What Brands Need to Know About YouTube's 2026 Strategy

• YouTube reached revenue parity between Shorts and long-form in October 2025, creating financial incentive to prioritize short-form content despite lower creator earnings per view

• The homepage reduced long-form recommendations by up to 80%, with most slots now going to Shorts—contradicting the "creator as media company" narrative

• AI tools like Veo 3 are designed to turn creators into content factories producing massive volume, not prestige partnerships

• Brands should design modular productions with swappable segments and Short-first hooks, not multi-episode series

• This isn't co-production partnership—it's renting shelf space in a creator's content inventory

YouTube CEO Neal Mohan wants you to believe creators are building the media companies of the future.

He's selling a vision where brands become co-production partners, integrating from inception, designing multi-episode series that unfold like prestige television.

It sounds compelling. It's also disconnected from what YouTube is actually building.

I've been watching the gap between Mohan's public narrative and YouTube's platform behavior, and the contradictions reveal something brands need to understand: the infrastructure YouTube is constructing doesn't support the HBO-style partnerships Mohan describes.

It supports something else entirely.

The Revenue Parity Smoking Gun

In October 2025, YouTube announced that Shorts reached revenue parity with long-form video on a per-watch-hour basis in the United States.

This is the data point that breaks the entire co-production narrative.

Here's why: Creators report that their revenue per thousand views (RPM) for Shorts consistently sits below $0.20, compared to $3-$6 for long-form content. Six creators told Digiday the same story. The math doesn't add up until you realize how YouTube achieves parity.

They place more ads in front of users every minute or two on Shorts, compared to every five or ten minutes on long-form.

When both formats generate equal money per hour watched, YouTube has a financial incentive to push whichever increases total time on platform. And Shorts now average 200 billion daily views.

The aggressive push into the main feed wasn't a misunderstanding of user annoyance. It was a calculated financial move to shift users toward a format that requires much less cost per minute of attention to produce and serve.

What YouTube Didn't Announce: The 80% Feed Restructuring

Mario Joos works with channels exceeding 100 million subscribers, including MrBeast.

He documented something YouTube never officially announced: the homepage reduced long-form recommendations from roughly 12 slots to just 2, with the remaining space now going to Shorts.

That's a choice reduction of up to 80% for long-form recommendations compared to previous home feeds.

Think about what this means for Mohan's vision of creators as media companies. If you're building multi-episode series designed to unfold over seasons, but YouTube's discovery surface now prioritizes 60-second content, where does that leave your co-production strategy?

Joos also noted something critical about creator sustainability: "Creator sustainability often relies on resources created by content (income) and Shorts often do not generate enough resources to continue to create high-quality content. That's why a lot of Shorts creators try to get into long-form—they are seeking that pathway to sustainability."

Updates reducing long-form discovery opportunities close that pathway.

The Format Blindness Strategy Failed

YouTube has long claimed that "a viewer is a viewer" and that the algorithm simply follows interest across all formats.

The data tells a different story.

Long-form viewers use YouTube for intentional viewing—learning, deep entertainment, narrative content. Shorts viewers are in a lean-back grazing mode, scrolling through an infinite feed.

By forcing Shorts into the main feed, YouTube treated these two mindsets as identical. The result was high swipe-away rates and user fatigue.

In January 2026, YouTube announced search filters that allow users to explicitly exclude Shorts from their results, addressing years of user frustration.

This is YouTube admitting that context matters more than format itself.

The separation into distinct feeds—one for long-form, one for Shorts—mirrors how Meta operates. Users wanted long-form content without being bombarded by Shorts. YouTube's response validates what the data already showed: these are fundamentally different audiences with different consumption patterns.

Shorts as Discovery Engine: The Bridge That Doesn't Exist

YouTube's public narrative positions Shorts as a bridge to help creators grow their main channels.

Internal and industry data suggest Shorts subscribers rarely transition to long-form content.

There's no published evidence showing the bridge works. What does exist is evidence that YouTube's actual strategy uses Shorts to capture the TikTok demographic and keep them within the Google ecosystem, even if it degrades the experience for legacy YouTube users.

They aren't integrating formats to help you watch more long-form. They're integrating them to ensure you never have a reason to leave for a competitor.

Most brands were failing to use Shorts as a way to draw attention to their longer-form YouTube channel—their 24/7 sales agent. But even that strategy faces headwinds now that Shorts live in a separate feed.

Shorts will still hit your ideal customer profile with more content at more touchpoints across platforms. But the discovery mechanism that drove viewers from Shorts to long-form has been architecturally separated.

Veo 3: The Liquid Content Factory

At YouTube's Made on YouTube event, the platform unveiled Google's Veo 3 AI integration for Shorts.

The features include text-to-video generation, AI-powered remixing, and automated editing. Motion transfer allows creators to apply movement from one video to photos. Object insertion enables adding elements through text descriptions.

Dina Berrada, Director of Product for Generative AI Creation, stated the technology generates unlimited free video content with audio capabilities. More than 1 million channels used YouTube's AI creation tools daily in December 2025.

This infrastructure confirms what brands should actually design for: liquid content.

YouTube wants content that can be endlessly reformatted. The tools let you turn one long-form video into ten Shorts with a single click. These aren't empowerment tools for creativity. They're solving a liquidity problem.

To keep the Shorts feed infinite and engaging, YouTube needs massive volume. By building infrastructure that turns creators into content factories, they prioritize platform stickiness over the individual health of a creator's main-channel brand.

What Brands Should Actually Design For

Mohan's vision sounds like a high-end HBO partnership. The actual infrastructure YouTube is building is designed for something different.

Here's what brands should build for instead:

Design for Modular Production, Not Prestige Series

Instead of one co-produced prestige video, design modular productions.

Shoot in a way that allows AI tools to cleanly extract Shorts, generate auto-dubs for global markets, and swap out brand segments dynamically. You aren't co-producing a video. You're co-producing a dataset that the algorithm can slice into a hundred different pieces.

Think asset library, not finished product.

Build for the Swappable Slot Economy

A major shift in 2026 is dynamic ad-slot insertion for creators. This allows a creator to remove a baked-in sponsorship once the contract ends and sell that same slot to a new brand.

The "inception" Mohan speaks of is actually about asset longevity, not just creative alignment.

Stop thinking about integrations as permanent stamps on a video. Design for recurring revenue models. Your production workflow should include clean versions of segments so a successful video from 2024 can be refreshed with a new brand deal in 2026 without a reshoot.

Start with the Short, Not the Series

While the public narrative prioritizes the main channel as the home for brands, the internal strategy treats Shorts as the primary discovery engine.

Co-production in 2026 often starts with the Short. If the Short doesn't spark, the long-form co-production often never finds an audience because the main feed has become too cluttered.

Design your inception phase around short-form hooks first.

If a concept doesn't have 60-second viral or remix potential, the long-form investment is a high-risk gamble.

This Isn't Partnership—It's Inventory Rental

When you design for liquid content and swappable slots, you're not building a partnership.

You're renting shelf space in a creator's content inventory.

The move toward AI-likeness—where creators can license their digital selves—is perhaps the ultimate version of this. It allows a brand to produce content with a creator who isn't even in the room.

Mohan's vision of creators as media companies building prestige content with brand partners sounds aspirational. But the platform behavior tells you what YouTube actually values: volume, liquidity, format flexibility, and time on platform.

The $100 billion YouTube has paid creators over the past four years masks the revenue crisis underneath. One creator reported that a single long-form video worked on all night made more money after one week than an entire month's worth of Shorts.

Creators feel pressured to make Shorts content to keep up with YouTube's algorithm. One recently hired a dedicated consultant to build his short-form presence.

That's not what building a media company looks like. That's what feeding an algorithm looks like.

The Algorithm Shift Creators Experienced But YouTube Didn't Explain

On August 13, 2025, creators reported 30% viewership drops without changing their content.

The desktop to mobile traffic ratio shifted from 56% desktop to 39.3% in weeks—a 16.7 point swing that happened too fast to be organic behavior change.

On September 7, YouTube changed how it prioritizes Shorts, favoring recent uploads over older content. This mirrors TikTok's strategy of rewarding frequent posting over evergreen value.

YouTube stopped judging individual videos and started judging channels as a whole. The platform behavior shifted, but the public communication didn't explain why.

This is the pattern: YouTube's infrastructure moves in one direction while the narrative moves in another.

What This Means for Your Strategy

If you're designing content strategy based on Mohan's co-production vision, you're building on shifting sand.

The platform rewards volume, not depth. It rewards modularity, not narrative coherence. It rewards format flexibility, not creative partnership.

You can still create valuable content on YouTube. You can still build relationships with creators. But pretending the platform supports prestige co-productions when the infrastructure is optimized for liquid content factories will leave you frustrated and underfunded.

Design for what YouTube actually is, not what its CEO says it wants to become.

That means modular shoots, swappable segments, Short-first hooks, and content that can be endlessly reformatted by AI tools you don't control.

It's not the vision Mohan is selling. But it's the reality the platform is building.