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Analyst: Google set to be the changing face of TV as we know it in 2016
Looking at prospects for the business of TV over the next 12 months, media analyst Seeking Alpha has tipped 2016 as a catalyst year for YouTube with the trend of cord-cutting/shaving.
Even though it recognised the plain fact that search will always be the cash cow for the IT giant, SA notes that video advertising and subscription service will be the key drivers for Google as YouTube leverages its billion plus viewer base.
Looking at key drivers to support this analysis, SA pointed to a number of favourable macro economic elements. These include an ‘irreversible’ trend of cord-cutting and cord-shaving as viewership and engagement migrate to digital channels, which, says SA, provides a secular tailwind that favours video distribution platforms that have a broad spectrum of content capable of attracting various audiences.
In addition, SA sees the global growing penetration of smart TVs with YouTube as a pre-installed channel app as also driving YouTube penetration higher, allowing Google to steal more ad dollars away from TV. SA regards TV as remaining the largest untapped market within traditional media and proposes that that this area represents the most attractive growth area for internet companies as they aggressively focus on online video distribution by creating large-scale, brand-based ad campaigns and leveraging existing user bases to attract advertisers.
Despite the fierce competition in the over the top and online media sectors and the difficulty for the service to immediately make an impact, SA sees YouTube having sufficient resources to differentiate from other OTT platforms such as Netflix and Hulu. It adds that by investing in original content and leveraging the gaming asset that it has, YouTube could differentiate the platform from its peers and attract paying subscribers.
Over time, SA predicts that it would not be surprising to see digital distribution disrupt cinemas as big budget films are released through both online and offline channels. It observes that with a billion active viewers each month, YouTube could become the next movie distribution platform.
Looking at prospects for the business of TV over the next 12 months, media analyst Seeking Alpha has tipped 2016 as a catalyst year for YouTube with the trend of cord-cutting/shaving.
Even though it recognised the plain fact that search will always be the cash cow for the IT giant, SA notes that video advertising and subscription service will be the key drivers for Google as YouTube leverages its billion plus viewer base.
Looking at key drivers to support this analysis, SA pointed to a number of favourable macro economic elements. These include an ‘irreversible’ trend of cord-cutting and cord-shaving as viewership and engagement migrate to digital channels, which, says SA, provides a secular tailwind that favours video distribution platforms that have a broad spectrum of content capable of attracting various audiences.
In addition, SA sees the global growing penetration of smart TVs with YouTube as a pre-installed channel app as also driving YouTube penetration higher, allowing Google to steal more ad dollars away from TV. SA regards TV as remaining the largest untapped market within traditional media and proposes that that this area represents the most attractive growth area for internet companies as they aggressively focus on online video distribution by creating large-scale, brand-based ad campaigns and leveraging existing user bases to attract advertisers.
Despite the fierce competition in the over the top and online media sectors and the difficulty for the service to immediately make an impact, SA sees YouTube having sufficient resources to differentiate from other OTT platforms such as Netflix and Hulu. It adds that by investing in original content and leveraging the gaming asset that it has, YouTube could differentiate the platform from its peers and attract paying subscribers.
Over time, SA predicts that it would not be surprising to see digital distribution disrupt cinemas as big budget films are released through both online and offline channels. It observes that with a billion active viewers each month, YouTube could become the next movie distribution platform.