Posts for 'YouTube'

There was plenty of news in the TV/streaming industries this earnings week. First up we discuss Comcast raising the idea of spinning off its cable TV networks to shareholders. A move like this has been speculated about for years, as the networks are buffeted by cord-cutting. Comcast also said Peacock gained 3 million subscribers in Q3, benefiting from the Paris Olympics. 

Meanwhile Alphabet said that YouTube’s revenue for the past 12 months hit $50 billion, a first for the company. As we discuss, it’s likely that subscription services, which include YouTube TV, YouTube Music and Premium, Primetime Channels and Sunday Ticket, exceeded $15 billion. That would make YouTube one of the top 3 streaming subscription providers by size. 

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In concert with its Made on YouTube event, YouTube unveiled a slew of innovations aimed at enhancing creators’, viewers’ and advertisers’ experiences. Potentially the most high impact is a revamp of its CTV app which will offer “immersive previews” of creator content, modeled on best practices of SVOD apps like Netflix. Creators will also be able to customize how they categorize and organize their episodes in the app. With CTV accounting for at least 40% of YouTube’s views, optimizing the CTV app is critical.

YouTube also updated a number of relatively new AI-powered tools, including “Dream Screen,” which generates backgrounds in YouTube Shorts and a 6-second clip generator, both using Veo, which is DeepMind’s video AI technology, plus a refreshed Inspiration Tab to help brainstorm new video ideas.

Also new is the launch of Communities which allows engagment within the creator’s channel, pulling into YouTube discussions already happening in other social platforms. The feature builds on commenting, which has long been available in YouTube.

YouTube also confirmed broad availability of Pause ads, long in use by others like Hulu, which are likely to get a strong reception.

Many of the features are described in this post.   

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Early returns show Olympics viewership is up strongly so far. But while many devoted fans watch the full-length events, many other more casual fans consume just the highlight clips - often after they search for them subsequent to hearing about a particularly exciting moment (e.g. the clutch pommel horse performance, the long match-ending runback in rugby sevens, etc.). Watching highlights can also help drive casual fans to watch full length. 

All this means that for a long duration event like the Olympics, solid strategy/execution highlight clips distribution is imperative. In today’s podcast Colin and I discuss how we’ve been impressed so far with NBC’s Olympics highlight clips distribution across Peacock and YouTube. We’re able to compare and contrast experiences because Colin’s only been watching on the former and I’ve only been watching on the latter.

We discuss NBC’s balancing act of seeking to build value in Peacock, its owned and operated property, while also recognizing and respecting the reality that YouTube is the number one video search destination for hundreds of millions of users, so it simply can’t be ignored. Finally we discuss the business model benefits of distributing on Peacock and YouTube. 

Overall NBC’s Paris Olympics clips execution is far superior to the last games, and provides lessons for others. Still, we see still further room to optimize, which we review toward the end. 

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We’re excited to have top Wall Street media analyst Michael Nathanson join us this week. Michael and his partner Craig Moffett of MoffettNathanson are the “one-two punch” of the TV, streaming and broadband industries. Their analyses and insights are widely considered best in class. Michael is an old friend, and we’re so pleased to have him join us in this exclusive, must-listen interview.

Among the many topics we cover: the recent decline in CTV CPMs due to Amazon’s market entry and why the new inventory will be digested, the competitive dynamics in the broader CTV/AVOD market, YouTube’s massive scale and Michael’s prediction that YouTube TV will be the pay-TV market leader in two years with 10 million subscribers, FAST’s potential, legacy media’s abysmal $30B cumulative loss on DTC services in the past 5 years, why streaming’s future will be driven by advertising and why the “unit value” of advertising is poised to soar due to AI and finally, the biggest potential surprise in the next year.

Anyone who wants to understand what’s really happening in the TV/streaming industries will find this exclusive interview invaluable.

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This week we discuss the logic of Amazon shutting down Freevee, which Adweek reported, and Amazon denied. We see a number of pros and cons to the move. Meanwhile Nielsen said that YouTube was once again the number one streaming service used on CTVs, ahead of Netflix and everyone else. This was the twelfth month in row for YouTube and we explore the reasons behind it.

Finally the rumor mill is swirling that Peacock and Paramount+ may combine forces, and we dig into how it would benefit both entities.  

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This week on Inside the Stream we discuss our top 10 streaming video stories of 2023. As longtime listeners know, the top 10 countdown is our tradition for the final podcast of the year.

In 2023, our top picks include the rise of smart TVs, the Actors and Writers strikes, TV OS wars, CTV advertising, traditional TV’s continued fall, Disney acquiring the rest of Hulu, YouTube’s growth, SVODs drive for profitability, sports migration to online and Netflix remaining the king of SVOD. We dive into all of them and explain why each is significant. Let us know what you think of our top 10 - did we miss anything?

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Most media and technology companies have now reported Q1 ’23 results. We dig into who’s up, who’s down and who’s pick ‘em, and where they all might be headed. We share all this with the caveat that one quarter’s results are not the final word on a company’s ability to survive and thrive going forward. We hope we’re not in any way contributing to the short-term, quarterly performance myopia so common on Wall Street.

Rather, we’re looking at these companies’ results in the context of prior results, the competitive landscape and their particular products’/services’ positioning. All while trying to do some basic “pattern recognition” - what have we seen before and how is this likely to play out in TV and video. Our discussion is primarily focused on Netflix, Roku, Amazon, AMC, Disney, Comcast, Vizio, YouTube, The Trade Desk, Paramount, Diamond Sports Group, Tegna, Dish and how they’re sorting themselves in the up, down and pick ‘em categories.

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First up this week on Inside the Stream we discuss YouTube’s advertising revenue for Q1 ’23, which was $6.7B, down 2.6% from Q1 ’22 of $6.9B. Obviously growth, not contraction, is the goal, but given the huge headwinds blowing through the ad business, in my view, a slight dip can rightly be considered a clear win. And the quarters that YouTube is now lapping were extremely strong to begin with, so comps will be tough by definition.

We also spend a few minutes discussing YouTube’s four priorities outlined in the earnings call. I’m looking forward to attending YouTube’s NewFront presentations on Monday morning, especially “AI and the Future of Creative Transformation.”

Next up, we both like how Paramount is leveraging Pluto TV by having it stream “THE TONY AWARD: ACT ONE,” preceding the main Tonys broadcast on CBS and Paramount+ on June 11th. ACT ONE is a perfect example of how “shoulder content” that can drive free streaming viewership (helping build Pluto’s brand) while acting as lead gen for Paramount+ and maybe even a little incremental retention for pay-TV.

We expect to see a lot more of this “shoulder content on FAST” playbook run in the future elsewhere too. It’s a solid, synergistic play.

Last, we make a maiden foray into the intersection of AI, video and music, prompted by a well-reported - though maybe slightly over-dramatic - article in The Verge about “AI Drake.” It’s a bit of a head-spinner to keep track of the machinations, but the net of it is that - no surprise to anyone - generative AI is already kicking up some dust related to copyright and Fair Use.

Big players like Google and Microsoft will have to sort out what positions they ultimately want to stake out given their varied business interests. We do our best to decipher things and discuss implications. No easy answers here, but expect a lot more about AI on Inside the Stream in the future.

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Happy new year and welcome to the first edition of Inside the Stream for 2023. Just after recording our Top 10 streaming stories of 2022 podcast a couple of weeks ago YouTube announced its deal with the NFL for Sunday Ticket.

In this week’s podcast we dig into how we think the economics of the deal might work. Colin modeled many of the variables, which I then tinkered with. The clear caveat is that no external person, including us, really knows all the pieces of the deal, nor the terms. So we’re taking our best guesses, based on how Sunday Ticket has performed for DirecTV and the new value we believe YouTube brings to the package.

Based on all of this Colin is skeptical about YouTube’s ability to turn a profit on Sunday Ticket, while I’m more optimistic. In addition I highlight a number of valuable strategic aspects of the deal to YouTube and Google, especially gaining direct experience with the NFL for the next 6-7 years. These insights will be extremely valuable as YouTube contemplates potentially bidding for some or all of the NFL broadcast package when it’s up for renewal in 2033.

Ultimately the value of Sunday Ticket to YouTube hinges on its ability to monetize the package much better than DirecTV did - more subscribers and more advertising revenue.

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On this week’s podcast Colin Dixon from nScreenMedia and I discuss Q3 2022 bumpiness for four companies heavily focused on streaming. Comcast reported a small gain of 10K residential broadband subscribers compared with 281K a year ago. It also lost 540K residential video subscribers compared with a loss of 382K a year ago, as cord-cutting and cord-nevering continue.

Meanwhile YouTube ad revenue was down 2% in Q3, after a blistering period of growth during the past couple of years. Apple TV+ is raising its monthly rate by $2, betting subscribers see enhanced value in its 3 year-old service. And Disney’s CEO envisions Disney+ being tied closer to its theme park business. We explore all of them and share our thoughts.

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In this week’s Inside the Stream podcast nScreenMedia’s Colin Dixon and I discuss the Q1 results of Comcast and YouTube, as well as a new report from Pixability that details YouTube’s massive reach.

Colin leads the discussion of Comcast, which lost 512K video subscribers, leading to a total loss of 1.7 million subscribers in the past 4 quarters. On the broadband side, subscriber growth slowed to 262K, compared with 434K a year ago. Peacock was a bright spot, reaching 28 million monthly active users and 13 million paid users.

Separate, YouTube’s revenue grew at a slower 14% rate in Q1, to $6.9 billion. We discuss more of the details of YouTube’s performance which remains very strong. Pixability also released a valuable new report showing the extent of YouTube’s massive reach and its proliferation on connected TVs. The report is available as a complimentary download.

Colin wraps up with a few takeaways from NABShow earlier this week.

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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

Google reported another strong quarter of advertising revenue for YouTube in Q4 ’21, up 25% to over $8.6 billion. For the entire year YouTube ad revenue was nearly $29 billion. Add in subscription fees from YouTube and YouTube Premium and the company’s total revenue in 2021 was likely in the $35 billion range.

Colin and I discuss the details. Colin also shares new data from Conviva highlighting Roku’s viewership advantage vs. all other streaming devices.

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A new study from Giraffe Insights and Precise.TV of kids aged 2-12 in the U.S. and U.K. has found that ads on YouTube have twice the level of recall compared to any other platform. In Q4 ’21, 73% of the kids in the survey group said they recalled seeing an ad on YouTube, vs. 33% on broadcast TV and 32% on VOD. TV clips, edutainment and gaming were the three specific types of content on YouTube being watched most often.

Beyond recall, ads on YouTube are driving higher purchase levels. The study found that in Q4 ’21, 39% of kids surveyed cited YouTube as the place they saw an ad for the last thing they asked their parents to buy. That was 3x higher than the 12% who cited broadcast TV. No other platform was above 9%.

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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

Free ad-supported TV (“FAST”) channels are getting more attention by streaming services and device-makers. Just this week I wrote about the 11 new FAST channels that Vevo launched in The Roku Channel, while Colin wrote about a number of new Google and YouTube initiatives.

On today’s podcast we do a deep dive on why FAST channels are a win for everyone - content providers, devices, viewers and advertisers. They’re a perfect example of how streaming and CTV open up avenues for different viewer experiences that can match well to particular circumstances. We expect many more FAST channels to launch, especially from companies that have deep content libraries and demonstrated curation skills.

Join us next week on Zoom for a live version of Inside the Stream on Dec. 15th at 2:30pm ET / 11:30 am PT. We’ll be discussing the top stories of 2021 and doing live audience Q&A. It’s free - join us!

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The following video was recorded at VideoNuze's Connected TV Advertising Brand Suitability Summit virtual on November 16, 2021.

Understanding Brand Suitability’s Relationship with CTV Advertising
What exactly is brand suitability and what does it has to do with CTV advertising? Why is it so critical for the CTV ecosystem? Who’s responsible? Why is brand suitability something that  all industry participants need to understand? How is the industry moving beyond conventional notions of brand safety?

- Joshua Lowcock - U.S. Chief Digital & Global Brand Safety Officer, UM
- Susan Schiekofer - Chief Digital Investment Officer, GroupM North America
- Dani Wolinsky - Global Head, YouTube Ads Buying Experiences, Google
- David George - CEO, Pixability (moderator)

Watch the session video now!

Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

In Q3 2021 YouTube advertising increased by 43% to $7.2 billion, extending to 7 out of the last 8 quarters that revenue has grown by 30%+. It’s an enviable track record and on this week’s podcast Colin and I dig into what’s driving the outsized performance.

In short, as I wrote earlier this week, YouTube advertising is succeeding by focusing on the lower part of the marketing funnel, where advertisers concentrate on driving user actions/conversions (e.g. purchase, subscription, etc.). The value of these actions/conversions can be modeled into an ROI formula, and once they’re proven in with high conviction, advertisers will spend more and more, because there’s essentially an unlimited ROI. This is what has driven Google’s and other digital businesses over the years.

But, as we discuss, the untargeted ads running all over Major League Baseball’s post-season games show that targeting and conversions are still a long way away in TV advertising. That means that despite YouTube’s massive growth, there is still huge opportunity ahead, for both it, and all players in the CTV advertising ecosystem.  
 
(Note, I misspoke slightly when referring to TV ads I’ve seen in baseball’s post-season; I mentioned Chipotle, but it was actually Taco Bell whose ads I continue to be inundated with…showing how little attention I pay to them. My point about these ads being totally untargeted - since I’m uninterested in Mexican/fast food and there’s no data to suggest otherwise - remains.)

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Another quarter and yet another blowout performance by YouTube advertising. Alphabet reported Q3 2021 results yesterday, including YouTube advertising revenue of $7.2 billion, up 43% vs. Q3 2020. To say that YouTube has been on a roll over the past two years would likely qualify as a top 10 understatement by any reasonable person’s judgement.

Consider that the quarterly growth rate for YouTube advertising for each of the past 8 quarters has never been below 30%, except in the hardest Covid period, Q2 2020 when it grew 5.8% (keep in mind many other companies’ revenues shriveled in that quarter). The Q3 2021 growth rate of 43% follows Q2 2021 (up 84%), Q1 2021 (up 49%) and Q4 2020 (up 46%).

The growth streak is all the more noteworthy because YouTube advertising has been over $3.5 billion per quarter since Q4 2018 except Q1 2019 (reminder, Alphabet first began breaking out YouTube advertising in Q4 2019, and in that report it also revealed Q4 2018 revenue). To put YouTube advertising's dollar growth in perspective, in Q3 2019 it was $3.8 billion. In Q3 2021 just reported, it was $7.2 billion. That’s an additional $3.4 billion of revenue, or 89.5% higher. In other words, YouTube advertising is growing very fast off of a significant base.

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A new study released by Pixability and GARM (the Global Alliance for Responsible Media) has found that although 99% of YouTube campaign impressions are considered “brand safe,” approximately one-third of these impressions can still be unsuitable for particular advertisers. The new Advertising Insights Study, “What Every Agency Should Know About Brand Safety, Brand Suitability & Performance on YouTube” is based on 20,000+ YouTube campaigns that ran on YouTube in the first six months of 2021. DoubleVerify’s brand safety measurement provided further input to the study.

The study first seeks to distinguish between brand suitability and brand safety, as well their impact on campaign performance. GARM has developed a framework for identifying 11 topics that can be considered objectively harmful. On these dimensions, which align with YouTube’s own monetization policies, GARM reported in April, 2021 that YouTube is 99% safe for advertisers.

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“There’s something happening here,
But what it is ain’t exactly clear…”
-Buffalo Springfield, “For What It’s Worth,” 1967

Late yesterday, Alphabet released its Q2 ’21 earnings. Included was the single snippet of financial information for YouTube that Alphabet began reporting a couple of years ago: “YouTube ads,” which represents YouTube’s global advertising revenue (non-ad revenue such as YouTube TV and YouTube Music subscriptions, etc. are not included). YouTube’s ad revenue for Q2 ’21 was $7.002 billion, which was 84% higher than the $3.81 billion Covid-affected Q2 ’20 ad revenue, and 94% higher than the $3.60 billion pre-Covid Q2 ’19 ad revenue.

Yes, Covid dampened Q2 '20 ad revenue, as management had previously said. But still, you read those numbers right. An 84% year-over-year increase. On a very large prior number.

Consider a little comparative context for YouTube's $7 billion quarter: YouTube’s ad business alone is nearly the size of Netflix’s entire global subscription business, which generated $7.34 billion in revenue in Q2 ’21. But two years ago, Netflix’s Q2 ’19 revenue was $4.92 billion, which means over the past 2 years, Netflix has increased its second quarter revenue by $2.42 billion, or 49%.

YouTube has increased its ads revenue alone by nearly $3.4 billion, or 42% more than Netflix. Since Alphabet does not disclose YouTube’s specific expenses, it is impossible to calculate its profitability. But because virtually all of YouTube’s content comes from third party creators while Netflix’s annual content tab is approaching $20 billion, suffice it to say YouTube’s ad business is far more profitable than Netflix’s subscription business. It is also fair to project that in Q3 ’21 YouTube’s ad revenue will exceed Netflix’s subscription revenue.

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If you were one of the 14,000 attendees of last week’s NewFronts presentations, a central message that you couldn’t miss was that streaming has become an essential way for advertisers to reach 18-49 year olds. The coveted age group, which has long been the bread and butter for TV networks, is rapidly shifting its video consumption behaviors, and NewFronts presenters wanted ad buyers to know that they can either follow the eyeballs or risk losing access to this huge cohort.

Presenters expressed the message in different ways, but here are a few that caught my attention:

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