YouTube Secures 2.5 Billion Monthly Viewers
Impacting Traditional Media Advertising Revenue Decline Including TV
As the influence of YouTube, the world's largest video platform, rapidly grows, there is an assessment that YouTubers are even dominating Hollywood, the center of the global film industry. The atmosphere is such that they are also swallowing up the advertising market, a major source of revenue for traditional media like TV.
The British weekly magazine The Economist recently reported on social media influencers, including YouTubers, appearing on traditional media such as TV, stating, "On the surface, it seems that YouTubers are struggling to enter traditional media." However, it added, "In the battle over viewers and advertising revenue, amateurs (YouTubers) are overpowering professionals (traditional media)," suggesting that YouTubers' domination of traditional media has already begun.
According to market analysis firm MoffettNathanson, the share of TV advertising in the total U.S. advertising market is expected to drop from 33% in 2019 to about 20% this year. YouTube earned $31.5 billion (approximately 42 trillion won) in advertising revenue last year. Advertising revenue, which was only $15.1 billion in 2019, has more than doubled in five years.
YouTube's strong performance is interpreted as stemming from its massive subscriber base. More than 2.5 billion people worldwide watch YouTube every month. In South Korea, statistics show that YouTube was the app Koreans used the longest over the past month. With a total of 1,956.66 million hours, it means that on average, each person watches YouTube for about 73 minutes per day.
The Economist analyzed that YouTube's influence has grown even more as videos, which were previously enjoyed only on mobile phones and PCs, can now be easily watched on TVs, leading to a direct confrontation with traditional media. According to market research firm Nielsen, actual U.S. TV viewers spend more than 10% of their viewing time watching YouTube. It was found that people spend more time on YouTube than on other platforms like Netflix.
Given this situation, YouTube content is becoming increasingly specialized like traditional media. YouTubers producing videos form teams of dozens and invest millions of dollars in production costs. The previously short video lengths are getting longer and are sometimes produced in formats similar to video programs seen on TV, such as sports or dramas.
However, The Economist pointed out that as YouTube grows larger, costs are increasing along with revenue. Over the past three years, YouTube has paid creators and video production companies an average of $23 billion (about 31 trillion won) annually. Considering that Netflix is expected to spend $15 billion on content production this year, this is a significant amount. The Economist stated, "While Hollywood studios have fixed content production costs, YouTube's revenue-sharing model means that costs increase along with advertising revenue," adding, "As social platforms like YouTube grow to Hollywood levels, they are incurring blockbuster-level costs."
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