As AI junk floods YouTube and TikTok, premium content could prove its value for advertisers

Is the YouTube dam going to burst this year?

That’s what one popular creator predicted when he announced in January he would retire his channel, saying many more would do so. Business Insider later characterized it as a “coming mass exodus,” leaving only the biggest creators, like MrBeast, and “AI junk” to thrive.

Platforms like YouTube and TikTok that mainly rely on user-generated content (UGC) are flooded with AI work to the point that both have introduced ways for creators to label videos created using AI tools. But as The Verge recently pointed out about these kinds of labels, they rely on the honor system.

Meanwhile, premium-video streaming platforms, which users subscribe to and many of which offer ad-supported plans, can provide more reliability and value for advertisers — especially those that are open to programmatic bidding outside a walled garden, according to industry sources who spoke with The Current. There is less risk of these platforms being muddied with AI content or facing the kind of unpredictability of platforms that mainly rely on UGC. Their audiences are authenticated and addressable, a likely recipe for success for advertisers, especially as third-party cookies are expected to disappear by year’s end.

Streaming TV platforms “offer a degree of comfort to advertisers compared to social video platforms because by and large they provide brand-safe content,” says Ben Woods, video analyst at Midia Research. “With the likes of Netflix, Disney+ and Prime Video all providing ad-supported offers, streaming TV services can provide global reach that competes with the social video platforms.”

As entertainment companies scaled their streaming advertising businesses, “they’ve reduced the value proposition that used to be purely the domain of digital-only companies,” adds Paul Pastor, co-founder and chief business officer of Quickplay, an over-the-top technology company.

Premium video’s potential benefits to advertisers

Woods cautions that premium streaming apps can fall short of video platforms like YouTube and TikTok when it comes to engagement and interactivity, and “the more engaged a user is, the more likely they are to tolerate larger ad loads.”

But, as Pastor notes, those who subscribe to a streaming service might be incentivized to engage more since they’re paying for the product — so long as they’re being offered enough “valuable content at a price they believe reflects that value.”

At any rate, recent research suggests that consumers are more likely to retain what they see in a premium-content environment, which could benefit advertisers.

According to a Comcast Advertising report last year, viewers were 58% more likely to recall ads in a professional, premium-content environment over ads in a UGC environment.

And streaming TV viewership is climbing. In February, streaming accounted for 37.7% of TV usage in the U.S., according to Nielsen, 3.4 percentage points more than the same time last year and the largest share since August 2023.

“The more people are streaming TV, the more accustomed they are to ad-supported streaming TV services, whether that’s a FAST [free ad-supported streaming television] network like Tubi, or a major streaming power-player like Netflix — and the higher their expectations for the quality of those ads,” Jacob Trussell, a content marketing lead at MNTN Research, wrote of Comcast’s findings.

A surge in AI-generated content on UGC platforms could draw a further distinction between premium streamers, especially in highlighting potential brand-safety concerns for advertisers. For instance, an AI-generated Twitch stream, featuring a never-ending standup routine trained on sitcoms, was temporarily suspended last year after a joke violated Twitch’s rules.

“The success of social video platforms was built on authentic content created by human beings,” Woods says, adding that a flood of Generative AI (GenAI) content could be risky for those platforms.

Speaking of authentic: Many advertisers say one benefit of ad-supported premium streaming video — especially in a post-cookie world and as GenAI flourishes — is an authenticated audience.

“Not only is connected TV (CTV) a more premium-content environment than UGC, it also comes with an authenticated audience,” Tim Sims, chief commercial officer for The Trade Desk, wrote in a recent op-ed for The Current. “As we build the new identity and authentication fabric of the open internet over the next couple of years, in many ways, CTV is leading the way.”

He added, “Today’s streaming leaders are at the forefront of new approaches to identity and authentication because they understand the central role that TV plays in all major brand campaigns.”

A creator exodus?

Even MrBeast, whose 247 million subscribers make him the most popular YouTube personality in the world, is getting into premium streaming video. He’ll be hosting and executive producing a new game show on Amazon Prime Video and said he wants to “prove YouTubers and creators can succeed on other platforms.”

Woods and Pastor both expect more high-profile creators to test the waters of premium streaming content, especially if MrBeast’s series is successful.

“MrBeast’s success with Prime Video will depend upon how the show drives ad revenue, Prime subscription growth among younger viewers and sales through Amazon.com,” Woods says. “Expect more streaming TV platforms to commission shows with content creators if MrBeast delivers on those fronts.”

He adds, “However, streaming TV services will need to get comfortable with handing more creative control to content creators if they want these partnerships to succeed.”

Pastor compares the potential trend to athletes, some of whom have turned their personal brands into business empires that extend into television.

“Everyone will be different based on their leverage points, following, and notoriety, and even the type of content they produce, what their brand is and what it stands for,” he says. “But I think you’re going to continue to see collaborations between what [is] social-media-driven talent and traditional publishing companies.”

The Current is owned and operated by The Trade Desk Inc.