YouTube is looking more and more like a traditional TV network
For much of its existence, YouTube remained a distant threat to traditional TV networks and cable companies. Sure, it could brag about its billions of monthly views and how 300 hours of video were uploaded to it every minute, but for the most part YouTube viewership was relegated to laptops and smartphones. Designated couch viewing, the kind that results in sometimes hours of uninterrupted viewership (and is most coveted by advertisers), was almost entirely devoted either to cable TV or streaming services like Netflix and Amazon Prime.
That’s why, unlike other industries like music and newspapers, television has been mostly immune to the disruptive forces of the internet. While sites like Craigslist and the Facebook/Google ad duopoly decimated print periodicals, TV advertising revenue continued to increase all through the aughts and for most of this decade. For all the hype around online video advertising, large brands still place tremendous value on the mass viewership of premium, longform content that can only be found on TV.
So while TV networks kept a wary eye on YouTube, they’ve been much more concerned with the rise of streaming networks like Netflix and Amazon Prime, which pose a much more immediate threat to the lucrative cable subscriptions that have propped up the industry for decades.
But YouTube is no longer just the home of short, low-budget videos, nor is it solely confined to our laptops and phones. The proliferation of OTT streaming devices like Chromecast (55 million units sold) and Roku (15 million monthly active accounts) has made it incredibly easy for people to stream YouTube directly to their TVs, and by all measures it seems that they are doing so in droves. According to Deadline, users are now streaming 150 million hours of YouTube videos a day on their television sets.
YouTube isn’t just seeing more OTT TV viewership; content uploaded to its platform is increasingly similar to the programming you’ll see on many major cable networks. This is due, in part, to its investment in both YouTube TV and YouTube Red. The first is a skinny cable bundle that carries live TV from several major networks and includes major sports broadcasts. It currently has 300,000 subscribers. YouTube Red, which doesn’t release its subscription numbers but was rumored to have 1.5 million back in 2016, is an ad-free streaming platform that’s been commissioning original shows that aren’t available on YouTube’s free version. We’re now seeing instances in which YouTube is spending anywhere between $500,000 and $1 million per episode, which is on par with most TV shows.
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We’re also seeing publishers that have traditionally dabbled in short-form video reorganize their video departments to focus on long-form, episodic shows. The emphasis now is on “appointment viewing,” or rather training viewers to expect a piece of programming at a specific time and place. BuzzFeed, for instance, is engaging in windowing, which means a new episode of one of its shows is made available across Facebook, YouTube, Roku, and other platforms at the exact same time each week. The goal is to train consumers to set aside time at the designated hour to watch their favorite shows. This strategy seems to be working. When an episode drops even a few minutes late, BuzzFeed’s head of business strategy Tal Shachar told Digiday, “we’ll start getting floods of comments.”
In addition to establishing more rigid release times, publishers are developing programming with episodic, repeatable formats. BuzzFeed, for instance, has a show called “Worth It” in which hosts will try out different versions of the same food at various price points. Complex Magazine has rolled out dozens of shows with episodic formats. Its show Hot Ones is 24 minutes long — the same length of your average TV sitcom without commercials — and averages over 2 million views per episode.
Now that YouTube is moving in on television’s turf, it’s aggressively courting ad buyers and rolling out new ad tech tools for those who only want to target the users streaming YouTube on their TV sets.
YouTube’s pitch to advertisers includes access to video inventory running alongside the shows as well as different in-show integrations that can be customized based on show format. This includes custom segments within shows, branded set pieces and other similar opportunities, YouTube said. YouTube also offered advertisers a minimum “share of voice” across show inventory, which was done since it’s difficult to guarantee minimum impressions for this new programming, one ad buyer said.
Google Preferred, YouTube’s ad program that opens top YouTube channels to advertisers, is the company’s other big effort to chase TV ad dollars. Since it launched three years ago, the program has seen 30 percent more U.S. advertisers year over year buying Google Preferred inventory. The program is now available in 20 markets.
If traditional TV networks haven’t viewed YouTube as much of a threat thus far, they better start doing so. After all, after years of uninterrupted growth, the TV industry saw its first decline in ad sales recently, and it’s projected to get worse from here on out. But the deterioration is happening even faster for TV channels geared toward children. Bloomberg recently reported that ratings for kids channels like Nickelodeon and The Disney Channel “are now in a free fall.” Viewership is down for these channels by more than 20 percent year over year.
Much of this decline can be attributed to YouTube. It’s not uncommon for children under the age of 12 to have no concept of linear television. Small kids who can’t even read yet know how to navigate YouTube on their parents’ iPads. That’s part of the reason there’s been so much concern recently over the creepy videos that have been served up by YouTube’s recommendation engine.
The question of whether YouTube will ever replace TV has been debated ever since its inception. While it still has a long way to go before it completely replaces traditional television, YouTube’s certainly become a formidable player in the space. In other words, it’s no longer just Netflix that the TV incumbents need to worry about.
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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.
