Sorry, Haters, YouTube Will Only Grow Stronger In Future

A month ago we looked at how YouTube went from the industry pariah to belle of the ball.  Last week comScore released its latest figures, showing that on average video viewers are watching nearly 400 minutes of content each month on YouTube’s site -- prompting me to wonder if anything will ever derail the juggernaut.  Today, we look at some reasons why YouTube will stay on top.

Average Time Spent on Site

Marketers are increasingly favoring websites with high engagement levels over strict unique and page view metrics.  YouTube itself has moved emphasis away from the sheer volume of clicks – in large part because you can game clicks with racy metadata and thumbnails – to the time viewers spend watching videos.  The company recently added a nifty metric showing content owners how many videos their audiences watches in a given period.  YouTube is the undisputed king here, clocking in at clocks in at 399 minutes per month; no one else on comScore’s list cracks 100 minutes.

Mobile

The world is moving to mobile, which is growing faster than the desktop platform ever did.  Internet powerhouses from the desktop era such as Yahoo, Google and Facebook all face challenges from upstarts (such as Instagram in Facebook’s case) or shifts in consumer behavior (like searching on an iPhone, which is a threat to Google’s core search business).  That is not the case with YouTube, which is also the undisputed leader of mobile video.  Viewers on our YouTube channel now generate 25% of our views on mobile devices, up considerably from a year ago.

Trending Up and to the Right

Yes, YouTube doesn’t monetize “as well as it should,” but that is the case with all video platforms.  YouTube’s challenges are largely due to the massive amount of video inventory supply, and less-than-premium content.  However, the revenue you do generate is a function of CPM x inventory -- and the reality is, YouTube is the only player with the kind of scale that can make content creators meaningful revenue.  As such, YouTube is among very few companies where trends are going in the right direction when you dive into the data. 

Analytics

Speaking of data, YouTube is heads and shoulders above the competition when it comes to analytics, thanks in large part to Google’s acquisition of Urchin in 2005, whose analytics product was eventually ported onto YouTube.

Global

Conventional wisdom is that media companies ought to focus on the United States, as it’s the largest advertising market in the world.  But companies like Machinima have managed to build massive, global scale in select verticals thanks in particular to YouTube’s awesome global audience.  Of the views we generated in October for example, only 30% came from the U.S; Canada, the U.K., and Australia drove meaningful audiences, too.

TrueView

TrueView is the ad unit that allows viewers to skip over an ad after five seconds, only charging the marketer if 30 seconds are watched (albeit then at a premium).  In an effort to drive growth in our views, we used to leave the feature on as a courtesy to our viewers, recognizing that most viewers didn’t exactly like pre-rolls.  But I thought that came at a cost to our revenue.  In the past week, however, I went from a cynic to a believer in TrueView.  We ran an admittedly short, limited test when we disabled the service for five days and then put it back on. If I were to make a conclusion based on the data, then not only does the view count trend higher with TrueView, but so does revenue.

Guaranteed Revenue

For ages, I stressed that any distributor who would guarantee real dollars to content owners would be able to lock up great content, even on an exclusive basis.  While YouTube has yet to lock up the most premium of content (HBO, etc.) for obvious reasons, it has started to experiment with guaranteed revenue and exclusive content deals, and while the financial ROI is off and may never come to fruition, it is making YouTube earn top-of-mind status as the video company brands and content owners want to partner with.  That might have been an offensive move, but by leveraging its balance sheet, these deals serve as a defensive move to any possible deep-pocketed challenger.

Independence from the Mothership

Ultimately, Google has proven an ability to leave YouTube alone while giving it the massive resources required to survive initially and to thrive today.  So long as YouTube recognizes the value of the community, then it will be fine, because content owners want to be where content and audiences exist.

For these reasons, I considered YouTube the best U.S.-based digital media acquisition of all time, which will continue to grow stronger in years to come.

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