Video has killed the radio star before
Video content is the fastest growing media format. This time, it’s coming for music streamers and podcasters - setting the stage for an epic battle between YouTube and Spotify.
Billionaires seemingly taking over the US government, the global economy on the verge of a full blown trade war, Germany’s general election less than three weeks away and the pendulum is swinging a bit too far to the (far) right, the EU is investigating Chinese fast-fashion retailer Shein for violating consumer protection laws and flooding European markets with flawed and partially dangerous goods (who would have thought), and DeepSeek stunned the AI world - meanwhile Softbank aims to pump $15-25 billion into OpenAI at a $340 billion dollar valuation.
What.
Is.
Going.
On?
Before our minds go into collective overdrive, let’s take a little more than three minutes to shake off some of the mental load with the help of The Buggles and their song that inspired this week’s post.
You’re welcome.
At the time when the band released its iconic song in 1979, it reflected the tectonic shift that was underway in the late 1970’s and beyond. Radio was the dominant medium of how people consumed music content. Then cable TV really took off and with it came the shift towards far more visual engagement with consumers. “Video killed the radio star” was the first ever music video to be aired on TV on August 1, 1981. The genie was out of the bottle. Music videos to complement, underscore, or elevate the respective song went from a novelty to a must-have. Songs with powerful visuals were far stickier and achieved greater commercial success than songs that were purely distributed via the radio. They also became a powerful marketing tool for artists in giving them a way to connect with audiences who wanted to look and dress like their music idols and not just listen to them. This trend went as far as artists like Michael Jackson spending millions of dollars to produce a high quality video for his song “Thriller” that resembled a Hollywood production short film more than a simple music video.
Video truly killed the radio star. And YouTube effectively democratized the entire medium.
This week, Alphabet released its quarterly earnings figures and with it an update on its video platform YouTube. YouTube’s figures are staggering - and video is about to kill the next set of stars.
The average time a person spends on YouTube daily has increased over 22% between 2019 and 2024, with no end to this trend in sight. All that activity adds up to more than 1 billion hours of YouTube content consumed on TVs daily, with over 500 hours of new video content uploaded to the platform every minute. That’s almost 21 days of content per minute. It’s this data flywheel of more content, more consumption, more money, and more content that is causing YouTube to seemingly run away with it. According to Nielsen, YouTube captured an 11.1% market share of TV usage in the United States in December last year among streaming platforms - well ahead of its competitors Netflix (8.5%), Prime Video (4.0%), Hulu (2.5%) and Disney+ (2.1%).
This brings us to the fourth quarter results. YouTube increased its global advertising revenue by 13.8% to a total of $10.47 billion, crossing the $10 billion threshold for the first time ever. For the entire year 2024, YouTube’s ad revenue came in at just over $36 billion. This is astonishing. And keep in mind that this does not include the revenue YouTube generates from subscriptions to its services (YouTube TV or YouTube Premium) or any fees it collects from content creators as a part of the revenue they generate on the platform. Adding it all up, YouTube as a whole is close to doing $60 billion in revenue annually now.
To compare: streaming giant Netflix’s total revenue currently sits at $39 billion.
YouTube is roughly 50% bigger than Netflix.
Let that sink in.
Other players have realized this trend and are pursuing video content as a catalyst for growth - or to save themselves. Either way - it’s setting the table for a very interesting competition (my friend Mishka Katkoff, founder of Deconstructor of Fun, recently posted interesting stats around all things video).
This is where Spotify comes in. The Swedish music streaming powerhouse also released earnings numbers this week. With it came some highly interesting insights.
For starters, this marks the first year of profitability for the 16-year-old company. For all of 2024, Spotify reported a net income of €1.14 billion. Revenues grew by 18.3% to €15.67 billion, with both revenues and margins expected to further accelerate in Q1 2025. Spotify’s total monthly active user base grew to 675 million, while the company added a record-high 11% of new subscribers, taking the total number of paying customers for their service to 263 million.
Even though 48% of all video content streamed in early 2024 were music videos, it’s the diverse content mix of music streaming, audiobooks, podcasts, and video that is driving Spotify’s audience and revenue growth, which also makes the platform even more attractive for advertisers going forward.
The key word in the previous sentence was, you guessed it, “video”. Earlier this year, Spotify launched a new video content creator program that compensates contributors based on the respective viewership their content garners rather than having to rely solely on ads. Today, Spotify already has 300,000 video podcasts on its platform now.
This move sets up a head to head battle between YouTube and Spotify at the intersection of music, podcasts, video, and content creators in general.
Whoever comes out on top here - podcasters that have been relying on their voices to deliver their content and grow their audiences better figure out their video content strategy quickly.
Because The Buggles have been as relevant as ever.
Video is not just coming for podcasts - it’s also affecting long form written content, such as this publication you (hopefully) enjoy. So you can help us make Technically Entertaining even better by taking our quick poll below - takes 10 seconds :)