YouTube Continues to Set Pace for Online Video

Google’s YouTube remains the pace setter for online video volume after passing the billion hour a day mark for viewing late 2017, 10 times the level of Facebook. This is a ten-fold rise over the last four years, attributed by the company to ever proliferating content with more professional material, along with growing use of artificial intelligence based algorithms for making video recommendations personalized to individual users.

YouTube has not attempted to ditch its legacy as a provider of User Generated Content along with music videos that people mostly listened to rather than watched. Instead it is pushing more premium content in parallel through a combination of intelligent recommendation and new sub-branded offerings such as Google Preferred, which identifies and aggregates more prized assets. Google Preferred in turn is broken into two offerings, one focused on "behaviours" and one on "moments". Its behaviours package is based on a new sports marque, called "Lean in Fitness", while the moments centres on premium events such as the Wimbledon Tennis Championships and Glastonbury Opera, in a bid to connect brands to cultural moments.

The ultimate battle in the online video space away from full length shows, movies and complete live events is about capturing eyeballs across all the viewing platforms for selling advertising in particular. One notable aspect here is that this is leading the major players to the big screen, which YouTube has revealed is now its fastest growing platform, exploiting the rise of Smart TVs as well as casting from connected devices like dongles. Currently 50% of YouTube views are via mobile, but this proportion is actually falling slightly, running counter to the prevailing wisdom.

This is why YouTube is placing great store on its increasing presence on conventional pay TV platforms as well. For example, Comcast in the US has just announced it will carry YouTube later this year after agreeing a deal that will make the service available to its customers, just as it has done for Netflix. YouTube will be available via an app on Comcast’s X1 set top boxes, with the content integrated into the Xfinity service. In this case the recommendations will come from Comcast. This comes four months after Dish became the first leading US pay TV company to offer access to YouTube videos through its set-top box in October 2016.

Meanwhile Facebook has just released a new video app, picking Samsung Smart TVs as the launch platform. The app allows Facebook users to watch videos from their friends and their "liked" pages on TV, as well as the top trending live videos. Facebook also recommends videos based on ones already watched by a given user.

This comes at a time of mounting speculation that Facebook is on the verge of acquiring a major media player such as Spotify in a bid to compete with YouTube in the market for converged entertainment. This reflects YouTube’s recent observation that 40% of people streaming music via YouTube are now watching the associated video, with fast growing consumption on big screens as it becomes more available there. Facebook combined with Spotify would be in a stronger position to compete in this space.

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