YouTube, the user-generated content platform owned by Alphabet’s YouTube, has become a dominant force in media consumption, not only on the internet but also on traditional and connected TVs. In May, YouTube accounted for 9.7% of all viewership on TVs in the US, the largest share of TV viewership ever reported by Nielsen. This has left media companies such as Netflix, Disney, and Warner Bros. Discovery unsure of how to approach YouTube. Some executives see it as a companion platform to subscription streaming services and cable TV, while others view it as a threat that steals viewership from these services.
Disney is particularly attuned to YouTube’s rising dominance, considering its grip on younger viewers. The company has discussed the possibility of adding user-generated content to its Disney+ streaming service, although it is not currently on the roadmap. Disney is also considering putting full episodes of Disney+ and Hulu series on YouTube to attract an audience that is not currently subscribing to its streaming platforms.
Netflix, on the other hand, does not view YouTube as a direct threat to its viewership. The company considers everything that could occupy a user’s time as a long-term competitor and believes it has built a strong combination of content, recommendations, reach, and fandom. Netflix has even found success duplicating content on YouTube, with the popular animated series “Cocomelon” ranking among the most-watched shows on both platforms.
Other media companies are experimenting with strategies to combat YouTube’s dominance. NBCUniversal’s Peacock streaming service offers curated clips of popular shows and moments to give users choice in their viewing experience. However, some argue that this strategy is outdated compared to platforms like TikTok and Instagram Reels that have redefined short-form viewing.
Amazon is taking a more direct approach by paying YouTube’s biggest star, MrBeast, to create a reality TV show for its own service. This approach aims to leverage MrBeast’s massive following and success on YouTube to attract viewers to Amazon’s platform.
One of YouTube’s key strengths is its authentic relationship between creators and their fans. Creators have a personal connection with their audience, and YouTube’s low barrier to entry and instant feedback through comments help shape future content. This model cannot be replicated in traditional scripted forms of entertainment, where full seasons are premade and rolled out on specific schedules.
While YouTube’s dominance skews towards younger viewers, it remains to be seen whether this audience will grow out of the platform’s creator-led, non-narrative style of storytelling. Some believe there may be room for both subscription streamers and YouTube to coexist, operating in separate lanes that don’t impede each other too much. However, YouTube is also experimenting with episodic and scripted series to appeal to a wider audience, posing a direct threat to traditional Hollywood.
In addition to its dominance in viewership, YouTube is also a significant player in advertising revenue. It generated $31.5 billion in advertising revenue in 2023 and has shared over $70 billion with its creators through its Partner Program over the last three years.
Overall, YouTube’s growing dominance in media consumption has left media companies grappling with how to approach the platform. While some see it as a companion or a threat, others are experimenting with different strategies to combat its influence. The future of YouTube and its impact on the entertainment industry remains uncertain, but there is no denying its current dominance and the challenges it poses for traditional media companies.
