Letter #224: Salar Kamangar (2012)
Google Employee #9 and YouTube CEO | Diving Into Media
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Salar Kamangar is a senior executive at Google, which he joined as the 9th employee right out of college. There, he helped draft Google’s first business plan and start Google’s early legal and finance functions, led product management for Google’s web apps (ie Gmail, Docs, etc), helped create AdWords, and served as CEO of YouTube, among other functions.
Today’s letter is a conversation with Salar while he was CEO of YouTube. In this conversation, Salar discusses YouTube’s shift in strategy from a hobbyist platform to the platform for next generation channels that are more interactive and niche than possible by channelizing YouTube the product and working with content partners to catalyze channel creation. He then shares what he thinks the future of media consumption will look like, how YouTube (and Google) will fit into that future, how the rules around ads have changed when it comes to TV and video, focusing on in-video ads, YouTube’s ability to target ads, licensing deals and subscriptions, how YouTube is ultimately a media platform, regulators and online piracy, and long-term goals. He then takes questions from the audience, sharing his thoughts on six dimensional television, how their programming strategy fits in with recent product changes (and discovering discovery is more important than search), YouTube’s developer program, whether they actively pursue content deals where the content is extended to the app developer, what the user interface might look like in 10 years, watching YouTube on competitor OSes (ie rumored Apple TV), and the channel strategy.
I hope you enjoy this conversation as much as I did! It’s a fascinating look at one of my favorite businesses in the world when it was at a major inflection point.
[Transcript and any errors are mine.]
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Transcript
Peter Kafka: We have the guy who is running YouTube, the guy in charge of the channel strategy, the guy who is helping pay Kassem's bills. Please welcome Salar Kamangar from YouTube.
…
Peter Kafka: It's pretty slick how we did that, right? And we should make sure that the failure we had was not a YouTube failure. That was something on our end.
Salar Kamangar: I thought you blame it on us, but thank you for not.
Peter Kafka: I will not blame you.
Salar Kamangar: I think that was a great example, not just Kassem but also Kevin earlier with the Mortal Kombat series talking about what YouTube's becoming.
Peter Kafka: So let's talk about what YouTube's becoming, and what it is right now. Your--pivot's the wrong word--but you guys are embarking on a pretty significant change in terms of the old strategy. The old strategy was: people upload videos on YouTube, you go find them and you enjoy them, and maybe you sell ads against them. Now you guys are actively going out and advancing people money, trying to encourage people to build content that you'll show on the site which you're putting it together in channels. Did I sum that up correctly so far?
Salar Kamangar: That's roughly right. So, let me speak to why we think this is important. So when we look at the internet, we see that it's going to make possible a kind of channel that's more interactive and more niche than has been possible through the more one way broadcast nature of cable. And we want for YouTube to become the platform for these next generation of channels. It's that simple. The CEO of Machinima--they're one of our largest content partners--he calls this emergence the third wave of media. So the first wave was the broadcast networks, the second wave the cable networks, and we're now entering that third wave. I think that even if YouTube weren't around, that third wave was going to happen, but--
Peter Kafka: Third wave is super niche stuff that individually has smaller audiences than an average cable channel--collectively much bigger?
Salar Kamangar: Well, so it's both more niche and it's more interactive, and has a lot of other characteristics. So on the niche side, I think it's really about what people want to watch today. So people today are talking about yoga, about stand up, surfing--we're outside of beautiful resorts, they're talking about the latest paleo or vegan diets--and there aren't channels for that--
Peter Kafka: What was that? A Paleo diet? What's a paleo diet?
Salar Kamangar: It's kind of the pre-agricultural diet where you eat only what you had eaten the way that our bodies developed thousands of years ago.
Peter Kafka: Do people do this?
Salar Kamangar: Yeah, it's becoming--least in the valley, it's become all the rage.
Peter Kafka: Ah, it's a Valley thing. We don't have it in New York yet. We're still doing cheese and meat.
Salar Kamangar: I'm trying it.
Peter Kafka: How's it going?
Salar Kamangar: It doesn't feel any different, but it makes sense. So we'll see how it goes in a couple weeks.
Peter Kafka: Alright, you're not going to pass out onstage?
Salar Kamangar: No. Meats are allowed. And lots of veggies. You gotta go light on the carbs, though.
Peter Kafka: You have to kill your own food? Zuckerberg?
Salar Kamangar: I've seen that done in the valley, but no, that's not the requirement.
Peter Kafka: Alright, sorry, you threw me off there with the diet talk.
Salar Kamangar: So we care about that, but we don't have those kinds of experiences on cable today. Another example: I was watching the Australian Open this weekend, and I was remembering back 25, 30 years ago, I had to wait, and I could only watch tennis four times a year. Now, I can watch Tennis Channel whenever I feel like it. But I don't have that experience with these other topics I care about. So niche, I think, is a big part of it. But the even--I think--more exciting part about it is the degree to which these channels are becoming more interactive. So couple years ago, Avatar 3D--Anthony Zuiker is the creator of CSI, one of the most successful TV franchises--and he's now working on a YouTube channel. And the way he describes it is he's able to create a 5D experience on YouTube. So he's able to incorporate input from his audience on the plot endings. He's able to design a way that you can choose your own ending, like a choose your own adventure. And he's thinking about how to gamify content. I think you could even go a step further and think about as a six dimensional experience. So imagine that you're watching a football game in three dimensions. You should be able to pick the helmet cam and the point of view that you want to follow for any player in this three dimensional space. Now let's add another dimension. You should also be able to see that game with other people that you already know--and maybe there's even representations of them in the stadium that you're looking at. And the final dimension, I think, is the most exciting, which is the one where you alter the outcome of the game. So you might be able to have a vote, have a say, in what play the quarterback calls next.
Peter Kafka: But this space game doesn't have anything to do with the YouTube strategy. I mean, this is just a thing that you could show anywhere, right? I mean, it's not specific to what you guys are doing. It's cool. It sounds cool--
Salar Kamangar: It's very much what we're doing. So first, on the niche side, it's possible now on YouTube because of the lower costs of content production, as you heard from Kassem G, and because of the global size of the audience, to build niches in a way that you couldn't have done for cable. On the interactivity piece, that's a part that's starting to happen. There's more and more examples of broadcasters that are using YouTube to select participants and audience and talent. These interactivity elements are possible over IP--they're not possible over a one way broadcast system like cable and broadcast. So this has not been possible. It will be possible, and it's going to really change the way we experience content.
Peter Kafka: So you're mapping out lots of cool stuff that you guys can do in the niche part, at the very least, makes sense to me. But there's the Why question. YouTube is phenomenally successful, at least in terms of just aggregate eyeballs, already. 800mn users a month. You're the second biggest search engine in the world. Lots and lots of people like YouTube now the way it is. Why do you want to restructure it? Why do you want them to use it differently than the way they're using it already?
Salar Kamangar: Let me speak to basically the two big changes that we've been working on. So one is: we are channelizing YouTube the product, and the second is that we are working with our content partners and we're trying to catalyze channel creation.
Peter Kafka: But again... and I don't want to beat this into the ground--that's a big change for Google, right? The Google was: There's a lot of information out there. We're going to help catalog it and point you to it. We'll make money along the way as we point you in that direction. Now, you're active going out and--you don't own the content, but you're helping people create it.
Salar Kamangar: Yeah, for us, we're trying to catalyze it in the same way--the analogy I use is, think about when Kleiner Perkins came out with The iFund to support development on the iOS system. Those apps are going to happen anyway, but the Kleiner investment helped catalyze that outcome. So on the content side, the way we are approaching it is we're going to our content creators--about half of them that we're working with in this new initiative are existing partners, and half are newer. And we're saying, Look, you've got this platform with a global audience of 800mn people and all these amazing interactive features. You get Final Cut, you have complete ownership, you have no device restrictions, you can go as niche as you want, you have low startup costs--let's see what you can do. And we've seen that when you give creative people that kind of creative control, they can do amazing things. So catalyzing content creation is a part of it. The second part is the product side. YouTube has been organized around individual videos, and we're moving the site organization to one where it's organized around sets of videos, or channels. And here's why we think that's important. If you were to compare YouTube's top five channels to the top cable networks, the YouTube top five would stack rank against the top 20 in cable. So we have the audience--
Peter Kafka: Total eyeballs, total minutes viewed--
Salar Kamangar: Not in terms of minutes viewed, but in terms of audience. What we don't have are the minutes viewed. And remember, the minutes viewed on YouTube is still very small compared to TV.
Peter Kafka: Where are you at right now?
Salar Kamangar: Don't disclose the specifics, but we're in the ballpark of a couple percent. And so we want that couple percent to keep growing very quickly. And so what we've seen is that it takes too much work on YouTube to find what you want to watch next. And when we look at the way media consumption actually works in the incumbent cases, the experience is very different. When you consume TV, or websites, or tweets, you make two separate decisions. The first decision is, What do I care about? And the second decision is, What do I watch? So let me explain how that affects your consumption. When I watch TV, I go home after work, I have my laptop out, I put Tennis Channel on background. There's a few other Comedy Central shows I watch. Only a few times a year do I change the things I'm recording in my DVR--the network or shows I'm following. So that's my choice about what I care about.
Peter Kafka: Probably leave the channel on and don't flip that much because you're playing with your laptop.
Salar Kamangar: In the case of Tennis Channel, yes, but in the case of Comedy Central, I have more of an active experience watching it. But when I go home each day, all I have to do is choose which episodes from that network or show to watch. Same thing with websites and blogs. A few times a year, I change that list. I follow New York Times and TechCrunch and All Things D, of course, and few other sites. That list changes only a few times a year. All I have to do is, when I go home, is check which article I want to choose. Tweeting, same thing. I follow a certain number of folks. That list doesn't change often. All I have to do is decide which post to follow.
Peter Kafka: You think I will go to YouTube, select the Tennis Channel or the Paleo Diet channel--sounds great--and I'll set it and you guys will just serve up a series of videos for me, and you'll boost the time that way.
Salar Kamangar: That's right. Yeah, because today, the typical consumption experience in YouTube is: you get sent a link, you watch a video, and after about three minutes, you have to decide both what do I care about, and what I want to watch, at the same time, every three minutes. What we want to have happen is you choose in advance the things you're interested in, and you just select from that list.
Peter Kafka: You'd like people to not leave. You'd like to have a little bit more of a passive experience. So even though the fact that I like getting that link sent, and then you guys serve up other stuff, and maybe I go search for something else, and that satisfies me--satisfies lots of people--you want to change that?
Salar Kamangar: Yeah, we think that's going to increase minutes watched. We think that's going to improve user experience. So I love watching kiteboarding and other extreme sport videos. My previous pattern was my friends would occasionally send me a link, and then I'd spend some time on YouTube and I'd forget about it. Now, on my home page, I've pinned the Red Bull media channel, the GoPro channel, other channels--so every time I go to the home page, I don't have to think, Okay, I want to see something that's kitesurfing related, or paragliding related, or parahockey related, I'm going to just choose from the set that YouTube is presenting me on the home page.
Peter Kafka: If you want people to use YouTube the way they use TV and they set up a channel and they lean back, why not just go get TV content? There's plenty of it out there, you guys have an enormous amount of money--I'm sure you guys could work out various deals where you get content people want to watch and they watch it on YouTube?
Salar Kamangar: So, getting TV content is part of our strategy. We have some deals in Europe. We are working on deals all throughout the world. We've also added--
Peter Kafka: You license content a la Netflix or Hulu?
Salar Kamangar: Yes, for example, Channel Four and Channel Five in the United Kingdom as an example of those kinds of deals. We've introduced a new payment model, rentals, so that people can rent movies on YouTube, on Android. So that is part of what we're doing. But--I think if that were all we were doing, it would be a failure of imagination, because it would be us taking content that's been designed for a one way experience and putting it on a platform that has two way capabilities. Kind of like taking radio, putting it on TV, but not having pictures. We don't think that makes sense. So when we look at the way the future is going, we see this experience that's going to be more niche, more interactive, more open, more global. And we're focusing our more recent efforts on being a better platform for those kinds of channels.
Peter Kafka: And, ultimately, you're still an advertising company. You guys make money selling ads. Right now, you predominantly sell, obviously, search-based ads. And on YouTube, the dominant form of advertising are these overlay ads--I guess that's working well for you guys. Is that going to continue to be the way you sell ads on YouTube? And as you move to a TV screen experience, and I'm watching this stuff on a 42-inch LCD or whatever, is that going to work?
Salar Kamangar: We're really focusing on the kind of ads that appear in the videos. When people are on YouTube, we think they're most interested in looking at ads that are in video form. So that's what we've been concentrating on more recently. And there's a really, I think, exciting ad product that we've been working on. We think we've hit it right this time. It's called AdWords for video. And there's a format--it's called TrueView--where a user can watch the ad, and if they don't want to keep watching it, they skip it. If they skip it, the advertiser doesn't pay. And the reason we're focusing this direction is we're seeing--
Peter Kafka: This is not an overlay ad--this is an actual ad that--a pre roll ad.
Salar Kamangar: Correct, yeah. And the reason we're thinking this way is we're seeing that the rules around ads have changed a lot when it comes to TV and video. So I think first, it matters a lot the context in which you see the ad. So YouTube has been known for things like dogs on skateboards. If you see a dog on a skateboard video--
Peter Kafka: Those are great.
Salar Kamangar: I think so too. The CPMs, the cost per 1000 impressions are about $2. Now, if you package that as part of a dog lover's channel or a skateboarding interest channel, that same video can command a $20 CPM. So how you brand and package it matters. So we're very conscious of that. Second, users expect now ads that they want to watch. Old Spice--do you remember the Old Spice campaign on YouTube?
Peter Kafka: I'm familiar with it.
Salar Kamangar: Shirtless guy, Isaiah. Deep in your head somewhere.
Peter Kafka: I saw--some mostly on TV. But yeah.
Salar Kamangar: Yeah. So I think that's an example of a kind of video that you wouldn't have thought possible. That set of videos had more traffic than our top viewed video that year: Susan Boyle. So people chose to watch that. And because of time shifting, because of the ability to click in and out, we think advertisers are going to demand that. Another thing that's changing about ads, I think, is brands expect to have more of a global audience. If you're a brand, you are either global, or you aspire to be global. And you can't get a global audience through TV. We have a global audience of 800mn people, as does the web. And finally, I think advertisers are seeing this as an opportunity to interact with their users in a much more relatable way. So we had a partner panel a little while ago in San Bruno where we're headquartered, and we had some of our partners, like Michelle Phan and others come up and talk to us about--first what product features they'd like to see, but also their experience with sponsors and advertisers--and each of them told us that it's critical for them to pick sponsors that match who they are and help amplify what they're about. Because they'd have no credibility with their followers if they made a wrong turn. So this means that--in the case of Michelle Phan-Lancome--she's able to promote a product and their fans relate to her in a way that you don't get when you have TV celebrities that might be less relatable and more aloof. These are very real, very authentic--and brands can reach users in a completely different way. So we think a lot of things are changing on the ad side, and we're really focusing on in-video ads as the focus now.
Peter Kafka: But there is a part--advertising at least works fairly well right now where you say, I'm a brand, I've got something I want to show, and this person doesn't necessarily want to see the ad, but I'm going to put it in front of them, I'm going to make it as entertaining as I can, but it's not a movie, it's an ad for paper towels. And I need reach and I had this targeting--I don't need to sort of reinvent advertising. I like television advertising the way it works. Can you guys make those brand advertisers happy?
Salar Kamangar: I think so. I think we've seen--I mean, Old Spice an example--who would have thought that you can take an ad for deodorant and make it fun? So I think the incentive system we're building is going to lead towards ads that people choose to want to watch.
Peter Kafka: So they will change the way they make ads.
Salar Kamangar: Absolutely. And also we have better abilities to target ads to people of similar interests. So I think what advertisers ultimately care about is the audience. In the TV world, the only way that they get that audience is by picking specific shows. But a lot more is known now on the web about who you are and your demographics, et cetera. And so I think... audience is gonna become the focus, rather than the show.
Peter Kafka: In addition to running YouTube, you run Google TV, or Google TV is part of YouTube. You guys launched last year, it didn't work well at all. The hardware and software didn't seem to work very well. And the big media companies, the big broadcasters, are blocking their stuff from from Google TV. You guys have revamped--the stuff seems to work much better. I saw a demo, it looked pretty cool. The broadcasters are still not working with you, it looks like. And there's a story out there, which I think is true--it said Rupert Murdoch went to a Google TV demo at CES and had a fit because he didn't like the way pirated content was showing up in search results. Have you figured out--are you going to be able to figure out a way that you can work with big broadcasters, big media players that makes them happy and also works for you guys?
Salar Kamangar: Yes. So here's the reason why we think Google TV matters so much. Think about the era before the iPhone, and before Android, and before the browser was available to you. The OEMs, the phone manufacturers, the carriers, they had applications that connect to the internet, but most of us wanted nothing more than to delete those icons off of our screens. Didn't work very well. Didn't work for developers. The iPhone changed that. So we're trying to do is, we're trying to bring Android to the last class of devices that are not connected to the internet. And there's a number of things we have to get right. We'd rather start early than be late. I think the thing that's changing now is that the cost of the chipsets that power the TVs are dropping to a point where more and more TVs can, without very little additional cost, run full Android software and have a full browser. So that's what it's about.
Peter Kafka: You're describing the technical implications of this and how you think that will get better.
Salar Kamangar: Now, on the broadcast side, to go to your question about the broadcasters, this is, I think, not a YouTube or Google TV-specific issue. When you look at Hulu, for example, you can access Hulu content on your TV only through Hulu Plus. So I think this is a more general concern for the broadcasters. It's not a Google TV-specific one. Our focus is: get YouTube and other web application channels to work well. We're seeing a lot of interest from the cable networks to build apps where they control the experience. And I think, over time, you're going to see more and more over the top services from the cable and satellite companies. And those are going to be available over TV devices, including our Google TV.
Peter Kafka: You guys have played a bit with over the top concepts. In addition to what you're doing with YouTube and the licensing deals you've talked about, you guys have also explored, I think--and you can tell me--the idea of providing a cable-like subscription service. How would that work, and what's the thinking there?
Salar Kamangar: So let me speak first to subscriptions and talk about the different ways you can do that. If you look at the overall video market, about 20% of the revenue is from transactions like box office and DVD. About 40% is from ads and 40% from subscriptions. If I had to make a guess, I would predict that the percentage that's funded by ads is going to increase over time, because the advertising model is very consistent with the way content spreads and is promoted on the internet. So if you're two programmers, and one programmer--their content is going to be limited by device or by geography or by time, and you have another programmer that doesn't have those restrictions--the second programmer is gonna be more likely to have their content spread. If I click on a social link from a social network and it doesn't work, that's a frustrating experience. Over time, I think it's gonna become bigger rather than smaller as a percentage. Having said that--
Peter Kafka: Does that work because the advertising dollars per view also increase, or is it just that's because that's the only other option out there?
Salar Kamangar: I think there are some like local effects--we have a little increase where you have more traffic--but no. I think it's just that the more views you get, the more revenue you make. And you want your content seen as widely as possible. But there are definitely cases where subscription makes sense. There's higher production content. There's content that appeals to a smaller niche. And a lot of our partners have been asking us for that. So that is something that we're considering.
Peter Kafka: What would that look like? How would that work?
Salar Kamangar: So, what they have in mind is, they have three channels, and they have some content that's going to appeal more to their most fervent audiences. Example on the yoga side: imagine you can see free yoga content, but let's say you want to actually have a yoga class with 100 people in it. That's an example of the kind of thing where a subscription model might make a lot of sense.
Peter Kafka: So I pay, through you--access--I pay you a monthly fee and I get to see yoga channel unlimited.
Salar Kamangar: Yeah. Ultimately, we are a media platform. We want to be where the business model of the media owners demand, and so that's why we're--something we're considering. Now on the cable network side, it's something that we have considered, but it has a challenge that I described earlier, where it's about taking one way content and putting on a two way system. So we've decided instead to focus on on new channels on YouTube.
Peter Kafka: So, I mean, there's a lot of sort of mid/third tier cable channels that don't have full distribution. It seems to me a logical thing for you guys to do would be to go to Current TV or Tennis Channel or someone who's not seen in 90mn homes and say, Look, we can get you in a lot more homes than that. Let's figure out a deal. Did you guys look at that and passed?
Salar Kamangar: It's a bit premature for us talk about it because we don't have the product, it's something we're considering. If we have a subscription model, then absolutely. That's something that becomes possible.
Peter Kafka: So interesting. Back to just content relationships in general. You guys did take a big stand against SOPA. You blacked out the Google logo, which--you didn't go dark, but you were actively against it. Rupert Murdoch again said--I think that he called--he said Barack Obama was working for you guys and as Silicon Valley paymasters. I think the fact that you were as active and loud about SOPA as you were sort of set some of your traditional media partners back a bit. Have you talked to them about that?
Salar Kamangar: I was going to discuss this with Rupert over tweeting, but thank you for bringing this up so I can talk about it here instead. I think it's probably a better forum.
Peter Kafka: I'm happy--to help you out.
Salar Kamangar: So we couldn't be more against online piracy, and we couldn't be more against the intent of stopping online piracy. We just think that the way the legislation was written would have had more harm than good. There's a few things to remember, I think, that are important. First is, our business interests are completely aligned. We make money on YouTube, on Android, when we distribute media well. So when our partners in Hollywood and Bollywood and other content communities make money, we make money. Second, 15% of the traffic that go to rogue sites are estimated to come from search engines. That means the rest of the 85% are from blogs, from websites, from social networks. And if you try to go after all these intermediaries, and the users of these intermediaries, I think you have a lot of collateral damage that's not helpful. We do think that there is specific legislation that can help address the problem. The form that we've been most interested in is a follow the money approach. There's an act called Open Act that's been proposed, and what it does is, if you complain to a court system--it could be local, it could be the International Trade Commission--they could then decide if a site is primarily about infringing of content. If they are, they would require that payment processors and ad networks like ours to stop doing business with them. We think that's the right approach because it goes after the rogue actor rather than the intermediaries.
Peter Kafka: And slower. It doesn't immediately shut things down. You could hear the media guys explaining why that's too slow, but you think that's a good idea to have some intermediate steps in there too.
Salar Kamangar: We think what was proposed would have had far too much collateral damage. I think this is something--I think we heard Edgar Bronfen talk about--this is now a time for us together to figure out what the right approach is. On the Google side, there's a number of things that we do that we've taken very seriously. The search team has an effort, the ads team has an effort, the YouTube team has an effort. On the search side, they took down 5mn links last year in response to DMCA. The average turnaround time used to be three days for us. It was about 24 hours recently. And through new sev tools, we're down to about six hours. On the ad side. It's against our policies for us to run ads against sites that might have copyright infringement material. When we look at the takedown notices, we get only less than 1% of the AdSense sites for which we receive takedown notices had AdSense ads on them. So the problem was small.
Peter Kafka: This notion that you guys are sending people to pirate sites, and then when they get there, there's Google ads there so you sort of win both times--you're saying that's not the case.
Salar Kamangar: That's absolutely correct. And in fact, the kind of legislation we're talking about is the kind that would directly impact the bottom line. So that's absolutely not our consideration. We want it to stop, and we just have to find the right way of doing it.
Peter Kafka: I will tell Mr. Murdoch what you said as well.
Salar Kamangar: Great.
Peter Kafka: I've got a bunch of other questions, but we should let you guys ask as well.
Audience Member 1: It's very exciting to hear about what TV could be--six dimensional television. In a world where, over the next three to five years at least, the broadband providers, wireline, and wireless, are all moving to some sort of metering, shaping, et cetera--not just downloads, but uploads--and also Google's historic stance on what broadband ought to be, and the current accommodations on the Android side with folks like Verizon, etc--how do you view the broadband picture in the context of what needs to happen for television to be six dimensional?
Salar Kamangar: I think there are a lot of specifics that remain to be worked out that are really complicated. I think at a high level, though, what YouTube is doing is creating a lot more business, a lot more demand for higher broadband connections. You can't have the kind of six dimensional experiences I was talking about without having the kind of bandwidth that it would require. And so I think we are really creating a big business opportunity for providers of data. So I think there are important questions about how you price that, but when you look 10, 20 years from now, I think you're going to see that YouTube and web video is going to be one of the biggest components helping the business of the cable--of the cable, fiber networks.
Audience Member 1: You're thinking 10, 20 years as opposed to three to five--for some of the solutions.
Salar Kamangar: That's right.
Audience Member 1: Thank you.
Peter Kafka: Near term, the idea that a lot of people could be watching video instead of TV, you could watch a lot of simultaneous--you could substitute TV with web video. The infrastructure that exists now--is that sufficient?
Salar Kamangar: So today, No, there isn't that infrastructure. If you look at the bits--
Peter Kafka: And I'm not talking about 6D TV--I'm just talking about watching a regular ESPN game.
Salar Kamangar: So somewhere between 50-90% of all bits over the internet are video. So the internet has certain capacity. If you were--if we're about 2% of of all TV minutes, if you're to increase that by 50x today, No, the internet's not ready for it. But it's happening very quickly, and I don't think that the technical limitations are going to be the issue. I think it's going to scale with the technology, and with the demand.
Peter Kafka: Ryan?
Audience Member 2: Hi. Ryan at Gigaom. I have a question about how your programming strategy fits in with recent product changes. You recently did a new design of the YouTube site, which makes things very personal. But at the same time, it seems like there's the discovery mechanism isn't really there. And so the question is, in terms of I can set the channels that I'm interested in right now, if I know what they are, but you're investing a lot in bringing all this new content in, and all these new channels in, but there's not really a good way to find that content. There's like, some suggestions, but they're like, off to the side, and down below the fold. But if I don't know what I'm looking for, I'll never find it. So I'm just kind of wondering how you think about that from a product standpoint.
Salar Kamangar: Yeah, that's a great question. That's a huge issue for us. It turns out that for YouTube, discovery recommendations are even more important than search. Google has historically been a search company, so for us to get the discovery recommendations right, it's a big challenge. But it's the kind of challenge that the engineers at YouTube and Google just absolutely love. So what we introduced in December was a new look and feel. We introduced a new guide--so if you go to the homepage of YouTube, you'll see a guide that you can pin channels to. We also introduced new channel templates as part of the guide--there's a guide builder. So the first time you're there, you click on a link at the top, it says, Add channels. And we try to walk you through choices--and we've reduced the set of choices for you--so you pick by category. There's a new and noteworthy section where you can see some of the channels that we've been investing in. So it is a challenge. We've by no means solved it. A long way to go. But it's a kind of challenge that we absolutely love, and we think it's gonna get a lot better soon.
Peter Kafka: Okay. Next question.
Audience Member 3: Yeah, hi. This is about YouTube's developers program. We're one of those--that's why I'm asking about it. Do you think it is an actively pursued initiative or is it just one of those initiatives that over the period might die down and you will like to do everything yourself? The developer program where you give access to the feeds of the videos that you generate, and we can build mobile apps and so on. So how sincere and long term and how much it is part of your core strategy to build YouTube Developer Program?
Salar Kamangar: Great question. Yeah. So we really think of ourselves as having two kinds of developers. First there're the content creators and programmers and curators--and then there's folks that are trying to extend YouTube into more applications and spaces. In the past, we had an approach where we had a very open API strategy and we relied on all of our partners to do all the work around building YouTube experience. What we've done more recently is we've said that in some cases where there's a lot of high traffic, we want to take initiative and apply the resources to build out a unique experience. Netflix is an example of company that's done this very well. So we had a recent announcement with Xbox, where we worked with Xbox, but we developed a specific application that works on Xbox. So I think our approach is going to be to--on the high volume cases, build them ourselves, and the lower volume cases, enable partners through our open API to have access to what they need.
Audience Member 3: So do you actively pursue any content deals where the content is extended to the app developer, or do you think it is sometime it will be and sometime it might not come up to that level?
Salar Kamangar: Another great question. As much as possible, we try to deals that make sense what a YouTube user wants. They want the content available in all geographies, and all devices, all windows. We don't always have it that way, but we're really pushing in that direction. So as a percentage over time, absolutely it's going to get more and more available.
Peter Kafka: Ben?
Audience Member 4: I'm Ben Elowitz with Wetpaint. I'm wondering what you think the user interface is going to look like of my TV 10 years from now, in my living room. And then part of that question is also, Who's going to control that user interface? Of all the various players that we've talked to today, or that are out there, who's going to control that experience for me to sit at home and watch TV? And what's going to get them in that position?
Salar Kamangar: I think there's a couple of different layers of interface you can think about. I think one is going to be deeply connected to the hardware. So this is similar to how on a smartphone, the new OSes have grown up in a way to take advantage of touch screens instead of keyboards. So on the TV side, I think obviously you're looking at voice, you're looking at gestures. I saw a prototype recently where--at CES--where they're playing minesweeper, and you could look at what you wanted to shoot with your eye, and it would shoot. So the technology is really developing there. So I think there's that interaction perspective that's gonna be very tied to the hardware. I think, though, when you turn your screen on, it's gonna have to know who's there. Is there one person, is there two person? So it's going to have to have a notion of identity and accounts. It's going to have to know what you've looked at in the past. It's going to have to know what people who you know have looked at in the past. And it's going to need to know what you tend to like watching. So you've seen the evolution from the channel clicker to the DVR. I think that the experience on your TV screen is going to look a lot more similar to an evolution of what you see now from the Google TV UI or from the YouTube UI, but it's about both the interaction UI as well as the discovery UI. And we're definitely far, far away from from where it could be.
Peter Kafka: So you're working with Google TV with with specific hardware companies. There's versions where you show up embedded in a Sony TV or a Samsung TV, or I can get a regular TV and add on a Bluray player. What happens to this plan if I end up watching my TV through an Apple TV set or some rival TV set that doesn't have a deal with you guys?
Salar Kamangar: I think it's going to be similar to the evolution of the smartphone side. I can't wait to see the Apple TV product that's been speculated about. Sounds like it's going to solve all of my problems, so I can't wait to have one. But I think that there's going to be a lot of different OEMs who are going to have different form factors--in your home, in the kitchen, in different sized formats. And it's important for them to have access to a platform. And so that's we're trying to do.
Peter Kafka: But the Apple/Android phones. I can watch YouTube videos and I can use a YouTube app on on the iPhone, right? But there's a lot of stuff where they're not compatible, where I've either got to make a choice whether I'm going to work with Android or work with Apple. Do you think that same split will happen on the TV platform?
Salar Kamangar: If you look at Apple now, we have a great partnership with them on the YouTube side. It's something that they want to feature front and center. So I think as long as we keep doing a great job of building an experience that people must have, it's something that all platforms are going to want to carry.
Audience Member 4: Salar, just one more thing on that though. When you start coupling the hardware to the software, do you see it as though a TV will be a Google/YouTube TV versus an Apple TV? Or is the consumer going to be able to choose which one of these various platforms to be using on a given set?
Salar Kamangar: If it evolves like the PC and the phone, I think you're going to have an OS that's going to be specific to the hardware, but then the applications you have access to are going to be much broader. So my expectation-hope is that applications like YouTube and others will be available across all OS and hardware platforms, but it's very likely the OS will be tied to the hardware.
Audience Member 4: Thanks.
Peter Kafka: One last question.
Audience Member 5: Hi Salar. Andy Wallenstein, Variety. I wanted to ask you about the channel strategy. You're supposed to launch as many as 100 over this coming year, and I was curious, What's the rationale there? Wouldn't it have been smarter to perhaps concentrate that spend across a smaller span of channels--and the programming that you've picked is kind of almost random. Why not pick certain key areas and target that?
Salar Kamangar: What we've learned from our experience at YouTube is that it's very difficult for any of us to predict what's going to be successful. So we're trying to place our bets far and wide. We are concentrating to some degree. We're coming out with a set of channels in the course of a year--and that, I think, cohesion has made it easier for us to go talk to advertisers. We have a lot of advertiser interest in being part of this set of channels. For us, it's about catalyzing something that would otherwise happen, but more quickly. So I don't think of it as a revolutionary strategy for us--it's an evolution. We've always had channels, but before, channels on YouTube were a way for the uploader to establish a relationship with YouTube. We're trying to take YouTube out of the way of that, and have the channel be a way for people to discover content. So for us, it's about putting more money into the ecosystem, about showing you've got skin in the game. And it's about really trying to figure out along the way, with these partners, what it takes to create content and to do discovery and promotion to be successful on YouTube.
Peter Kafka: Salar, thank you.
Salar Kamangar: Thank you.
Peter Kafka: It's great.
Salar Kamangar: Appreciate it.
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