• by Alex Weprin , Staff Writer, November 28, 2017

The universe of digital video remains in flux. A slew of over-the-top video platforms, ranging from skinny bundles and singular channels to platforms like Twitter and Facebook, are trying to take marketshare, betting that some of the $71.3 billion spent on TV in 2016 (according to eMarketer) will flow into their coffers.

Despite all that competition, YouTube, the streaming service that arguably started the digital video revolution, still reigns over the free video world, its growth seemingly unaffected by these new competitors. Even as controversy swirls around the site as it faces criticism about its handling of inappropriate videos that appeared in its YouTube Kids app and in kids playlists, the site seems prepared to weather whatever storm hits it.

According to analysis by Pivotal Research group’s Brian Weiser, YouTube video consumption October was up 27% year over year, with similar figures in September and (so far) in November. Weiser crunched the numbers in a recent research report and came to the conclusion that YouTube views are equivalent to 13% of all TV consumption, when monthly viewership hours are compared in a roughly apples to apples fashion.

YouTube’s growth is all the more surprising when you realize that the top 65 media brands on the service account for about half of all its viewership, per Weiser. That is a far cry from YouTube’s early days, when user-generated videos and pirated content from major media companies dominated the site.

That consolidation of media brands may also explain why YouTube was able to shrug off what was seen as a major brand safety scandal earlier this year, and why it appears prepared to deal with its current controversy. In March, news reports showed that advertising from major brands was appearing next to extremist and terrorist content. Major brands began to pull much of their spending off YouTube at the time.

“It definitely got a lot of brands to reconsider their YouTube spending strategy, and several major brands basically stopped spending on YouTube adverting altogether over the next few months,” said Pixability CTO Andreas Goeldi in an interview.

A study from research firm Pixability meant to examine the issue, however, showed that the advertiser exodus largely remained short-lived. While Goeldi said there was a “noticeable decline” in YouTube ad spending in April and May, many marketers that were at first quick to pull their ads (particularly in financial services and luxury brands), returned in short order.

"After a few months when brands were on the sidelines and reconsidered, that activity has picked up again,” Goeldi said. “Most brands are comfortable again running YouTube campaigns, most are back, and most had a brief hiatus based on this brand safety discussion.”

Some ad categories, like beer and video game companies, didn’t seem to adjust their spend at all.

So while some advertisers are once again reevaluating their ad spend on YouTube in the wake of the children's video controversy, if the similar experience from earlier this year is any indication, most of those advertisers will eventually return.

As YouTube concentrates much of its efforts on a few dozen core media brands, it creates an environment that is safer for advertisers, and that is capable of delivering reliable growth. It also becomes less reliant on the controversial third-party channels that produced the offending content.

Even as premium competitors enter the crowded space, and as subscription businesses proliferate (including two from YouTube itself: YouTube TV and YouTube Red), the demand for a free, ad-supported video option remains. So far, YouTube appears well positioned to maintain its grip on that universe of viewers.