nyone looking for relief from the pall hanging over the advertising business didn’t find it in YouTube results Tuesday. The Alphabet-owned video sharing site, something of a bellwether for the creator economy, said YouTube’s ad revenue fell 2.6% to $6.7 billion during the first quarter compared with the same period a year ago. That was the third straight quarter of decline, and worse than the less-than-1% drop in Google’s total ad revenue. Executives blamed the economy and advertisers keeping a tight grip on their wallets—basically the same culprits that have led to a string of recent closures and layoffs in advertising-supported media businesses.
Executives highlighted where growth was happening, notably in TikTok rival Shorts. Alphabet CEO Sundar Pichai said the number of channels that uploaded to YouTube Shorts daily increased by 80% this quarter, and that channels new to posting Shorts saw the majority of new subscribers coming from those who see their Shorts content. “YouTube Shorts continue to see strong momentum with creators,” Pichai said on a webcast with investors.
Alphabet execs also highlighted continued gains in YouTube TV and YouTube Premium, its subscription product, as well as shopping. More than 100,000 stores connected to sell products on YouTube Shopping, Google’s chief business officer, Philipp Schindler, said. “Our creator ecosystem and multi-format strategy will be key drivers of YouTube’s long-term growth,” he said. “The goal is to be a one-stop-shop for multiple types of video content.” By that point, presumably, advertisers will have returned.
Here’s what else is going on…
Big Number: 515 Million
That’s how many people listen to music, podcasts or audiobooks on Spotify each month. The audio streaming company on Tuesday said it eclipsed a half-billion monthly active users for the first time in its history, a 22% increase from the previous year.
Paying subscribers to Spotify’s premium, ad-free service rose 15% to 210 million in the first quarter from the same time last year, but they still only represent just under 42% of all the streamer’s users. The free product generated 17% more revenue year-over-year vs. a 14% gain in revenue for the premium product.
Spotify said revenue rose 14% to $3.3 billion compared to the previous year, $100 million shy of its own expectations. Still, that growth was the same as the fourth quarter’s.
Those gains came during a quarter marked by downsizing. In January, it laid off 6% of its workforce, or 600 employees, to cut costs and restructured its podcasting and advertising business after a pricey expansion in the last few years. It also slashed certain projects, like its live audio app Spotify Live and Wordle-style music game Heardle.
Spotify CEO Daniel Ek on Tuesday said the firm is going to be much cautious about spending on content. “We’re going to be very diligent in how we invest in future content deals, and the ones that are performing, we will renew,” he said on the first quarter earnings call.
Deals & Debuts
See The Information’s Creator Economy Database for an exclusive list of private companies and their investors.
Meta Platforms hired Microsoft chip executive Jean Boufarhat to lead its development of custom chips for hardware devices as the company considers overhauling its silicon strategy, my colleague Sylvia reported on Tuesday.
VidCon announced its slate of attendees for this year’s convention on Tuesday, including executives from Snap, Twitch and YouTube.
Klarna, which offers buy-now, pay later financing, is redesigning its app to become more of a curated, personalized shopping experience for users. The app is introducing new features in the U.S., including Creator Shops that allow creators to host their own customized storefronts and the ability to resell items through secondhand marketplaces.
T2, the Twitter alternative founded by ex-Twitter and Google employees, will begin allowing its users—which now are fewer than 1,000—to invite five new users to the web app on Tuesday, according to TechCrunch. T2 previously only offered waitlist sign-ups to the general public.
Bluesky Social, the invite-only decentralized alternative to Twitter backed by Jack Dorsey, has been downloaded by iOS users 245,000 times, more than half of which were in the last month, since opening its waitlist in October, according to Data.ai, Bloomberg first reported.
Zoop, a celebrity trading card platform led by former OnlyFans executives, announced it’s using AI-based technology from Human.ai to enable fans to hear creators speak their language when engaging with them through video and audio.
Magroove, a Brazil-based distributor of music by independent artists, raised $1.6 million in a seed round led by venture capital fund DOMO Invest.
ICYMI: Hana Kuma, the media company co-founded by tennis player Naomi Osaka, raised $5 million in a fundraising round last week. SpringHill, the investment firm co-founded by basketball player LeBron James, and Fortnite-owner Epic Games led the round. The new capital allows the Hana Kuma to complete its spinoff from SpringHill. The funding is set to go toward expanding Hana Kua’s programming, including into anime and manga formats; one of its investors, The Kinoshita Group, owns an animation studio.
People on the Move
Allison Yazdian is joining LTK as senior vice president and head of growth, where she will oversee the team responsible for creator expansion and success on the shopping platform, the company announced in a Tuesday blog post. She previously worked at real estate firm Compass, where she served as senior vice president and head of growth.
Marques Brownlee, a YouTuber with 16.8 million subscribers who makes videos about tech products, announced a partnership with footwear brand Atoms to create a limited edition sneaker.
Shaun Kilmartin was promoted to vice president of technology and special projects at Sound Royalties, a finance firm that helps music creators leverage their royalty streams, the company announced on Tuesday. He previously served as the director of information technology and special projects. Allison Portlock, who previously served as the company’s director of marketing, was also promoted to vice president of marketing.
Overheard
“I am particularly concerned by the content moderation system of Facebook,” European Union industry chief Thierry Breton said in a Tuesday blog post. “Now that Facebook has been designated as a very large online platform, Meta needs to carefully investigate its system and fix it where needed ASAP.”
Breton, who enforces the EU’s content moderation rules for tech giants, singled out 19 companies and search engines that will be subject to new online content rules because they fall under the designation of “very large online platform,” which he defined as having more than 45 monthly active users. The new rules include requiring the companies to do more to combat disinformation and take down illegal content. He also warned Twitter, TikTok and YouTube were among the platforms subject to the bloc’s new requirements, which will take effect in August.
What We’re Reading And Watching
• What Was (and Is) the ‘It’ Girl? (The Cut)
• A Refuge From Internet Algorithms Is Hiding in Plain Sight (The Atlantic)
• Meet the Overachieving Creator Teaching TikTok To Chill The F-ck Out (Rolling Stone)
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Isabelle Sarraf is an editorial fellow at The Information based in New York City. Contact her at isabelle@theinformation.com or follow her on Twitter at @isabellesarraf.