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If you’re finding value in our Creator Economy newsletter, I encourage you to consider subscribing to The Information. It contains exclusive reporting on the most important stories in tech. Save up to $250 on your first year of access. Hello! YouTube may already be a behemoth in advertising, but a lot of the video giant’s attention lately has been on its subscription products. In fact, earlier this year YouTube leaders were considering hiring for a new role that could be in charge of all subscription products, as I reported on Monday. (A YouTube spokesperson declined to comment.) It’s not hard to see YouTube moving in this direction at some point. Current and former YouTube executives who I have spoken to in recent months, as well as other media and streaming industry executives, have said they expect YouTube will be able to grow revenue faster through subscriptions than advertising. YouTube’s ad revenue rose 14.7% last year, to $36.1 billion, nearly doubling the annual growth rate in 2023. Still, ad revenue growth relies on capturing more market share, adding new content (such as live NFL games) and increasing traffic. That’s increasingly harder to do when YouTube is already the biggest ad-supported video service. As of September, YouTube’s subscription products, which also include the cable TV-like YouTube TV and NFL Sunday Ticket, had become at least a $15 billion annual business—approaching half the size of its advertising sales last year. And in February, YouTube parent company Alphabet said YouTube Music and YouTube Premium, the ad-free version of the video service, had surpassed 125 million subscriptions, up 25% from 100 million about a year prior. Subscriptions come with their own set of challenges. It is hard to convince users to pay for a service that’s long been free. And similar to its arrangements with creators who run videos and receive a slice of the revenue from ads that run before or during the videos, YouTube has to share subscription revenue with creators, media companies and sports leagues and music labels that distribute their videos on its service. As Martin pointed out earlier this year, any gains in subscriptions could come at the expense of its ad-supported business. But as one former YouTube executive recently told me, YouTube wants users to come to its service and never leave, whether they’re interested in videos from their favorite creator, songs from their favorite artists or live sports and cable TV. That certainly creates multiple opportunities for YouTube to grow audiences and revenue—and increasingly, get those audiences to pay for content. Here’s what else is going on… See The Information’s Creator Economy Database for an exclusive list of private companies and their investors. Animaj, an AI animation studio, raised $85 million in a funding round led by HarbourView Equity Partners and Bpifrance Large Venture. Superscale, a Berlin-based startup that uses AI to help companies generate social media content, raised $5 million in pre-seed funding led by Creandum. Superfiliate, a New York-based creator marketing and affiliate startup, announced $2.1 million in new funding led by HappyStack, a software startup for direct-to-consumer brands. Further Adventures, a new studio focused on creators and independent filmmakers, launched last week founded by YouTube vet Steven Beckman and producer Ben Stillman. 8th Note Press, a ByteDance-owned publisher, started telling writers in May that it was shutting down and returning publication rights to the authors, The New York Times reported. Snap acquired Saturn, a social calendar app for high school and college students. The app, which raised at least $44 million in funding from investors including General Catalyst and Coatue Management, was on The Information’s 50 Most Promising Startups list in 2022. Terms of the deal were not disclosed. Obé Fitness, a fitness startup founded by former CAA agents Mark Mullett and Ashley Mills that works with Hollywood studios, was acquired by podcast network Dear Media. Mullett will join Dear Media as president of global entertainment and business development, while Mills will stay on for six months to help with the transition. Terms were not disclosed. Trevor Noah signed a deal with SiriusXM for his interview podcast “What Now?” which launched with Spotify in 2023. SiriusXM will now have exclusive rights to sell ads for the show, instead of Spotify. Jools LeBron, the creator behind the viral “demure trend,” is partnering with talent representation and social agency Viral Nation and production company Forte Entertainment, on a new docuseries about her life called “Beyond Demure.” Derek Thompson, a staff writer for The Atlantic for 17 years, is launching a Substack publication to keep the conversation going around his best-selling book “Abundance” and to write about science, tech and culture. Karandeep Anand is the new CEO of Character.AI, the AI chatbot provider. Previously, he was a board adviser to Character.AI and the vice president of business products at Meta. Alex Dao joined Electronic Arts as vice president of advertising and sponsorship. Previously, he spent six years at Snap, where he was managing director and global head of agency and sales partnerships. “Right now there is a widening gap between the upside AI can unlock and the return most creators see for the data that powers those models. If that gap keeps growing, it risks hollowing out the very ecosystem that makes YouTube valuable. This is a risk not just for creators but also for YouTube,” Steven Bartlett, host of the popular podcast “The Diary of a CEO,” told British newspaper The Times. Bartlett, whose podcast channel on YouTube has about 10.8 million subscribers, has criticized YouTube for training its AI models on creators’ content without paying them. A YouTube spokesperson noted that “only a subset of the videos on YouTube may be used to help power our products.” Thank you for reading the Creator Economy Newsletter! I’d love your feedback, ideas and tips: kaya@theinformation.com. If you think someone else might enjoy this newsletter, please pass it forward or they can sign up here: https://www.theinformation.com/newsletters/creator-economy
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