Andrew Ross Sorkin: The
transition from traditional Television to streaming services
has led to a major cord cutting Across the country. So did Netflix just win
the latest round of the Streaming wars? Victoria Greene: I see them as
winning the streaming wars. Alex Sherman: Netflix the great
media disruptor, a company that Turned the entertainment
industry on its head in light of Netflix's ability to just be and
be the king in this sandbox, as Established media companies
struggle to turn a profit on Their own streaming services,
many pundits crown Netflix the Winner in the streaming wars,
the OG of subscription Streaming, the king of digital content. Tom Rogers: I always say the
crown as a program may be over, But it has been crowned the most
successful media company and Most valuable, and it will continue. Alex Sherman: Netflix makes up
more than 7% of total TV usage In the US. But surprise, it's
technically not winning the Streaming wars. YouTubers: I'm gonna spend the
next 50 hours buried alive in This coffin. Gotta be honest. I
kinda think I can do? Expert, No, no, no, no. Alex Sherman: The most watched
streaming platform is YouTube. YouTubers: Hi, friends. I kind
of have a different take on this. Alex Sherman: YouTube, of
course, isn't new. You know that Already It was founded in 2005
but what is new is its Accelerating domination of the
living room. More than half of All YouTube viewing is now done
on a traditional television the Alphabet owned video streaming
platform has led the entire Streaming space in overall time
watched for 15 consecutive Months ahead of Netflix. And if
you zoom out to the entire TV World, we're talking cable,
broadcast and streaming. YouTube Has still watched more than
every other media company's Platforms other than Disney,
which owns Disney plus Hulu,
ESPN, ABC and other cable
networks like FX and Nat, Geo. Rich Greenfield: whether we're
talking Disney plus or Hulu or Paramount plus. You look at
who's still growing, growing the Greatest share year over year.
It is insane that YouTube is Still dominating the growth
rate, even despite their size, Kevin Mayer: any competitor for
time and attention is obviously Not good for streamers. If Alex Sherman: YouTube is already
this far ahead and growing, Should other streamers be
worried, even Netflix, It's been almost two decades
since Netflix moved to online Streaming kicked off a massive
shift in the entertainment Industry, a Race to the Top that
would eventually be deemed the Streaming wars. Currently,
almost every major media entity Is represented in the space in
one way or another, all vying For the attention of a massive
digital audience dominated by Younger viewers. Rich Greenfield: So many media
executives that we would run Into is they, they always sort
of tried to silo and say, Okay, There's this thing called
premium content, that's what you Make for TV or for streaming,
and then there's this other Stuff that you watch on YouTube. Alex Sherman: Now you may be
thinking, isn't YouTube a social Media site? Is calling it a
streaming service comparing Apples to oranges? Rich Greenfield: When you think
about time spent, it's absurd to Separate it into different
buckets, whether you're watching The NFL or whether you're
watching Tiktok or whether You're watching YouTube. It
doesn't matter. It's just time. Alex Sherman: When Google bought
YouTube back in 2006 it paid 1.6 5 billion for a platform that
was only a year old at the time. Fast forward to today, and
analyst Michael Nathanson says YouTube alone could be worth
$400 billion that's not only Worth more than Netflix, it's
worth more than Disney and Comcast combined.
Kevin Mayer: YouTube is still
the intercom gorilla in this Space, and I do believe they're
a pretty unstoppable juggernaut Globally, Alex Sherman: YouTube is the
second most visited website in The world, sitting just behind
its parent company Google, in Monthly traffic. Kevin Mayer: So they have two
modalities, the traditional, Horizontal video, they have the
vertical video. They have a Personalization engine that I
think is kicking in in a big way, Tara Walpert Levy: that is
increasingly one of the biggest And fastest growing platforms
we're on. And when people are Sitting down to watch TV,
they're increasingly turning on YouTube, and you see a lot of
what you'd expect, which is that They are watching longer
sessions, longer content. A lot Of our biggest creators are
starting to make longer content For the TV. Unknown: More than a billion
hours of YouTube content is Watched on TVs every day, with
150 million connected TV viewers Tuning in each month, the amount
of YouTube creators who say the Majority of their watch time
comes from TV climbed more than 400% in just three years. Rich Greenfield: We're not
talking about your mobile phone, Your laptop that I'm sure you
see your kids using all the Time, but on the biggest screen
in the house, the TV 25% of the. Streamed content is coming from
YouTube. Every executive has to Be paying attention. Another Unknown: major factor behind
YouTube's success is the cost or Lack of it. While younger
audiences have shied away from $100 per month for cable TV,
nothing is more appealing or User friendly than free. Brittany Broski: YouTube makes a
lot of money because they keep It free the minute you put up
that wall, a literal paywall Between the product you're
trying to push and the people You want to push it to people
aren't gonna care.
Unknown: And that brings us to
YouTube's other secret weapon. It's content and content creators Tara Walpert Levy: they're
producing at a level that is Consistent with what we've
traditionally expected from Hollywood. Unknown: The beauty of it, and
the evolution of what the Platform has become, is that
whatever you want to find on YouTube, you will find it. Alex Sherman: YouTube's bread
and butter is its user generated Content, or what YouTube likes
to call creator led content. YouTube sees about 3.7 million
new videos uploaded to its Platform daily. That's more than
271,000 hours of fresh content Each day. The responsibility of
content generation falls solely On creators, not the company.
Saving YouTube billions of Dollars. Tara Walpert Levy: Our business
is much more about scale and Audiences and technology, and
that's the base that we came From, and that's why you see us
typically not also getting into The traditional Studio business Michelle Khare: From the Creator
side. It's something that I Think is very, very exciting, in
the sense of creators can have Their work viewed on a
television and the only barrier To entry is the Upload button. Alex Sherman: For years,
traditional media executives Viewed YouTube's creator led
content as low quality, Thinking, sure, it's free, but
eventually, users will want to Watch something with more
substance. But recently, the Evidence suggests otherwise. A
2023 survey found the majority Of both Gen Z and younger
millennials say user generated Content is their preferred
entertainment method. According To a Pew Research Study, 71% of
teens say they use YouTube Daily, with one in five claiming
they're on YouTube almost Constantly. Unknown: I grew up on YouTube. I
think that's a big difference. Is I've seen the way that it has
evolved, and it has filled in
The space between the streaming
platforms. I think there's a lot Of like viewers fatigue. There's
so much media out there that When you find a person that you
really like or that you really Resonate with, or a type of
content that you like, it fits Into a routine of your life. Alex Sherman: Part of the draw
is reliable, consistent contact, Like a relationship, even if
it's through a screen. YouTubers Are available to their
audiences. Viewers aren't Waiting for new seasons or
renewals of their favorite Series, and comments and
analytics mean creators get real Time feedback on what is and
isn't working during covid, with Millions of people stuck in
their houses around the world, YouTube provided people with
something more than just passive Content. It gave them social
connection. People feel Unknown: like they know me
because I'm a friend to them, They can throw me up on the TV.
And I'm sharing parts of my Life. I'm sharing my opinions,
what I'm doing every day. A lot Of people work from home now,
it's just throwing something in The background. That is, it's
not risking missing out on a Chapter. It's just for company,
to be honest, what Michelle Khare: I've appreciated
about being a YouTube creator is Having the opportunity to
iterate, create content and Receive feedback from an
audience immediately. We have so Many creators like red and link,
Jimmy Donaldson, MatPat, people Who have spent years building
their channels into something Where you watch those channels
and qualitatively can't tell the Difference between what we think
as traditional and what we think As as what you would expect
potentially from digital Rich Greenfield: so if you Think
about it, from the Creator Standpoint, they are getting
something that no other platform Can give them, which is massive
global reach on every device in Every language all over Alex Sherman: the world.
YouTube's revenue largely comes From advertising, and while
traditional media companies have
Struggled in recent years to
attract ad dollars as cable TV Subscriptions have declined,
YouTube has soaked up the Revenue in q1 this year, YouTube
saw ad revenue growth of 21% Year over year. YouTube's global
advertising revenue in 2023 was Around $31.5 billion to put that
in perspective, Paramount global One of the largest entertainment
companies in the world had total Revenue in 2023 of 29 point 6
billion. That's for the entire Company, not just advertising.
YouTube shares its profits with Its creators. Over the past
three years, YouTube's Partnership Program has paid out
$70 billion why Unknown: would. I create a show
and sell it to a network when I Could just put it on YouTube,
you're self funding. But if the Money you're making from AdSense
is going right back into your Content to make more money, why
do you even have to contact that Third party? Because Michelle Khare: what we're
trying to do here is not like Take what's working on TV and
throw it on YouTube. We're Trying to iterate on it. We're
trying to be additive to it, put Our own spin on it, and
ultimately develop our own Version of storytelling. Putting Rich Greenfield: yourself onto
Paramount plus, would be like a Death sentence to these
creators, because you would be Constricting the visibility to
such a small level. Alex Sherman: It's unclear if
YouTube's still growing Popularity presents an
existential crisis to Traditional media, but it's at
least worth considering that Streamers, including Netflix may
soon need a YouTube strategy to Address changing consumption
habits, especially among younger Viewers. Can Rich Greenfield: you create a
competitor? I'm sure you could. It's certainly not in the DNA of
any of these companies. Now that Being said, you are seeing
talent that grew up in the UGC World start to make inroads into
the streaming world. Tara Walpert Levy: You need to
make sure you got the scale, you
Need to make sure you got the
technology capability, and you Need to make sure you got the
balance sheet, and there's Probably only a couple companies
that can do that, Rich Greenfield: definitely
having an impact on traditional Television now. Then you layer
on things like Netflix and Amazon Prime doing advertising
now, and you know, you have a Recipe for a very, very
difficult next decade for Traditional linear television. Unknown: Not that long ago,
traditional media companies saw Netflix as a companion service,
rather than a competitor. Then Netflix got so popular that it
started to compete for shows and Movies against the media
companies who supplied it with Content. It's fair to wonder, Is
YouTube ultimately a companion Or a competitor? Tara Walpert Levy: Well, presume
that the street the other Streamers are our competitors.
They're some of our best Partners, right? Because I think
the strategy I see them leaning Into is using supplementary
distribution platforms like YouTube to get out their
content, their marketing, their Engagement with younger people
and younger audiences. Kevin Mayer: At the end of the
day, Disney is a storytelling Machine, and we used YouTube,
that's short form video on YouTube as more of a promotional
device. Now you can still make Money on it. Now you can put a
trailer for frozen two, a two Minute trailer on YouTube, and
actually have advertising Attached to it and sponsorship
attached to it. So you can kind Of kill two birds with one
stone. You can promote your Product and you can monetize on
YouTube. This Alex Sherman: video you're
watching right now is an example Of this exact strategy. CNBC, a
cable television network Utilizing YouTube to expand its
reach. Think about how often you See SNL or Late Night with Jimmy
Fallon clips go viral online. YouTube is expanding reach,
which is great for media Companies, but YouTube is also
competing against these same
Company, streaming services, and
the more time you all watch YouTube, the less time you watch
everything else Kevin Mayer: sports is also
subject to the same phenomenon Where young people are watching
highlights and highlights only, And the whip arounds like the
Red Zone network. What we're Seeing Rich Greenfield: from all of
these traditional media Companies is they don't have
enough content, and it's too Expensive to produce the types
of premium content at scale that They need, and so maybe YouTube,
or maybe the UGC economy, is a Place they look not to create
their competitor, but as a lower Cost way to add content to their
services. Tara Walpert Levy: The magic of
YouTube is the ability to have All of these types of content
and all of these business models Side by side in one place,
because we originated from the Creator ecosystem. You.
