 This video might not be the biggest, but it could easily be the most unnecessary risk of my career. The smart play for me would have been to jump onto the hate bandwagon, anger sells, and the internet is pretty freaking angry about the premium paywall that YouTube has been experimenting with on 4K videos. But that would have been a huge disservice to our community. So instead of doing that, I've spent the last few days thinking about it a lot. And you know what? I'm still pretty frustrated. I mean, no one likes being given something only to have it taken away later. And no one likes feeling powerless in the face of an entity with the power and resources of Google. As a full-time YouTuber, trust me, I feel that. But I've also come to realize that this might be a necessary move if we wanna preserve the good things about this platform. Really good things, like the world's largest free repository of independent news media, educational resources, and cultural expression. Good things like this segue to our sponsor. Enlisted. Enlisted is a free-to-play multiplayer World War II shooter. Jump into large-scale battles from authentic moments in history like the invasion of Normandy. Check it out by following the link in the description. Before you even say it, I am no corporate bootlicker. Over the past year, I have gone to the mat with YouTube a lot more times than I've taken their side, notably over the utter incompetence of their comment moderation efforts, their removal of the dislike counter, and the way that their half-effort HDR implementation has literally held back the entire video production industry. But in this case, once I calmed down a little, I was able to start putting together the pieces. And we're gonna start with the biggest and the most obvious one, cost. Since 2007, the amount of content per minute uploaded to YouTube has grown exponentially. And it's common knowledge that data centers are expensive, and the more data you serve, the more data centers you need. But as scary as this trend line already looks with that in mind, it doesn't even begin to tell the whole story. First of all, it doesn't account for the size of the video files being uploaded. Back in 2007, digital cameras were relatively rare, and the ones that we had recorded at pretty low resolutions, anywhere from 240p to 480p. That means a typical minute of video would take up a trifling 35 megabytes or so. And that was the high quality source file. No big deal then, right? Especially since YouTube can re-encode those uploaded files and serve them at a lower bit rate to save on both storage and bandwidth costs. But let's fast forward a bit to five years later in 2012. Not only had the sheer volume of video uploaded to the platform increased tenfold, but HD 720p video recording was available on commodity smartphones with the latest iPhones capable of full HD 1080p. That puts our typical minute of footage at anywhere from 75 to 100 megabytes. Through compression, we can still probably cut our storage and hosting costs in half, but even if just, say, 40% of new uploads are in HD now, and I don't know, 10% are in 1080p, corrected for video size, our bar graph will start to look a little bit like, whoa, a problem. Except it actually wasn't, at least not yet. YouTube's user base and their revenue also increased dramatically during this time, meaning that even if they weren't making money on it yet, Google could easily justify the ongoing investment into their video-serving side hustle. And besides, it didn't hurt that every time Google built a new data center, it was cheaper and more efficient than the last one. In just three years, from 2009 to 2012, mechanical storage drives went from a cost per gigabyte of 11 cents to just five cents. That's less than half the price. Moore's Law to the rescue again, right? About that. To be clear, not everyone agrees with Nvidia CEO Jensen Huang, but even Moore's Law's most stalwart defenders have to admit that things have been slowing down for a while. Let's jump ahead another three years to demonstrate to 2015. Even ignoring the pricing anomaly that was caused by the Thailand floods, storage drives fell only about 25% this time around. There are a number of reasons for this, but the main issue is that it has become extremely difficult to pack zeros and ones more densely on the spinning magnetic platters inside these devices. To be clear, there are still cost savings to be had by running fewer higher capacity drives and filling them with helium gas and whatnot. But those efficiency gains are nothing compared to the data bomb that was about to be unleashed on YouTube. 2015 was the first year the iPhone would come standard with a 4K rear camera. And 4K is a very different kind of beast compared to anything that came before it. With four times the pixel count and very nearly four times the data rate, I suspect that the only thing that saved Google servers from immediately lighting on fire is that Apple configured the camera app on that generation of iPhone to record in 1080p by default. Likely not out of consideration for their bitter rival, but rather because the base model iPhone 6S could only hold about 40 minutes of 4K footage total. And also maybe because, except under very specific conditions, you could barely even tell the difference between 1080p and 4K video that was recorded on that phone anyway. I'm gonna get into more detail about that later. The point is that even if only 10% of video uploads transitioned to 4K per year over the next few years, YouTube would need to find some way to grow their revenue or they could risk becoming non-viable. Obviously they kept up with their efforts to grow the user base with big pushes in non-English speaking regions like India and Latin America. But by three years later, the end of 2018, YouTube had nearly cracked 2 billion with a B, monthly active users. So unless they started up some kind of diabolical program where they actually started breeding more people to consume content on their platform, it was pretty clear that their days of exponential user growth were well behind them. They needed to find another way to get profitable and do it fast or daddy Google, excuse me, Alphabet by this point, was gonna do what they do best and pull the plug. Enter YouTube premium. Sure, it did exist before this, but it wasn't till around this time that YouTube started pushing the program hard. They've tried various ways to add value to premium over the years through original content, background playback and bundles with Google Play Music, RIP. But of course, the main attraction has always been the removal of ads. How could they afford to remove the ads, you might ask? Well, because even for a data mining advertising machine like Google, a paid user, even for just a few dollars a month is worth way more than an ad supported user. Like it is bloody hard to make money on free tier ad supported content. I mean, Twitter took nearly a decade to have a single profitable year and they serve almost exclusively still images and text, which isn't to say Google hasn't tried. Since then, you've probably noticed that ads have gone from simple pop-ups in the videos and pre-rolls to pop-ups, pre-rolls, mid-rolls and end-rolls, some of which are stacked with two or more on top of each other. And a recent trial had Google piling up as many as 10 ads during a single content break. Yikes. And this strategy of packing in more ads has served them pretty well, with revenue growth finally turning a corner over the last couple of years, outpacing user growth significantly. The problem is that it's not enough. Look at the user upload trend. And remember that unless they start deleting old videos, they need to store all of the previous years uploads as well. Oh right, and over the last five years, hard drive prices have essentially bottomed out, falling only about one cent per gigabyte. Making matters worse, storage is only part of the problem. On our video platform, Floatplane, 4K playback makes up only about 6% of our views, but over 20% of the total bandwidth that we have to pay for. And while it's harder to dig up solid historical data for this compared to hard drive costs, it is clear that there has been a stagnation in bandwidth costs as well. That is to say, they're not getting lower. How bad is it? Well, to the point where Google went as far as to co-found the Alliance for Open Media in 2015. AO Media is a consortium whose main purpose so far has been to create and foster industry support for AV1, a video codec that manages similar 1080p visual quality to H.264 while requiring only a little over half the data transmission or bitrate. Ah, bitrate. I said I would talk in more detail about other factors that affect image quality, and now is the time. The second reason that I believe this move makes sense is that serving up more pixels isn't necessarily the best way to improve the user's experience. And this focus on how many P's or K's a video has has contributed to a ton of consumer confusion about it. For starters, pixel count is one contributor to the resolution or the perceived clarity of an image, but it is not the entire equation. Everything else is important too, from shot composition to color management, to contrast and natural bokeh. Don't believe me? Well, here's a video I ripped off from this guy, Marques Keith Brownlee in HD. That looks pretty good for 1080p, right? For comparison, here's some 4K video, but from a cell phone. It's tiny sensor, low bitrate internal recording, mediocre dynamic range, blocky processing, and poor image stabilization all contribute to the blurry, ugly viewing experience that you see before you. So then, while there are absolutely creators on YouTube who invest heavily into their production values and whose videos are best enjoyed with more pixels, I think it's fair to say that they're a minority. And I also think it's fair to say the same for users who, reason number three, mostly don't actually need 4K. I know, I know, like you, I wanna use the most advanced platforms and get the absolute most out of my devices and services, be they gigabit plus internet connections or 8K TVs. But please hear me out. While I don't support everything that Apple does, I wholeheartedly support their use of retina branding to describe displays that are sharp enough from a typical viewing distance, regardless of their pixel count. They, rightly, determined years ago that unless you happen to be a bird of prey, you not only do not need a 4K display on your phone, but the trade-offs in cost, brightness, and power consumption could actually make it a disadvantage. That means that right out of the gate, 43% of you watching right now, straight up do not need 4K. Moving on, the latest Steam hardware survey shows that 4K monitor penetration is at roughly 15%, while these numbers from Statista peg 4K TVs at about 44%. Almost all tablets top out at around 1440p, and again, rightly so, meaning that at most, even if you have 20-20 vision, only about 10% of you actually have the hardware to benefit from a 4K stream option. Well, sort of. One of the main benefits of YouTube's 4K selector is that, pixel count aside, it streams at a much higher bit rate than 1080p. So in practical terms, that means that it has fewer compression artifacts, like banding or blocking, so that even if you're watching in a small window, you can often make out extra detail in the image. But the good news is that 1440p offers a middle-ground high bit rate option and isn't on the free-tier chopping block, at least for now. And even if it was, I think there's a solid non-4K solution to that going forward. It ties in nicely with reason number four. Juicing more and more pixels through the pipes is just plain bad, inefficient tech. Once you've got enough pixels, a better way to boost perceived clarity is to bump up color saturation and contrast. That's where HDR comes in. There's still some work to do on this, but the word on this tree is that YouTube has been investing significant resources into fixing their HDR implementation, which also won't be paywalled and will result in much higher quality 1080p video with a much more modest increase in data rate. Another area where I think YouTube could stand to redirect these 4K paywall savings is audio quality. I mean, sure, it's not as headline-worthy as 4K or 8K or whatever, but audio is hugely important, especially for music videos, which last time I checked are kind of a big deal on YouTube. Google's laissez-faire approach to improving audio has been a point of confusion for me for a long time and is actually one of the main drivers that brought garbage time streams over to our in-house video streaming platform, Floatplane, which, by the way, charges extra for 4K because it's expensive, but it's also pretty sweet with loads of behind the scenes and extras like this one. Go check it out, floatplane.com. To be clear, there's a big difference between what we did, charging for 4K in the first place and the bait and switch that Google is pulling here. And Google has no one to blame but themselves for the backlash that they are undoubtedly gonna get for this move. This Silicon Valley money furnace, don't worry, we'll figure out how to make money later model has always seemed pretty short-sighted to me, but the numbers make it clear that even if this causes a big PR hit, and it will, something has to give. But I have to at least give YouTube credit for sticking to its core principles when it comes to supporting creators through the change. Unlike Twitch, who recently announced a change in creator compensation, YouTube isn't just cutting costs and pocketing the difference. They also aren't taking away creators ability to upload their videos in the highest possible quality for those who want it. What they're doing is they're identifying an area where they can cut their costs to support non-paying customers, convert a chunk of those into paying customers, and then share this uplift with their creators, which is reason number five that this makes sense. A view from a premium subscriber is worth substantially more than an ad-supported view, while also being a better lower friction experience all around. And this move is gonna drive more revenue for creators and therefore drive more high quality content to the YouTube platform. YouTube's position as the most desirable place for online creators to be is no accident. They were so far ahead of the competition on this that no one even now has managed to catch up. I mean, think about it. Aside from having crap to your video quality, TikTok sucks at compensating creators. Oh yeah, if you go like live on there, they take 80% of like, if people- What? 80%? Tip or anything like that, they'll take 80% of it. You can expect the exodus shortly after Shorts monetization goes live next year. And I already mentioned Twitch, which rewards its top tier creators pretty well, but then completely falls apart once you start looking at anything beyond the top 1%. And then there's Facebook, who managed to rug pull a whole generation of starting out content creators by focusing hard on video and investing a bunch of money, then bailing just as hard when the Zuck first joined VRChat and decided to Howard Hughes that shiz. And so that's the real reason why YouTube keeps getting worse and you keep watching it, because it's where all the content is. So if I'm in YouTube shoes, I'm going, this thing costs us a fortune. Most people don't really need it. And some of our most successful creators don't even use it. Paywalling 4K is kind of an obvious move. But even after hearing all of this, I can totally understand if you might conclude that Google makes so much money, they should just suck it up and pay like they said they would. The thing is though, even if you think that they could pay and they should pay, they won't pay. Why not? You ask. Well, why don't I turn that back around on you and ask why would they? The best possible argument I can think of for them to just keep eating this cost that is literally trending skyward to a vertical line is it would be the good guy thing to do. But Google has never done anything out of the goodness of their hearts. So why would you expect them to start now? Maybe it's just time for the semi-annual reminder that publicly held corporations will always by law act in their own self-interest and in the interest of their shareholders. So we are left with a harsh choice then. Keep the truly important things about YouTube and subsidize them through a small percentage of users, you know, the ones with 4K monitors and TVs or open ourselves up to other much worse cost cutting measures. I mean, what if the alternative is to start pruning old videos and we have to give up that library of rarely watched content that you might need someday when it's time to repair the obscure washing machine you inherited from your Aunt Frida. Some people might feel that just adding more ads is a vile path forward, but I honestly disagree. I think we've reached a practical limit to how many ads YouTube can cram into a video. So the revenue growth isn't gonna come from there. The AV1 codec that I talked about before is more efficient and it helps with storage in ways that I didn't anticipate that could actually merit a follow-up video, but it comes with new costs, particularly computational ones. So it's not magic, meaning that if this, paywalling 4K is what it takes to drive enough premium users that we can kick this data crisis a few more years down the road, then I guess I'll just make some demands like, hey, at least boost the 1080P bit rate while you're at it, or hey, you should make 4K available to channel members who don't also have premium. But the reality of it is whether YouTube listens or not, I'm gonna lie down and take it. And so will you, if you're being honest. YouTube is essentially a monopoly at this point and there's not a lot we can do about it. It's not all bad though. It's also one of the bona fide wonders of the world, in my opinion. And I for one live better with this incredible resource that helps me do everything from learn about black holes to fix my washing machine. And allows me to tell you about our sponsor. Enlisted. 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