YouTube: Not Quite Like Cable TV
Cable television, look over your shoulder. YouTube is gunning for you.
Robert Kyncl, YouTube's global head of content, said YouTube does well with advertisers even though it allows consumers to "skip" commercials.
How well? "When we looked at our skippable ads in the U.S., we are now making as much revenue per hour as ads on cable TV."
The good news is that viewers can skip those ads they dislike -- and advertisers only pay for the ads watched. You know what that means: bigger revenues. "When that happens, they don't mind paying more," Kyncl said.
He didn't say which particular cable networks YouTube could be compared to.
In that vein, YouTube thinks about other monetization -- like allowing networks to charge consumers for access to their YouTube channels. That would seem to mean that those networks would pay higher wholesale fees to YouTube or provide higher advertising revenue shares. (For a few years, YouTube has allowed some movie providers and providers of individual videos to charge consumers.)
Here is another comparison to cable: Kyncl said the top 25 YouTube channels get 1 million views a week? We are not sure If this means video clips, full episodes, and/or movies. All this may not be easily comparable to cable.
We know the top 20 prime-time cable networks average 1 million or more viewers a night. But we know that time spent on any cable network is still way higher than anything seen through Internet/digital platforms ike YouTube -- even after factoring in some movie content.
The entire digital video market is around $3 billion a year. By comparison, national cable networks grab $22 billion a year in advertising revenue. If cable networks only charged TV advertisers for those commercials that were "viewable," what would that do to the traditional TV business ecosystem? Would cable still need to look over its shoulders -- or, perhaps according to Internet proponents, just put the blinders back on?