Youtube Mobile vs. Youtube on your TV

In an interview with GigaOm a Youtube spokesperson said that 40pct of Youtube videos are coming from Mobile devices.

That is incredibly interesting to me. Why? Because it means that Youtube has done a great job of training its users. They have trained them to understand that  there is no reason to watch Youtube video on any device other than mobile. Watching video on a mobile device is good enough. That is great news for Youtube mobile monetization. Advertisers want to reach mobile users and Youtube can deliver.

It also suggests that rather than using mobile devices as a discovery device and flicking it to a bigger screen like a TV, they are exclusively using mobile as a discovery and viewing device. I never thought that users would want to tie up their phones by sending their Youtube video to a bigger screen. I don’t think people perceive there is enough of an improvement in the viewing experience to tie up both their phones and their big screen tvs. It looks like Youtube users are satisfied with the mobile video viewing experience.

Which leads to whether or not we will see Youtube be a viable source of content for our big screens? TV manufacturers are making Youtube a core part of their application offerings.  Their expectation is that Youtube will be a destination for video that will compete with traditional TV. Personally I have always thought that this was a fail because it was too much work for the consumer to find the content they want. Youtube has tried  to organize content into channels, genres and branded content as a way to combat this problem. The idea was that if users could develop an affinity for branded content they would be happy to load the Youtube app on their TV and click on the branded content.

A funny thing happened on this journey. Youtube walked into funding higher end content they hoped would provide viewing experiences competitive to traditional TV and almost as quickly walked away from it leaving their content partners upset and with very difficult financial models. Youtube is all about generating viewing minutes and the more expensive content obviously didn’t generate the minutes they had hoped for.

Not only that, but with the amazing success of TrueView they could finally monetize all the junky user generated videos on mobile and the web. If someone watching a cat video chooses to watch an ad rather than skip it, that’s a good thing for the advertiser no matter what the UGC video shows.

So they have far less need to generate more minutes.  With TrueView letting consumers skip the ad after a few not too intrusive seconds, they could not only serve ads around UGC, but they could learn what ads worked, on who and where. They didn’t need the big studios to generate more minutes for them. TrueView let them find higher margin minutes that were already in the YT ecosystem.

So what does this all mean ?

I believe Youtube realizes that its future is all about mobile.  That while some users will throw video content to larger devices (after all who doesn’t want to show your friends the  kids soccer game or the vacation videos you recorded on your phone at six flags on a big screen), the super majority and then some of YT consumers will be perfectly content to find and consume video on their mobile devices. Our HDTVs will continue to be dominated by traditional TV sources with increasing usage of  long form video OTT providers like Netflix (NFLX) and Hulu and   gaming consoles.

It also means that professionally generated content is pretty much doomed on YT.  If YT can monetize, particularly on mobile UGC with far higher margins,  why would they pay 55pct of revenue to the channels  ? The uploading of videos on YT is accelerating, which means the UGC inventory for TrueView is accelerating as well.  While they will continue to offer great tools, why would YT offer any financial support or incentives to professional content creators ? There just is no reason to. TrueView changed the game.

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About Mark Cuban 144 Articles

Mark Cuban is the owner of the Dallas Mavericks basketball team, billionaire internet entrepreneur, and chairman and owner of the high definition television channel HDNet.

Mark made business history when at the age of 32 he sold his computer consulting firm MicroSolutions to corporate giant CompuServe and became fabulously wealthy overnight. Cuban later did the same with yet another enterprise, the live streaming Internet operation, and sold it to Yahoo! for a record breaking price that pushed his own net worth into the billions.

He publishes his own blog at Blog Maverick where he speaks freely about basketball, technology, business, and the Internet.

Visit: Blog Maverick

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