YouTube TV: Lots of Sizzle, Little Steak

2017 03 17   Peter Feinstein   Online vs Offline Media    

This news has a great buzz to it because it features a well-known name. But it’s known for trivial content, which is why its free material is watched so avidly and its paid content not so much. This announcement was a great public relations move, with few teeth to it. It sure got the trades buzzing.

And even I’m chiming in – debunking it, but still talking about it. So I guess we’ll see. Meanwhile, the video-delivery jigsaw puzzle becomes more fragmented and devalued – while linear TV still looks vibrant, healthy and capable of delivering scale with a return on investment (ROI).
OK, so YouTube is a near-household name. I get it. But I don’t watch it. My 33-year-old son doesn’t even watch it. I concede that the 12-to-18 year old does, and that may be important in a decade or two. But it’ll be at least 10 years before it’s relevant.

Think I’m missing something? You tell me. YouTube boasts about delivering a billion hours of content watched every day worldwide – compared with linear TV delivering 1.25 billion hours of content each day in the U.S. alone.

YouTube’s U.S. daily content viewing is nowhere near a billion hours. Less than 20 percent of its views are from the U.S. And by YouTube’s own stats, only 58.2 percent of U.S. internet users have a YouTube account. The company’s own research shows that only 10 percent of its viewers would be willing to pay $10 a month for premium content, while more than half (54 percent) aren’t willing to pay even $1.
Really? It offers no scale. YouTube is a late-comer to the online-TV party and won’t be the last big name to get in the pool. That there will be no meaningful scale is pretty much a lock.

Beyond the extraordinary lack of scale, YouTube has even bigger problems to solve: viewability, audio on/off and the fact that its own research in the past 18 months shows that more than half its users aren’t willing to pay for premium content.

So why would I recommend my clients spend their advertising budget on YouTube TV? I wouldn’t.