Company / division: YouTube
Variety has a quick run-down of some new data from App Annie about the usage of various mobile video apps in the twelve months to July 2017, and it shows YouTube to be dominant in that category, with 80% of total time spent for the top 10 apps. Also notable is that YouTube grossed more than Hulu on the strength of its YouTube Red subscription service, suggesting that it may be doing better than widely perceived, though that may also reflect YouTube’s role as a more mobile-centric platform while many users may pay for their Hulu subscriptions through a computer or TV box. Also worth noting is that over half the top ten video apps come from non-traditional TV brands – only HBO, Starz, CBS, and Showtime hit the top ten, while the rest are all digital-native brands. Also notable is the fact that all of those traditional TV apps have pursued the same successful strategy of opening up their entire libraries for digital rather than trying to create a digital service that’s complementary to traditional TV – that’s the winning strategy in this space, and Disney should take note as it readies an ESPN direct to consumer service for early next year.
Facebook and Google Dominate Top 10 US Apps List (Aug 24, 2017)
Alphabet announced its Q2 2017 earnings this afternoon, and beat analysts’ estimates of revenue and earnings pretty handily, yet its stock still fell 3% in the first couple of hours afterwards, presumably because the stock has been bid up so much in recent weeks and there’s some profit taking going on. The results were pretty strong across the board, with no area of performance looking weak. The core Google business continues to grow rapidly, with the same three drivers – mobile, YouTube, and programmatic – cited once again, suggesting there’s still been no material longer term fallout at Google from the boycott against it earlier this year or the programmatic cutbacks that have followed. It’s clear that Google is investing heavily in its cloud infrastructure and personnel – CFO Ruth Porat said on the call that many of the 1600 new hires this quarter were once again directed at that part of its business. That business is still frustratingly buried in the broader Google “Other” segment along with disparate bits and pieces like Google Play and hardware revenues, so it’s impossible to parse precisely, but it’s likely that the growth of cloud services is a big contributor to overall growth in that segment. But hardware was also called out, though only Google Home and Google WiFi were called out specifically, suggesting Pixel sales are no longer such a big driver. My own recent surveys suggest Google Home in particular is selling well, taking about half the share that Amazon Echo does, with almost no other competitors in the market. The Other Bets continue to shrink their still massive losses, mostly by growing revenue faster, though the company has also reduced its capital expenditures significantly since the Google Fiber retrenchment began in late October last year. Alphabet did account for the EU fine, which it has not yet decided to pay, in its financials, but also provided a version of its profit figures which was more easily comparable with last year’s, and those showed strong growth in both revenues and profits. At this point, it’s hard to see a near-term reason for bearishness about Google or the broader Alphabet business – it now has several separate lines running well and throwing off decent profits, while it’s investing in others that should drive both in future. The one other thing worth noting, though, is that traffic acquisition costs for Google’s own sites continue to rise rapidly, with the rise driven by the payouts Google has to make to mobile vendors who send traffic its way, including Apple, Samsung, and to a lesser extent other Android vendors. That certainly doesn’t seem to be affecting profits yet, but it’s a sign of the increasing share of revenue Google is having to pay out to companies that control much of the traffic that comes its way on mobile.
YouTube TV Adds 10 New Markets with Local Channels (Jul 20, 2017)
YouTube Makes Series of Announcements at VidCon (Jun 23, 2017)
Some YouTube Advertisers Still Staying Away (Jun 21, 2017)
Streaming Music Boosts Indie Label Payouts by 52% (Jun 8, 2017)
Back in December, four big US Internet companies signed a voluntary code of conduct with the EU under which they agreed to improve and accelerate the removal of hate speech from their platforms. Now, the EU is reporting good progress on those goals, with twice as high a percent of offending content removed, and Facebook and Twitter removing substantially more content within the first 24 hours, while YouTube slipped a little in this regard for reasons that aren’t clear. As Facebook has discovered, policing content is an expensive and labor-intensive task at the best of times, but having external standards set like this raises the stakes even further. The big risk in the EU and specific European countries is that this moves from voluntary codes of conduct to actual laws with significant consequences for non-compliance, so the big US companies are wise to do what they can to play nicely to try to ward off such outcomes.
Some UK Advertisers Still Staying Off YouTube (May 12, 2017)
As a reminder, the boycott of YouTube and Google which began a couple of months ago kicked off in the UK, where some high-profile press coverage of major brands’ ads showing up next to undesirable content caused some brands to pull their advertising from YouTube and in some cases Google’s other platforms. Although the hubbub over the boycott both there and here seems to have died down considerably, especially after Alphabet itself played down the impact in its recent earnings call, there are still advertisers which are staying off Google’s platforms in the UK. This article lists several ongoing holdouts including Channel 4, Marks & Spencer, Toyota, Tesco, and Pepsi, while others including McDonalds and RBS have returned. The quotes from marketers in the article makes clear that this is still about more than just dodgy content and extends to other frustrations advertisers have with online ad platforms, and that they’re using the boycott as a way to apply pressure to achieve those other aims.
via Marketing Week
YouTube and Netflix Dominate Teens’ Video Viewing (May 2, 2017)
Alphabet was the third of the big three tech companies to report earnings today, and one of two (along with Amazon) which saw a very favorable response from the market to better than expected results. Its growth was strong once again off the back of ongoing positive ad revenue trends and a second straight quarter of strong growth in Other revenue in the Google segment, which includes its hardware sales. However, whereas Q4 saw something like $600-700 million in hardware sales, Q1 saw a much smaller bump from hardware – likely around $300 million. Other Bets revenue – mostly from Nest, Fiber, and Verily – continued to grow rapidly (47% year on year) though losses also grew. Google’s traffic acquisition costs continue to rise fairly rapidly due to the increased payments Google has to make for mobile search traffic acquisition (notably on the iPhone) – it rose from 8.5% of revenue from Google’s own sites to 10.4% in one year. Meanwhile, clicks or their equivalents on ads on Google’s own sites continue to rise rapidly, while the cost-per-click continues to fall due to the rise of mobile and video advertising. So far, the former is more than offsetting the latter, and there’s no indication just yet that there’s an end in sight. But Google’s own sites now contribute over 80% of total ad revenue, while third party websites running Google ads are down below 20% and the gap between the two continues to widen as Google continues to be far more successful driving growth on its own sites. That’s a reflection both of a deliberate strategy – Google’s margins on its own sites are much higher – but also of the broader trend away from traditional desktop display ads and towards mobile, search, and native advertising.