Did YouTube Lose the Shorts War Back in 2021?
Spoiler alert: maybe
Earlier this year, Alphabet announced record-breaking earnings, yet their stock still took a hit. The reason for this conundrum was their expected profit for YouTube was not achieved. This was largely due to YouTube shorts underperforming. Despite the market leaving a massive opening for YouTube to grab, its Shorts content has failed both with YouTube fans and within the general market. One question that lies in the mind of many investors is: How and when did this happen? The answer is mishandling goals in 2021, when YouTube Shorts was released.
A Look at the Opportunity
Earlier this year, President Biden and the United States Congress passed a bill that mandated that short-form content giant TikTok either be sold to American investors within a year or face a ban in the United States. TikTok is the undisputed leader in the short-form content war, easily well ahead of its two main competitors, Alphabet’s YouTube Shorts and Meta’s Instagram Reels, to the point that these two apps largely competed for a distant second place.
This is not the first national ban from a crucial market for TikTok. Back in 2021, India banned TikTok, which didn’t change ByteDance’s (TikTok’s owners) market strength one bit. By analyzing what happened in India back in 2021, we can predict what could end up happening in the United States within the coming year should the bill not be reversed.
What Happened
After an initial tussle, the Indian market stuck with Instagram Reels. Previously, both apps were the target of mockery from the youth. Reels was seen as the strongest competitor to take over the TikTok market gap when push came to shove. Partially, this was due to the fact that Reels’ algorithm seemed to more easily adapt to the Indian market, but it also was due to a critical error that guaranteed to sink YouTube Shorts from its very inception; its ties to the YouTube Algorithm.
The YouTube Algorithm
There are two algorithms that everyone who works with internet content should know and understand: Google and its search engine optimization and YouTube’s algorithm. Of the two, YouTube’s algorithm is considered more nebulous. Entire channels and methods have been created to understand the ever-shifting winds of the YouTube algorithm, a mysterious force that can give millions and take everything away at any given instance. While its exact method is unknown and ever-shifting, the YouTube algorithm seems to have prioritized watch-time for the better half of a decade. This switch practically killed certain types of YouTube videos and revitalized others. Subscriptions were considered vital, and the watch-time was for channels rather than for individual videos.
This was the system that YouTube Shorts was added to. Adding YouTube Shorts to the main YouTube seemed like a no-brainer decision. You have the most popular video platform in the world, and adding your short content to it just seemed like common sense. After all, integrating Reels with Instagram was crucial to Reels’ quick explosion. As a result, YouTube added an extra element to the algorithm, using YouTube Shorts. In fact, a minimum amount of shorts was now required prior to channel monetization, in addition to viewer retention and channel watch-time.
The issue was this pulled YouTube channels in two directions. To maintain a high channel watch-time, the average YouTube video’s length had increased to the point that multi-hour video essays became commonplace. Last December, Hbomberguy’s 4-hour essay on YouTube plagiarism set the platform alight, becoming a massive hit unlike many other videos and opening the doors for other long video essays, such as Jenny Nicholson’s equally long essay on Disneyland’s Star Wars hotel.
Additionally, since viewer retention was critical, channels became incentivized to space out uploads, maintaining a delicate balance between the number of videos and how frequently they are uploaded. Most channels had stuck into a manageable video length of 20-50 minutes to retain viewers across multiple videos.
Now, throw a requirement for short-form videos into this mix and push them hard, and you have a recipe for disaster. Channels had to find new viewers and subscribers through short-form videos, convince them to subscribe to their main channel, and somehow convert these short-form viewers into long-form viewers, and retain them. This process could frankly be described as convoluted and not very intuitive. It was (rightfully) parodied by YouTube channel ‘Man Carrying Thing’ as seen below.
In contrast, Instagram Reels and TikTok don’t have long-form videos on their platform. As a result, this integration problem is pretty much exclusive to YouTube, and it struggles to maintain a stable, short-format platform. This doesn’t mean there hasn’t been any success for YouTube Shorts – a few channels have made successful careers based on short-formed videos, but the Shorts features are still not well-received within the YouTube community. When YouTube tried to change its platform layout earlier this year to push its ‘Shorts’ content further, the fierce and sudden backlash forced the mega platform to back off.
What Are YouTube’s Chances?
This is definitely not a glowing review of YouTube Shorts’ potential for success, but despite the article’s title, I think YouTube still has a chance to win this short-format war. They have an existing audience that they have to avoid angering. Still, suppose they put a well-placed dividing line in the sand between short-form creators and long-form content creators (possibly with a better-developed algorithm and avoiding the pitfall of forcing creators to make both forms of content to survive on the platform). In that case, they actually garner an advantage over TikTok and Reels. For starters, YouTube’s algorithm system is considered one of the best in the world, and their brand recognition is still one of the best in the world, perhaps a little too good for success as a short platform, but that is a story for another day. For now, all they have to do is stop conflating all content as the same and forcing long-form content creators to make short-form videos, something that will prevent the natural growth of any platform. Do that, and success is within YouTube’s grasp. Hey, YouTube, if you use my suggestions, DM me to talk business!!