Thirteen-year-old Nico Young may be the future of home entertainment, at least that’s the bet YouTube is making.
“Pretty much when I get home, I just sit myself down in front of my computer and I go on YouTube,” Young says.
Nico follows “channels” much like the way most of us follow TV shows, such as "Mad Men" and "Homeland." And Nico’s behavior has YouTube betting that online videos are going to be the “third wave” of home entertainment, says Malik Ducard is the director of content partnerships for Entertainment at YouTube.
“You had in the '80s broadcast, there were three to four to five networks,” Ducard says. “Then you move into the '80s, early '90s and you have cable channels. We see a third-wave where online is able to deliver content to audiences.”
Nico's favorite YouTubers? The Mystery Guitar Man, a musician and video maker whose “channel” on YouTube has two million subscribers. He’s from Brazil but lives in America. And Glozell, whose fan base is ‘tweens and young teens. And if you’re not one, her appeal is hard to understand.
Take "The Cinnamon Challenge" video she made, which got 22 million hits on YouTube. In it, she swallows a cupful of powdered cinnamon and the results are predictable. She coughs and sputters around her kitchen trying to get a glass of water.
“I like her because she’s so over-the-top,” Nico says.
Glozell’s channel has 720,000 subscribers, who are mostly young and racially diverse like Nico.
YouTube has plowed $300 million into funding original content, or channels, in order to create consistent programming that’ll attract advertisers.
It’s a long-term bet, says Brad Adgate, research analyst at Horizon Media. He notes that traditional TV will bring in $70 billion in ad revenues this year while online videos will bring in only $3 billion.
Not exactly a close race, but Adgate says if YouTube can keep up its momentum, that could change. He notes that the median age of the audiences who watch TV networks CBS and ABC is over 50.
By contrast, nearly half of YouTube’s 128 million users in the U.S. are 35-and-under and people of color. Adgate says most mainstream broadcasters have had trouble bringing in that group.
“Some of these YouTube channels have been very successful in putting on content that’s appealing to various ethnic segments of the population,” Adgate says.
And according to some estimates, this group of minorities will be the "majority" in the U.S. by 2050. And so, YouTube’s made funding channels by people of color one of its priorities. It’s funding big stars like African-American hip-hop mogul Russell Simmons. But it's also looking to less-famous content creators, selling advertising for Glozell’s channel and funding the production of Asian-American channel YOMYOMF and the sitcom “Misadventures of Awkward Black Girl,” which already had a loyal fan-base on YouTube.
Issa Rae, the the creator of “Misadventures of Awkward Black Girl,” says YouTube is taking a different approach than mainstream TV.
“When you do have a show of color, it’s like specifically geared towards what they think is a monolithic group of people and that’s just very, very much annoying,” Rae says about mainstream TV.
But she says on the web, notions of race and “racial sensibilities” are fluid.
“I do love this sense of humor that’s embodied within shows like 'Curb [Your Enthusiasm]' and 'Seinfeld' and 'Parks and Rec', 'The Office,'” Rae said. “I didn’t really see any people of color in these shows.”
And so Rae created a sitcom on YouTube. In it, Rae plays “Jay” -- and like Seinfeld, she find herself in awkward positions we can all relate to. In the first episode, Rae is driving along -- hard-core rapping -- when a guy from work drives up next to her.
“What’s the protocol for repeatedly running into somebody at a stop sign?” Jay asks as she pretends to talk on the phone to avoid her colleague. “And how many fake laughs are acceptable?”
Today, Rae has 92,000 subscribers and her series appeals to a diverse audience.
“I think that YouTube and online videos shows are great because it allows the people in between and the people at the bottom of the totem pole to say, this is what’s popular: pay attention,” Rae says.
And network television is paying attention. Thanks to Rae’s success on YouTube, she was recently picked up by ABC to co-produce and write the new sitcom “I Hate L.A. Dudes.”