YouTube has established itself as a mainstream platform for streaming video content online, but its ambitious goal of reaching 1 billion “watch time” hours per day through 2016 is reportedly lagging behind expectations. The Information has learned that YouTube has less than 300 million viewing hours per day, up from the 100 million daily hours of watch time when the goal was set in fall 2012.
Despite users spending more time watching videos on a daily basis, YouTube still has quite a lot of ground to make up before it reaches the 1 billion hours plateau. While it has focused on strengthening its relationship with content curators, YouTube is facing increasing competition from Netflix, Facebook, Twitter, Vine, Amazon, Comcast, Yahoo and others.
Netflix in particular is said to have passed YouTube in “watch time,” according to the report.
Amir Efrati of The Information:
“One big risk posed by the competitors is that they could lure away content creators who are unhappy with the deal they’re getting from YouTube. Another type of challenge could come from startups such as Victorious, launched by ex-YouTube employees, which are aiming to help YouTube video creators build audiences off of YouTube, including through their own mobile apps.”
Nevertheless, the report claims that YouTube is still in a good position with video makers. In fact, the company just announced that it is rolling out new features for video creators such as 60 FPS support, fan donations, more visible playlists, viewer-submitted subtitles, a new annotation-like “info cards” function and a standalone YouTube Creator Studio app for Android.
YouTube was also reported to have revenue of $3.5 billion in 2013, falling short of some analyst estimates placed at between $5 billion and $5.6 billion last year. Nevertheless, the company is profitable. The company is said to generally pay out about 55% of its gross revenue to content curators on the website, leaving it with net revenue of about $1.5 billion in 2013. YouTube does not publicly disclose its revenue figures.
Increasing revenue is a challenge that YouTube CEO Susan Wojcicki faces:
“The figures underscore the growing set of challenges facing Susan Wojcicki, the former Google advertising-products executive who took over YouTube in February, replacing Mr. Kamangar. Ms. Wojcicki is charged with scaling YouTube revenue to tens of billions of dollars, as she did with Google’s core search-ad products.”
The report adds that YouTube has thousands of video creators that each earn $100,000 or more in ad revenue on YouTube, which is unsurprising given the view that some channels like PewDiePie and Philip DeFranco amass. Google has been earning more revenue off YouTube thanks to its advertising feature “TrueView,” which charges advertisers only if users do not click on the “skip” button during an ad.
YouTube could thwart off the competition by improving its gaming content through its rumored acquisition of Twitch, a website that allows users to live stream games as they are playing them. This model has evidently proven successful, as PewDiePie’s YouTube channel consists almost entirely of him playing games with live commentary on top, and he has over 28 million subscribers.
YouTube is also believed to be working on a streaming music service to compete with Spotify and others, but it has been repeatedly delayed due to internal conflicts:
“The YouTube service has suffered repeated delays in part due to internal conflicts, including the fact that the Google Play app store on Android-powered smartphones and tablets already offers a subscription music service. More recently, YouTube has had well-publicized conflicts over licensing contracts with some independent music labels.”
Google did not respond to request for comment.
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