In this post GlobalWebIndex's Felim McGrath explains that YouTube TV may offer a strong indication of where the future of television may lie.
‘It’s live TV designed for the YouTube generation—those who want to watch what they want, when they want, how they want, without commitments’. This is how YouTube see their new TV service, which offers users in the USA access to live streams of 40 networks (including key sports broadcasters) and YouTube Red, for $35 a month (with six accounts allowed for each membership). And in an industry obsessed with cord-cutters, falling cable subscription revenue and the behemoth that is Netflix, YouTube TV offers a strong indication of where the future of television lies.
Certainly, YouTube has a vast potential audience for their service. More than 4 in 10 U.S. YouTubers are streaming live TV content online each month. What’s more, GlobalWebIndex’s research also shows that YouTubers display an even preference between watching live broadcasts and consuming TV content on-demand. So the ability to both live stream and access shows anytime via the service’s innovative unlimited cloud DVR offering is likely to appeal to a variety of needs.
Perhaps YouTube TV’s greatest asset, and the factor that many other services may adopt, is its recognition of the continued importance of live TV. GWI’s research shows that the average US internet user is now watching over three hours of broadcast TV per day, a figure that is remarkably similar to that from a few years ago. Focus in on younger groups – or the ‘YouTube Generation’ as YouTube have been keen to label them – and we do clearly see the impact of online TV platforms. In the USA, the home of Netflix and a market with one of the most advanced online TV industries, 16-34s are now close to averaging two hours per day watching online forms of television. Yet these younger generations are still spending more time, on average, watching traditional broadcast TV (albeit among 16-24s, linear TV’s lead is degrading).
Of course, the real issue here is cord-cutters (or cord-nevers), those viewers who are consuming all their TV content from online platforms and don’t see the need for a traditional cable TV subscription package. This is a topic that has filled immeasurable column inches over the past few years and caused much consternation among the television industry. But GWI’s research shows that true ‘online-only’ TV viewers are a small minority among US consumers, and that broadcast TV remains a key part of the viewing habits of US internet users, even among younger groups. Live TV is still in demand, and that’s a demand that YouTube is keen to capitalize on.
However, there is perhaps a quiet revolution happening here that is not to do with viewing habits, or converting the much obsessed-over cord-cutters, but the vast databanks and ad-serving knowledge that YouTube (and Alphabet’s Google) can bring to the television industry. The traditional advertising targeting methods of broadcast TV are vastly out-of-step with the advances in audience profiling that has propelled digital advertising over the past ten years and form the basis of Google’s multi-billion-dollar revenue streams. There has been little indication so far from YouTube that they intend to pursue this strategy and the advertising time that they would control may be limited, but the potential here can’t be ignored. Offering brands hyper-targeted ad spots during live sports broadcasts, for example, is simply too profitable an opportunity to pass up.