The Scoop
YouTube is preparing to test a technical change that could upend the way YouTubers, podcasters, publishers, and other creators make money — and cement the Google-owned giant’s place at the center of the media world.
Semafor has learned that the platform is currently developing a feature that would allow host-read ads to be dynamically inserted and swapped out within individual YouTube videos, as is already the case on other platforms like Spotify and Apple Podcasts.
While the average YouTube consumer is unlikely to notice much of a difference, the move would create significantly more advertising flexibility within YouTube, potentially unlocking a larger pool of ad dollars for podcasters.
In an email, a spokesperson for the company said it did not have any specifics to share on the planned testing, but pointed Semafor to YouTube CEO Neal Mohan’s public letter outlining the platform’s 2025 bets: “This year we’ll roll out more tools to support podcasters, improve monetization for creators, and make it even easier to discover podcasts.”
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Max’s view
YouTube’s test addresses a complaint that many YouTubers and podcasters have had with the platform as chat show consumption via video has exploded.
YouTube runs its own programmatic ads on videos and splits the revenue from these ads with creators, podcasters, and publishers. But on Apple Podcasts, Spotify, and other podcast platforms, podcasters often sell their own host-read ads, which can be swapped out once a podcaster hits an agreed upon download target. This interchangeability means the same sponsorship isn’t running forever on a given podcast episode, so listeners tuning in to older podcast episodes are more likely to get an ad that is relevant to them currently — and podcasters can charge more for that ad space. Despite YouTube’s growth as a platform for podcast consumption, it has not allowed for these dynamically inserted host-read video ads, meaning whatever ad a podcast host reads in a YouTube video is stuck in that video permanently.
Because of this, while YouTube has represented a growing place for podcast audiences, most top podcasters still make most of their money from other platforms. If YouTube eventually opens up this ad-swapping feature to podcasters, it could allow them to better monetize by selling higher-priced ad packages on YouTube or bundling ads together across various podcast platforms.
There are some kinks that could also impact the broader podcast ad market. Episode downloads on platforms like Spotify and Apple tend to be fairly steady and predictable, while YouTube viewership can vary wildly based on whether an individual video gains traction within YouTube’s algorithm or is shared widely. YouTube viewers are also viewed as less valuable than traditional podcast listeners because they often stumble onto a video, or watch for a shorter time, than listeners who seek a specific podcast out. This, combined with the lack of interchangeability, has lowered the price of ads on YouTube.
But the move signals the seriousness of YouTube’s focus on podcasting, and how important the medium is to YouTube’s core business.
The company has increasingly publicized its huge podcast audience, noting monthly podcast listenership on the platform surpassed 400 million hours, and it recently had one billion users who viewed podcast content on YouTube in a month. It has also increasingly offered partnerships for news creators.
(Separately, Kai Chuk, the first director of podcasting for the company, recently left YouTube, Semafor has learned. The company told Semafor that it was bringing its Podcast Partnerships team together with the News and Civics Partnerships teams in a reorganization and was “grateful to Kai Chuk for all his contributions over the years.”)
In an interview with Semafor’s Mixed Signals podcast earlier this month, Mohan emphasized how his No. 1 concern as a CEO was ensuring that its top content creators still want to post on the platform.
“Our lifeblood ultimately is about catering to our core constituents. If we are not delivering for our creators in two very fundamental ways then we’re in trouble,” he said. “YouTube should be the most efficient way to connect a creative idea or a creator with their fans no matter where they are in the world. … And then the second, which has been core to our mission from very early days, is, are we helping them make money? We are the original and largest creator economy.” Mohan said YouTube has paid out $70 billion to creators, media companies, and other partners over the last three years.
YouTube’s increased focus on podcasting has certainly caught the attention of its rivals.
In the late 2010s, Spotify spent hundreds of millions of dollars to expand beyond music into the podcast business. While the effort yielded some well-documented duds and missteps, it ultimately helped the company achieve its goal of boosting subscriptions and becoming one of the major players in podcasting. The company is not eager to give up its position to YouTube. Last year, the Swedish streaming giant started paying some of its top podcasters to include video. The company also launched ad-free viewing for premium subscribers earlier this year.
Netflix, too, is reportedly exploring whether to expand into podcasting on its platform.
Know More
- As Spotify has moved into video, it is now combating a problem that has long plagued YouTube: the increasing popularity of porn on the platform.
- Congressional Republicans are pressuring YouTube to share whether the platform removed content at the request of the Biden administration.