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YouTube Tops 1 Billion Hours a Day: Can It Pass TV?

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YouTube looks to take down television as the most watched format in the U.S. The Wall Street Journal reported users worldwide are watching more than one billion hours of videos a day on the online video platform.

The one billion hours is partially the result of the artificial intelligence that is used to recommend videos and keep people tuned in. The number of hours watched has increased 10-fold since 2012, when YouTube started building algorithms that look into user data to give each user a personalized lineup of videos.

Currently, TV still holds the title as the most watched platform in the U.S. with 1.25 billion hours people spent watching each day, while TV also beat YouTube and other online streaming services in revenue generated from ads. YouTube may not be far off on the hours but it still has a long way to go on revenue.

The content on the website is generated by users all around the world, professional or not. These users are uploading 400 hours of video each minute, or 65 years of video a day to YouTube.

YouTube Profits?

It is not clear how much money YouTube is generating for Alphabet Inc. (GOOGL - Free Report) The Wall Street Journal reported in 2015 that YouTube generated about $4 billion in 2014 and that division is “roughly break-even.”

The video-sharing website makes most of its revenue by running ads before videos; however, it is not enough when taking the heavy cost of technology and rights to content into account. YouTube struggles to expand its core audience beyond teens and to gain users that visit YouTube.com daily instead of coming from other websites from links or embedded videos. The company relies on popular videos, music videos and content created by the users to gain traffic. YouTube’s content tends to attract only a few population groups; as a result, not all companies are willing to pay for ads on YouTube, even when YouTube has one billion hours watched.

While YouTube focuses on the content that its users put out, competitors like Amazon.com Inc. (AMZN - Free Report) and Netflix Inc. (NFLX - Free Report) focus on licensing Hollywood-produced content and creating original programmingto attract a wide range of audiences.

Next Steps

However, the new deal between Alphabet Inc.and Comcast Corp. (CMCSA - Free Report) might increase the traffic on YouTube. On Monday, YouTube and Comcast announced that Comcast customers with the latest gear would be able to search and watch YouTube videos through their cable boxes.

Google also helps YouTube tremendously in gaining new viewers with its enormous reach on the Internet. YouTube videos are embedded in search results and Google pre-installs the YouTube app on its Android software. The website is also starting to secure rights to sports videos and shows for children.

On Tuesday, YouTube announced YouTube TV, their service to disrupt traditional cable providers. For $35 per month, users will be able to stream major broadcast networks like CBS, ABC, NBC and FOX. Users will still get YouTube’s original programming and sports networks like ESPN.

“Millennial love great TV content, but they don’t want to watch it in the traditional setting,” said Susan Wojcicki, YouTube CEO at YouTube TV’s launch event.

While YouTube is on pace to surpass TV in hours spent watching in the U.S., the company also focuses on their algorithms and software in identifying and catering the needs of their audiences. By expanding in this regard and working on their targeting, YouTube can become America’s favorite visual platform.


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