is where YouTube finds itself. According to press reports, staff at strategy meetings within YouTube have discussed the prospect of its long-form videos “dying out” in response to Shorts’ success. Longer video content is more valuable to YouTube because it has a higher advertising-load. However, creators are opting to make more short-form content because audience appetite for long-form videos is dwindling and brands prefer short form for product placement, according to the Financial Times story.
What YouTube is seeing is the fallout of a behaviour that stretches beyond the rise of TikTok to permeate all aspects of the entertainment industry: the attention economy. Audiences have no more available time to consume content, and are even multi-tasking between social media, streaming TV, and gaming to keep up consumption habits that were established during the pandemic. However, short-form content has managed to unlock those tiny snatches of available time that long-form could not touch: that moment of pause while the kettle is boiling, or while one is in bathroom, for example.
Creator monetisation
This growth opportunity has then been seized upon by YouTube creators. Short form began as a funnel for their long-form content or livestreaming before they discovered that Shorts was a lucrative outlet in its own right. The result was re-calibration towards making less long-form videos in favour of a mix of long and short form to remain relevant to their audiences. This has been a risk worth taking for YouTube creators because the revenue share between Shorts and long form is not drastically different at 45% to and 55%, respectively. Albeit, the earnings potential per 1,000 views on long-form is much higher.
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Find out more…In many ways, Shorts can be considered a well-executed strategy. It has provided a defensive mechanism against TikTok and ensured it has a multi-platform offer for time-poor entertainment consumers. Shorts has more than two billion users since 2021. YouTube has also managed to bounce for back from a quarterly decline in ad revenue from October 2022, to notch 4.4% growth in ad sales to $7.7 billion for the second quarter of this year.
Ultimately, YouTube needs to lean harder into its biggest advantage: being an everything app for video. Features that drive viewers to YouTube’s long-form content may need to be more prevalent in Shorts. After all, those that create successful retention strategies will be the winners of the attention economy squeeze. All entertainment apps need to give users more reasons to remain in their ecosystems. E-commerce may well be the answer for YouTube, with Shorts shopping features and affiliate marketing gaining traction.
Yet, it may even be the case that the creator monetisation offer for Shorts that is designed to turbo-charge growth and keep creators from defecting to TikTok has now served its purpose. Perhaps it is time for it to be tweaked to a sustainable level that keeps creators engaged with building audiences around long-form content as well.
The AI threat
Solving this quandary will put YouTube in good stead for the building wave of generative-AI content that will soon crash down on the platform. If Shorts’ cannibalisation is a sign that content consumption is peaking, then generative AI has the potential to exacerbate these pains even further. The difference this time is that it will not just be the platforms that feel the pain, but the creators who desperately rely on audience discovery to maintain sustainable businesses.
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