Since being founded 20 years ago, YouTube has proven that a streamer service with user-created content has the power to dominate the media consumption of the average viewer. Decades later, Hollywood still doesn’t have an answer to the ever growing platform.
What’s Happening:
- CNBC reports that YouTube made up 9.7% of all viewership on connected and traditional TVs in the U.S. in May. This is the largest share of TV for a streaming platform ever reported. Netflix claimed 7.6% in comparison.
- Among streamers, YouTube dominated viewership with close to 25%.
- Still, decades later, large media companies, like Netflix and Disney, are unsure whether to utilize the platform or compete with it.
- Media executives disagree on whether the platform is a general threat to studio led streaming services and cable TV or just a companion platform that offers entertainment that doesn’t fit in with the professional grade media released out of New York and Hollywood.
- Because of this differentiating viewpoint, studios have had very different strategies on how they combat the content creation site.
- Disney leaders, for example, discuss YouTube daily in strategy meetings. The company has considered adding user-generated content to Disney+. However, it is not an immediate part of their growth strategy according to people familiar with the private discussions.
- Other networks, including Netflix and Warner Bros. Discovery, have chosen to focus on the 90% of other viewers in the market.
- YouTube CEO Neal Mohan announced that users watch more than 1 billion hours of content on TV screens each day. He also shared that 150 million Americans watch YouTube on connected TVs each month.
- With high viewership comes advertisement dollars. YouTube took in $31.5 billion in advertising revenue in 2023, up 271% from six years ago. In the first quarter of 2024, ad revenue was up 21% from 2023 at a whopping $8.1 billion.
- MoffettNathanson media analyst Michael Nathanson estimated that YouTube is worth $400 billion, which is more than Disney and Comcast combined.
- Disney continues to be tuned into YouTube’s rising user base, in part to the platform’s appeal to young audiences.
- Disney has a huge base of fans that make content supporting and critiquing their parks, rides, merchandise, movies and shows. Some see that content as potential shoulder programming for the streaming giant, helping keep viewers tied to the company's scripted series and movies on the platform.
- Disney has not commented on this potential strategy.
- Disney, when adding up cable and streaming, claims 11.4% of TV viewership, according to Nielsen.
- The media giant is also considering putting full episodes of Disney+ and Hulu series geared towards older kids and adults directly onto YouTube in hopes to entice a new audience into subscribing to the platform.
- This strategy has been used for children's media for years with episodes of Bluey, Spidey and his Amazing Friends and Mickey Mouse Clubhouse all being featured on YouTube.
- Former head of Disney streaming Kevin Mayer shared “At the end of the day, Disney is a storytelling machine… We used short-form video on YouTube as a promotional device for our content. But I don’t think that we at Disney, nor have any other traditional media companies, leaned into YouTube as an original storytelling device the way they probably should have.”
- Disney is continuing to figure out the most effective way to utilize the platform.
What They’re Saying:
- Rich Greenfield, LightShed media analyst: “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… Every [media] executive has to be paying attention.”
- Tara Walpert Levy, YouTube’s vice president of Americas: “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.”
- Kevin Mayer, Candle Media co-CEO, former head of Disney streaming and former CEO of TikTok: “YouTube is still the 800-pound gorilla in this space, and I do believe they’re a pretty unstoppable juggernaut.”