YouTube becomes the most-watched app on connected TVs
In recent years, the way we consume video content has undergone a dramatic transformation. Over-the-top (OTT) platforms like Netflix, Hulu, Disney+, and Amazon Prime Video initially dominated the video streaming space.
According to recent data, YouTube has become the most-watched app on connected TVs, surpassing all other streaming giants, including Netflix and Disney+. But how did this happen, and what makes YouTube so unique in the world of OTT?
The OTT Landscape Over the Past 5 Years
Over the past five years, the OTT streaming landscape has evolved significantly. A few key trends stand out:
Growth of Streaming Platforms: OTT platforms have witnessed massive growth. According to Statista, the global OTT video revenue is expected to reach $167.7 billion by 2025. This rise is attributed to increasing subscriptions, as well as the growing number of smart TVs and streaming devices like Roku, Apple TV, and Amazon Fire TV.
Earlier this year, YouTube Chief Executive Officer Neal Mohan announced that users watch more than 1 billion hours of YouTube content on TV screens each day. More than 150 million Americans watch YouTube on connected TVs each month, according to the company.
YouTube’s Growth: YouTube’s prominence in the OTT space has skyrocketed in recent years. As of 2023, YouTube surpassed Netflix in terms of watch time on connected TVs in the U.S., a trend that started to pick up pace during the COVID-19 pandemic.
YouTube's consistent growth is a result of its evolving content offerings, increased engagement, and an increasingly diverse audience.
Shift in Consumer Behavior: The shift in consumer behavior during the COVID-19 pandemic played a huge role in altering how people watch TV. With lockdowns in place, people turned to digital content in unprecedented numbers.
The surge in demand for short-form content and non-traditional TV shows benefited YouTube, allowing it to surpass more traditional streaming platforms like Netflix and Hulu.
Why YouTube is Different from Other OTT Platforms
YouTube's rise on connected TVs can be attributed to several unique factors:
- User-Generated Content: Unlike platforms like Netflix, Hulu, and Disney+, which primarily rely on professionally produced content, YouTube’s content ecosystem is built around user-generated videos. This means there's an almost infinite variety of content, catering to diverse tastes and niches.
- Accessibility and Affordability: YouTube is free to watch, with a premium version available that offers additional features. This accessibility makes it a top choice for viewers who may not want to pay for subscription-based services.
- Short-Form and Long-Form Content: While platforms like Netflix and Hulu are focused on movies and TV shows, YouTube offers both short-form and long-form content.
- A Global Reach: YouTube’s global reach is unparalleled. As of 2023, YouTube is available in over 100 countries and supports 80 different languages, making it accessible to a wide range of international viewers.
Content Trends on YouTube Since COVID-19
The pandemic has drastically altered the type of content that performs best on YouTube. Here's how YouTube content has evolved since 2020:
- Vlogs and DIY Content: During lockdowns, people turned to YouTube for entertainment and learning. Vlogs, DIY projects, and home improvement videos gained immense popularity as viewers sought to make the most of their time at home.
- Short-Form Content: With the rise of TikTok, YouTube introduced YouTube Shorts in 2020. Shorts, which are short vertical videos (up to 60 seconds), have become a huge hit, particularly among younger audiences.
- Live Streaming: The pandemic also saw an increase in live streaming, with creators using platforms like YouTube to host live Q&A sessions, performances, and events. This content type helped boost YouTube’s engagement levels.
- Gaming and Esports: YouTube’s gaming content, including live streams and Let's Play videos, saw a surge as people turned to gaming for entertainment during the lockdown. This has continued to be one of the platform’s strongest categories.
- Health and Wellness: Videos related to fitness, mental health, and self-care grew in popularity as people looked for ways to stay active and positive during uncertain times.
Disney's take on YouTube
Disney executives are particularly attuned to YouTube’s rising dominance, given its grip on younger people, according to people familiar with the company’s thinking.
Disney has a legion of super-fans who flock to YouTube and other social media sites to promote and critique its parks, rides and merchandise, movies and TV shows. Integrating some of that content as shoulder programming to Disney’s scripted series and movies could help keep users on Disney+.
A Disney spokesperson declined to comment on conversations about adding original content to the platform.
The company claims 11.4% of TV viewership, according to Nielsen’s “The Gauge” report, when adding up cable and streaming, including Hulu and ESPN.
“At the end of the day, Disney is a storytelling machine,” said Mayer. “We used short-form video on YouTube as a promotional device for our content. But I don’t think that we at Disney, nor have any other traditional media companies, leaned into YouTube as an original storytelling device the way they probably should have.”
According to internal research, Disney executives concluded that younger Americans use YouTube as an online encyclopedia, said one of the people familiar with the company’s discussions.
Netflix’s take on YouTube
Netflix is taking on YouTube from a different angle.
It doesn’t view the platform as the same singular threat to viewership that some of its peers do. Netflix famously considers everything that could occupy a user’s time, even sleep, as a long-term competitor.
For the time being, Netflix executives consider YouTube as catering to a different consumer need.
“We have built a hard-to-replicate combination of a strong slate, superior recommendations, broad reach and intense fandom, which drives healthy engagement on Netflix. Improvement in these key areas is the best way to delight our members and continue to grow our business,” Netflix said in its most recent quarterly shareholder letter.
Netflix has even found some success duplicating content on YouTube in specific instances.
“Cocomelon,” the animated toddler-geared short-form video series owned by Candle Media’s Moonbug Entertainment, has become massively popular on both YouTube and Netflix. “Cocomelon” has 175 million subscribers to its English language YouTube channel, and “many more if you add in all languages,” Mayer said.
At the same time, “Cocomelon” frequently tops Netflix’s most-watched list among kids shows.
Monetization on YouTube: Why Content Creators Choose It
Monetization is one of the most attractive aspects of YouTube for content creators. Here's how YouTube enables creators to make money:
Ad Revenue: YouTube's ad revenue sharing model is one of the key reasons creators choose the platform. Content creators receive a portion of the ad revenue generated from their videos. In fact, YouTube paid out over $30 billion to creators, artists, and media companies in 2022 alone.
YouTube Partner Program (YPP): To qualify for monetization, creators must be part of the YouTube Partner Program, which gives them access to ads, YouTube Premium revenue, and other monetization features. The program also provides tools for content creators to track their earnings and optimize content for better revenue generation.
Super Chats & Memberships: For live streaming, YouTube offers Super Chats, where viewers can pay to have their messages highlighted. Creators can also offer channel memberships, which provide fans with exclusive content in exchange for a monthly fee.
Merchandise: YouTube also allows creators to sell merchandise directly through the platform, providing another revenue stream.
Conclusion: The Future of YouTube
In the ever-evolving OTT landscape, YouTube has maintained its position as the most-watched app on connected TVs. By offering a diverse range of content, supporting creators, and staying adaptable, YouTube has carved out a niche that other platforms are still trying to replicate. As consumer behavior continues to shift and new technologies emerge, YouTube is well-positioned to remain a dominant force in the digital content world.
With its commitment to creator support, innovative features, and constant evolution, YouTube's future seems bright. It will continue to innovate in the OTT space, offering an unparalleled variety of content for viewers while providing robust monetization opportunities for creators.
