YouTube’s CES Keynote: Four Reasons Why Digital Video Will Win the Decade

YouTube’s CES Keynote: Four Reasons Why Digital Video Will Win the Decade

Robert Kyncl, the Chief Business Officer at YouTube, gave a keynote speech at CES 2016 yesterday. Video marketers will want to make the time to watch all 57 minutes and 36 seconds of “Robert Kyncl, YouTube – Keynote 2016,” which was uploaded to the CES channel today.

Now, I realize that urging you to carve almost an hour out of your busy schedule seems like I’m asking you to make an enormous investment of time. But, trust me, Kyncl delivers the kind of strategic insights, critical data, tactical advice, and latest trends in the digital video marketing business that will give you a colossal return on that investment.

After watching the video above, I asked Michelle Slavich, the head of Entertainment Communications at YouTube, for a transcript of Kyncl’s keynote. You will find it below. Now, I haven’t made that kind of request since I managed to get a copy of John Green’s keynote address at VidCon 2015. So, I thought Kyncil’s keynote contains insightful analysis and interesting information that is beyond obvious.

Nevertheless, after watching Kyncl’s keynote, you may also want to read the transcript below – because you’ll want to read them again and again as you chart a course from now to 2020.

The only things missing in the transcript below are the unscripted remarks of Scooter Braun, founder of SB Projects, Nick Woodman, CEO of GoPro, and Chris Milk, CEO of Vrse, who Kyncl invited on stage to share their stories.

Robert Kyncl’s CES Speech Transcript: 4 Reasons Digital Video Will Win the Decade

Thank you. It’s an honor to be back delivering a keynote here at CES, especially just one day after my former boss Reed Hastings. The last time I was here was in 2012. I had been at YouTube just a little over a year.And I really wanted to impress all of you, so I did what a lot of executives do at CES: I made a few predictions.

I said that by 2020, 90 percent of all internet traffic was going to be video traffic.

I talked about Michelle Phan, a young girl who had a makeup channel on YouTube that was drawing a ton of viewers and told you that she would be a major success.

And I also said that by 2020, 75 percent of all video people watched in the US was going to be transmitted through the internet.

So how did I do?

First, internet traffic. Cisco predicts that video will actually reach around 90 percent of global internet traffic by 2019—so a full year ahead of schedule.

Michelle, meanwhile, grew her channel from 2 million to 7 million subscribers, launched a cosmetics line with L’Oreal, starred in a commercial for Dr. Pepper, and raised $100 million for her startup, Ipsy, valuing it at over half-a-billion dollars. So, yes, Michelle is doing quite well.

So, how about the third prediction? That 75 percent of all video will come over the internet by 2020.

Well, let’s take a look at where things stand today.

Right now, watching video—whether on TV or online—is the single most important media activity.

There are only two things we do more than watch video: sleep and work. More than five hours a day are spent watching video, and those hours fuel a $200 Billion economy, with the majority of that money coming from Pay TV subscriptions.

But, according to a brand new study by Nielsen, TV viewing actually peaked in 2009. Prior to that, TV had grown every single year for fifty years.

And more recently, the number of TV subscriptions began to decline as people started cutting the cord. In the second quarter of last year, 600,000 people cut their TV subscriptions, setting an industry record.

At the same time, digital video is exploding. Already the youngest millennials are watching more digital video than TV.

In fact, it has now overtaken social media as their top online activity.

All told, the amount of time people spend watching digital video is about an hour and fifteen minutes a day and is growing around 25 percent a year.

Let’s say things stay on this course. By 2020, that means digital video will only reach about 60 percent of the total pie, not 75, as I predicted.

But I’m still standing by my prediction. Because I don’t think digital video will grow linearly, I think it will grow exponentially. So, this being Vegas, I’m doubling down. I believe digital video will overtake TV to become the single largest way people spend their free time before the end of this decade—with YouTube being a major driver of that shift.

So, today I’m going to share with you FOUR REASONS why digital video will win the decade.

First, digital video is inherently MOBILE.

Since this is CES, I think it makes sense to start things off by talking about hardware.

You may have noticed something happening with our phones.

Every year, our screens are getting bigger, brighter and sharper. Today’s best phones can both display and record in 4K.

At the same time, our batteries are lasting longer and our data speeds are getting faster. Even the sound is getting better.

All of these trends are creating phones that are making the mobile video experience better than ever.

And app makers and publishers, from Snapchat to the New York Times are all investing in making video a core part of their experiences, accelerating mobile video consumption.

When consumers do cut cords in a big way, they’ll be cutting in favor of video experiences that they can watch or control on their phones.

The same trends are helping YouTube—the number one home for mobile video—grow faster than ever. 400 hours of video are shared on YouTube every single minute.

New research we conducted with Nielsen shows that the time 18 to 34 year olds spent on TV fell nine percent last year. Meanwhile, this same audience spent 48% more time on YouTube, with mobile viewing making up the largest source of growth.

And on YouTube, the average time people spend watching video on their mobile device is forty minutes, a gain of 50 percent year-on-year.

But there’s another powerful reason mobile video is growing fast—not only can you share it and search it, you can also choose to consume it on your own.

Think back to your own childhoods. How many of you had to compromise with your parents or your siblings when deciding what to watch in the living room? How many of you had to do that just a couple weeks ago during your holiday break?

Your kids don’t have to do that. They can go to their rooms and watch whatever shows and stars they love.

That trend is what allows something like this to happen: for the second year in a row, the most popular entertainers amongst American high schoolers weren’t film actors or musicians, they were YouTube stars.

The mobile phone is successfully changing the way we consume video into the way we consume books—you can find one on whatever interests you and consume it whenever and wherever you want.

That DIVERSITY is the second reason digital video will win the decade.

Now, that doesn’t mean there won’t be blockbusters or best-sellers, it just means fewer people will have the same favorite title or author.  And it just so happens that YouTube is the biggest library in the world.

Let’s try a thought experiment.

I want you to take yourselves back to the early days of cable TV and pretend you’re in charge of starting a new network. You want to attract an audience, but you probably don’t have that much money to invest in content.

So what do you do?

You go after a niche. You try to license, or film, some low cost content and build an audience that cares about the specific type of content you’re offering.

This is exactly how Cable got started. MTV began by airing music videos that they got for free from music labels. AMC, which used to stand for American Movie Classics, licensed old films.

The Food Network had a few single camera cooking shows. CNN aired live news, read from a desk, 24 hours a day.

And even ESPN began by showing highlights and some lesser watched sports.

Eventually, as these networks grew in size and found success, they evolved to offer original content you couldn’t find anywhere else. MTV created the Real World, AMC created Mad Men, the Food Network has Iron Chef. And HBO and Netflix also followed a similar pattern, starting with licensed content and moving into original series.

Today, YouTube finds itself at a similar inflection point.

We currently have everything early cable had to offer from sports highlights to old movies to news. We’re even hosting the State of the Union Address and Presidential debates. All of this lives on YouTube and is available worldwide, for free.

But we also have much, much more.

Because YouTube is a democratic platform, anyone can create something everyone can watch.

That openness has led to incredible content diversity. Not only do we have videos on every topic imaginable, entirely new genres of video have been born on YouTube, from vlogging, to makeup videos like the kind Michelle Phan makes, to video game walkthroughs and livestreams.

Just as cable networks evolved, we too are investing in slates of original content that we’re offering as part of our new subscription service, YouTube Red. We’re launching new original shows and movies from some of our top creators, like Lilly Singh, Rooster Teeth and PewDiePie.

Many of these creators started with nothing but a webcam and a YouTube account. And now they’re realizing their creative ambitions on a truly global stage, and have their faces on billboards all around the world. To anyone out there who wants to entertain or educate people, this is incredibly inspiring.  It’s a lot more attainable to be the next PewDiePie than the next Tom Cruise.

Now, launching a subscription service may not seem like a big deal. These days everybody is launching a video service, everybody is launching a music streaming service. But we are doing both in one.

With a YouTube Red subscription, you get all of YouTube’s great video content, ad-free. And you also unlock a premium listening experience on our brand new Music app. YouTube Music provides you an instantly personalized experience, helping you discover new artists and songs while also playing your favorites.

I mentioned that watching video is the number one way we spend our free time. But number two… is listening to music at just over four hours a day.

And this is the third reason digital video will thrive; because video is more important to music than ever.

And YouTube is major source of that music—more than half of all teenagers use us as their main way to find and listen to new artists, in large part because we have the biggest and best music library available. If an artist has a live performance, a remix, an acoustic version or an out of print track, chances are you can find it on YouTube.

But the best thing about music on YouTube is that music videos can become massive phenomena, whether they’re from established or emerging artists.

Just five days after it was released, Adele’s “Hello” became the second fastest video ever to hit 100 M views, after Psy’s “Gangnam Style.” That exposure helped propel her to the biggest first week album sales ever. And now she’s on pace to break a billion views. One billion views used to be an outlier—now we’re seeing that kind of engagement happen multiple times a year.

And while Adele showed incredible reach by a mainstream artist, Silento went from unknown artist to superstar with the success of his song “Watch Me” on YouTube. Not only did his video rack up over 550 million views, fans and celebrities uploaded their own versions dancing along to the track, bringing the total number of views to almost 1 Billion. Those videos have kept Silento on the Billboard Hot 100 for 37 weeks and led “Watch Me” to become the top trending video on YouTube in 2015.

The success of music on YouTube has made video a crucial part of music. It helps artists gain exposure, plan concerts and sell records and merchandise. And best of all, on YouTube, that promotion pays.

Rather than give away their music to radio or TV for free, artists and songwriters now earn revenue from those clips, as well as clips, covers and parodies uploaded by their fans. To date, we’ve paid over $3 billion to the music industry, and that number is growing year-on-year.

But even with the years that Adele and Silento had, perhaps no artist was savvier about their use of YouTube than Justin Bieber. And I’m thrilled to welcome the person who discovered him, SB Projects Founder Scooter Braun, up here to talk about how YouTube has been core to Justin’s success and the success of several other artists he represents.

Scooter has been praised by Time Magazine as one of the 100 Most Influential people in the world, by Fast Company as one of the 100 most creative, and just two weeks ago, The New York Times called him the defining music executive of the social media era. So please join me in welcoming Scooter Braun.


There’s one final reason why I believe digital video will grow even faster. It can provide a much, much more immersive and interactive experience than TV.

On YouTube, we made a big, early bet on 360-degree and 3D video because it is the first type of video that actually gives you a better experience on mobile than you can have on desktop or on your TV. And since we know mobile video is exploding, formats that lend themselves to mobile storytelling will grow along with them.

But for VR to be truly successful, you need four things to happen. You need the camera technology to capture video in 3D and 360, you need a storyteller who can create content using that technology, you need a device for users to view it and you need a platform on which that content can live.

At every step of the way, we’re leading this effort.

First, we’ve partnered with GoPro to create what will soon be the first commercially available 3D-360 camera on the market, Odyssey. Odyssey uses 16 GoPro cameras to capture VR video and automatically stitches it together using Google’s Jump technology.

Second, we’re putting VR cameras in our YouTube Spaces around the world and working with leading partners to encourage creators to tell richer, more immersive, more interactive stories.

Just two weeks ago, we released a brand new animated film called Special Delivery, produced by the studio behind Wallace and Gromit. With Special Delivery, your phone becomes a window to the story happening all around you. You can see different things, follow different characters, and even unlock stories within the stories. All of you can watch it but have a completely different experience.

Third, we’ve democratized perhaps the most intimidating part of the VR experience—the viewer—by creating Cardboard. For just a couple dollars, anyone can have access to a completely immersive VR experience that works with any smartphone.

If you’re a New York Times subscriber, you know this firsthand. We sent over a million cardboards to subscribers so they could watch a new Virtual Reality documentary called “The Displaced” in partnership with the visionary VR director, Chris Milk.

Over the course of “The Displaced,” you hear the stories of three child refugees, one from Ukraine, one from South Sudan and one from Syria. And with Cardboard, you could actually follow in their footsteps.

Finally, we’ve provided a place for VR content like “The Displaced” and all those awesome GoPro videos to live: YouTube. Already on Android and soon on iOS, you’ll be able to watch any video on YouTube in VR with Cardboard, making VR truly democratic and primed to grow exponentially.

Through all of these efforts, GoPro has been a fantastic partner to YouTube, helping us push the technological boundaries of what’s possible, while capturing some of the most stunning footage ever seen.

And with fellow industry partners like Vrse, we’re seeing content and technology that is helping define how to tell stories in this incredible new medium.

Today, I’m thrilled to welcome these two great partners to the stage, Nick Woodman, CEO of GoPro and Chris Milk, CEO of Vrse, to discuss how the work we’re doing together is changing the future of immersive storytelling.

[Nick and Chris take the stage for Q&A]

So these are the four reasons I see Digital Video displacing TV: it’s immersive in a way TV can never be, as I just spoke about with Nick and Chris; it’s never been more important to music, as you heard from Scooter; it’s endlessly diverse; and most importantly, it’s inherently mobile, which ties all these trends together.

Not only are these all trends that point to digital video’s success, but they’re all areas where YouTube truly shines. We offer one of the best mobile video experiences available, we have the largest and most diverse content library in the world, we are a huge force for music and for artists and we are breaking ground as the home for immersive video.

I’ve had an amazing time here on stage today, I want to thank our guests and everyone here for joining us today. And because even four years later, I still want to impress you, we’ve got free cardboards available in the back so everyone can see just how amazing this footage looks in VR.

Thank you CES!

"Onde Quando e Como eu Quiser"

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