Why Google Wanted The iOS-YouTube Deal To Expire
- by Ross Fadner , August 8, 2012
You’re not alone if you’re wondering why Apple is dropping its YouTube app from forthcoming versions of iOS, Apple’s mobile operating system.
Predictably, neither company is saying much, but speculation is rife among analysts and industry execs that Google actually wanted the iOS-YouTube deal between the companies to expire.
Why? Because Google wants to be in control of YouTube’s destiny wherever it lives, and Apple’s iOS YouTube app was also missing one very important element: ads.
As BTIG Research analyst Rich Greenfield writes: “With consumers shifting to mobile devices at an increasingly rapid rate and Google investing serious dollars in higher quality programming for the YouTube platform, we believe Google could no longer allow its YouTube app on iPhones and iPads to go without advertising.”
Indeed, Google has spent the past few years beefing up YouTube’s advertising offerings, including new formats and more overall ads served. Anyone using Apple’s YouTube app for iOS has not been seeing those ads.
This hurts both YouTube and its entire content community, Revision3 CEO Jim Louderback says. He uses his own company as an example, pointing out that Revision3’s views from mobile devices (both tablet and smartphone) grew from 21 to 39 percent of its overall total in the past year, nearly doubling its share.
What should be fantastic news for the content provider quickly turns sour when you realize that iOS YouTube app users are not being monetized at all. In fact, as Louderback says: “Over the last year we’ve seen our percentage of YouTube-delivered views that could have an ad attached (what YouTube calls “monetizable views”) drop steadily — from 57 percent in July of last year to 46 percent this July.”
He adds: “As a business built in part on YouTube, we feel the pain keenly. I would gladly lose 10 percent of our overall YouTube views in exchange for 20 percent better monetization. And that’s why this is a net positive for YouTube and the entire creative community.”
