YouTube has won the battle with TV? ‘B*llocks’!

This week Google executive chairman Eric Schmidt declared the battle between YouTube and TV was over, with its digital service the victor in this apparent media war. “Bollocks”, tweeted Thinkbox CEO Tess Alps [in a conversation with Google UK’s head of agency sales Matt Bush]. I’m inclined to agree with her.

Lara O'Reilly

Schmidt was speaking in a “brand cast” presentation to advertisers in which he declined to forecast that internet video will displace television viewing. Instead he replied: “That’s already happened.”

In his defence, Schmidt has a lot to be bullish about. YouTube has already surpassed the heady milestone of 1 billion unique visitors per month and the site is the world’s second biggest search engine.

But while his hubris makes for a great headline, I fear his assertion has somewhat missed the mark.

Last year Google committed to spending $200m to promote original channels on YouTube as it looks to improve the quality of videos that appear on the site, boost dwell time and ultimately scrub itself up to be a more attractive proposition to advertisers.

At the brand cast event YouTube’s head of content Robert Kyncl further asserted its standing to advertisers by citing a Nielsen study that stated YouTube reaches more 18 to 34 year old Americans than any linear cable channel. He went on to say: “TV means reach, YouTube means engagement”.

Separately, in a recent blog post YouTube revealed its 1 billion unique monthly visitors watch more than 6 billion hours of video every month, “or an hour a month for every human being on Earth”. Last year’s London Olympic Games opening ceremony alone gathered an estimated global television audience of 1 billion. The latest full-year viewing figures from BARB state people in the UK watched an average of four hours of linear TV a day in 2012. While the stats aren’t like for like in terms of data set, I’d say they suggest TV means engagement too.

It’s interesting Schmidt can be so assertive about the power YouTube wields over TV considering the lack of uptake for its own Google TV service. In the UK and other territories Google has struggled to gain rights from broadcasters to show their content. RTL’s chief executive Gerhard Zeiler even went as far as saying he would “resign” if he were to let platforms like Google TV sell advertising based around its content.

And with advertising in mind, Nielsen’s latest quarterly global AdView Pulse report found TV ad spend accounted for 62.8 per cent of global ad revenue in 2012, up 4.3 per cent year on year to $350bn. Total internet display advertising had 1.9 per cent market share – and while that doesn’t account for online video or search, it’s clear TV still has the monopoly. Separate estimates from RBC Capital Markets suggest YouTube generated $4bn in revenue last year.

YouTube is amongst the most attractive advertising real estate on the web and last year’s $200m commitment towards quality content will certainly serve to bolster its advertising revenue. But, again, to put that laudable commitment to content into context: BSkyB is forking out £760m per season just to broadcast Premiership football until 2016 and Channel 4 was reported to have spent more than £450m on original content in 2012, to name just two examples.

Head to head, the odds are swinging in the favour of TV on almost all accounts. But YouTube shouldn’t see TV as a direct competitor.

Indeed, campaigns like Red Bull’s Stratos and Three’s dancing pony show that the two can work together to reach audiences at scale and spark the crucial conversations brands and media platforms strive for. And even separately, they are both fantastic mediums advertisers and viewers both use for different things – click to buy vs brand campaigns, a sneezing panda vs 13-part period drama – there’s no hierarchy, they’re all brilliant.

YouTube hasn’t “won the battle”. There wasn’t even a war in the first place



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