Litigating which company has won the so-called “streaming wars” has been a popular parlor game for media observers for some time.
Nowadays, most will agree that Netflix has emerged victorious when compared to its peers. But one service has been overlooked according to one media analyst because it doesn’t fit neatly into the SVOD (subscription video on-demand) category that Netflix now dominates.
That service is YouTube which, in terms of consumption, outpaces Netflix by a substantial margin. According to Nielsen’s “The Gauge” metric which tracks television streaming consumption by service, YouTube (not including YouTube TV) captured about 41% more streaming viewership than Netflix in the month of February.
Appearing on John Ourand’s The Varsity podcast, media analyst Michael Nathanson of the firm MoffettNathanson asserts that “YouTube has won the streaming wars.”
“Streaming, defined larger than subscription video on-demand, right? …YouTube is something like 24% of all consumption last year on connected TVs, was on YouTube or YouTube TV,” Nathanson said. “So I think it starts with YouTube is what I’d say…Netflix is second, and probably Amazon, Disney third and fourth.
“We can’t ignore YouTube here,” Nathanson said. “I know they’re not — yes, Sunday Ticket, they’re paying for content — they’re not considered a sports rights bidder, but they really have potential to be very disruptive here.”
Currently, Google/YouTube has been very selective when it comes to its involvement in live sports rights. In fact, the only live sports content it has purchased is the NFL Sunday Ticket package that gives subscribers access to out-of-market Sunday afternoon NFL games.
That package has complemented and grown YouTube’s cable alternative, YouTube TV, which is the largest virtual pay TV service in the country with around 10 million subscribers.
But given the company’s restraint on purchasing live sports rights thus far, they’ve largely flown under-the-radar as a potential sports media disruptor.
Contrarily, YouTube’s peers — namely Netflix and Amazon — have been relatively active in acquiring sports rights.
Amazon, of course, has the NFL’s Thursday Night Football and will be a major NBA partner beginning next season. Netflix has been more restrained, but still airs NFL games on Christmas Day, recently acquired the next two FIFA Women’s World Cups, and has broadcast a number of popular one-off sporting events like the Mike Tyson-Jake Paul fight.
At its core, YouTube is not a service that has traditionally paid for content. The platform relies on user-generated content to sell advertising against, with a portion of that ad revenue going to the creator. Purchasing live sports rights, which often run in the billions of dollars, would be a monumental pivot for YouTube from a content strategy perspective.
But that doesn’t mean the company should be counted out when it comes to acquiring live sports rights. YouTube certainly has the money to make a splash if they’d like, it’s simply a matter of if a given property fits its greater strategy.
