YouTube dominates streaming, forcing media companies to decide whether it’s friend or foe

by | Jun 26, 2024 | Business

In this articleGOOGLNFLXWBDDISFollow your favorite stocksCREATE FREE ACCOUNTIt’s been almost 20 years since the founding of Alphabet’s YouTube, and Hollywood still doesn’t really know what to do with it.YouTube, which effectively invented user-generated content, claims a daunting share of overall media consumption. And it’s no longer just dominating the internet, it’s dominating the living room, too.YouTube made up 9.7% of all viewership on connected and traditional TVs in the U.S. in May — the largest share of TV for a streaming platform ever reported by Nielsen’s monthly “The Gauge” report. Netflix ranked second, claiming 7.6% of viewership. Among streamers only, YouTube’s total viewership was close to 25% market share.”We’re not talking about your mobile phone, your laptop, that I’m sure you see your kids using all the time, but on the biggest screen in the house, the TV,” said LightShed media analyst Rich Greenfield. “Every [media] executive has to be paying attention.”But media companies such as Netflix, Disney and Warner Bros. Discovery aren’t sure whether YouTube is friend or foe.Some media executives see YouTube as a companion platform to subscription streaming services and cable TV — an unwieldy behemoth of non-narrative, creator-led content with a social media slant that doesn’t really fit the New York-Hollywood nexus of professional media. Others — even at times the same executives — view YouTube as an existential threat to the entertainment industry, stealing viewership from subscription streaming services and, with it, the cultural center of American youth.Those competing truths have led media and entertainment companies to concoct a wide array of strategies to combat the growing threat.Disney leaders discuss YouTube “every day” in strategic meetings and have considered adding user-generated content to Disney+, though it’s not on the immediate roadmap, according to people familiar with the matter, who asked not to be named because the discussions are private.Netflix and Warner Bros. Discovery, on the other hand, have consciously chosen to focus on the other 90% of the TV viewing world that isn’t YouTube.”I do think it snuck up on people that YouTube was as important a presence in people’s lives and people’s viewing experiences not just on the phone but in the living room,” said Tara Walpert Levy, YouTube’s vice president of Americas, in an interview.”When Nielsen first noted that YouTube was winning the streaming wars in terms of viewing, full stop, not just for ad-supported platforms, I had a ton of my friends from advertising, from media, who were like, ‘Can you believe it?’ It exceeded even our expectations,” she said.YouTube’s growing dominanceGoogle’s Tara Walpert Levy, now YouTube’s vice president of Americas, speaks during a 2016 Advertising Week New York event, Sept. 28, 2016.John Lamparski | Getty ImagesEarlier this year, YouTube Chief Executive Officer Neal Mohan announced that users watch more than 1 billion hours of YouTube content on TV screens each day. More than 150 million Americans watch YouTube on connected TVs each month, according to the company.Ad dollars have followed. In 2023, YouTube took in $31.5 billion in advertising revenue, up 8% from 2022 and 271% from six years ago. In the first quarter of 2024, YouTube’s ad revenue climbed 21% from a year earlier to $8.1 billion.YouTube, founded in 2005, sold to Google for $1.65 billion a year later. It’s since ballooned in size as advertisers flocked to the platform. MoffettNathanson media analyst Michael Nathanson estimated in March that YouTube would be worth a whopping $400 billion as a standalone company — more than Disney and Comcast combined.”YouTube is still the 800-pound gorilla in this space, and I do believe they’re a pretty unstoppable juggernaut,” said Candle Media co-CEO Kevin Mayer, who previously ran Disney’s streaming business and was briefly CEO of TikTok.Disney’s YouTube focusDisney executives are particularly attuned to YouTube’s rising dominance, given its grip on younger people, according to people familiar with the company’s thinking.Disney has a legion of super-fans who flock to YouTube and other social media sites to promote and critique its parks, rides and merchandise, movies and TV shows. Integrating some of that content as shoulder programming to Disney’s scripted series and movies could help keep users on Disney+.A Disney spokesperson declined to comment on conversations …

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[mwai_chat context=”Let’s have a discussion about this article:nnIn this articleGOOGLNFLXWBDDISFollow your favorite stocksCREATE FREE ACCOUNTIt’s been almost 20 years since the founding of Alphabet’s YouTube, and Hollywood still doesn’t really know what to do with it.YouTube, which effectively invented user-generated content, claims a daunting share of overall media consumption. And it’s no longer just dominating the internet, it’s dominating the living room, too.YouTube made up 9.7% of all viewership on connected and traditional TVs in the U.S. in May — the largest share of TV for a streaming platform ever reported by Nielsen’s monthly “The Gauge” report. Netflix ranked second, claiming 7.6% of viewership. Among streamers only, YouTube’s total viewership was close to 25% market share.”We’re not talking about your mobile phone, your laptop, that I’m sure you see your kids using all the time, but on the biggest screen in the house, the TV,” said LightShed media analyst Rich Greenfield. “Every [media] executive has to be paying attention.”But media companies such as Netflix, Disney and Warner Bros. Discovery aren’t sure whether YouTube is friend or foe.Some media executives see YouTube as a companion platform to subscription streaming services and cable TV — an unwieldy behemoth of non-narrative, creator-led content with a social media slant that doesn’t really fit the New York-Hollywood nexus of professional media. Others — even at times the same executives — view YouTube as an existential threat to the entertainment industry, stealing viewership from subscription streaming services and, with it, the cultural center of American youth.Those competing truths have led media and entertainment companies to concoct a wide array of strategies to combat the growing threat.Disney leaders discuss YouTube “every day” in strategic meetings and have considered adding user-generated content to Disney+, though it’s not on the immediate roadmap, according to people familiar with the matter, who asked not to be named because the discussions are private.Netflix and Warner Bros. Discovery, on the other hand, have consciously chosen to focus on the other 90% of the TV viewing world that isn’t YouTube.”I do think it snuck up on people that YouTube was as important a presence in people’s lives and people’s viewing experiences not just on the phone but in the living room,” said Tara Walpert Levy, YouTube’s vice president of Americas, in an interview.”When Nielsen first noted that YouTube was winning the streaming wars in terms of viewing, full stop, not just for ad-supported platforms, I had a ton of my friends from advertising, from media, who were like, ‘Can you believe it?’ It exceeded even our expectations,” she said.YouTube’s growing dominanceGoogle’s Tara Walpert Levy, now YouTube’s vice president of Americas, speaks during a 2016 Advertising Week New York event, Sept. 28, 2016.John Lamparski | Getty ImagesEarlier this year, YouTube Chief Executive Officer Neal Mohan announced that users watch more than 1 billion hours of YouTube content on TV screens each day. More than 150 million Americans watch YouTube on connected TVs each month, according to the company.Ad dollars have followed. In 2023, YouTube took in $31.5 billion in advertising revenue, up 8% from 2022 and 271% from six years ago. In the first quarter of 2024, YouTube’s ad revenue climbed 21% from a year earlier to $8.1 billion.YouTube, founded in 2005, sold to Google for $1.65 billion a year later. It’s since ballooned in size as advertisers flocked to the platform. MoffettNathanson media analyst Michael Nathanson estimated in March that YouTube would be worth a whopping $400 billion as a standalone company — more than Disney and Comcast combined.”YouTube is still the 800-pound gorilla in this space, and I do believe they’re a pretty unstoppable juggernaut,” said Candle Media co-CEO Kevin Mayer, who previously ran Disney’s streaming business and was briefly CEO of TikTok.Disney’s YouTube focusDisney executives are particularly attuned to YouTube’s rising dominance, given its grip on younger people, according to people familiar with the company’s thinking.Disney has a legion of super-fans who flock to YouTube and other social media sites to promote and critique its parks, rides and merchandise, movies and TV shows. Integrating some of that content as shoulder programming to Disney’s scripted series and movies could help keep users on Disney+.A Disney spokesperson declined to comment on conversations …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
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