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3 Threats to YouTube's Dominance

By Stephen Lovely – Jun 20, 2020 at 3:12PM

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YouTube is on top of its niche, but it has competition.

YouTube had a head start in streaming. The service was founded in the mid-2000s and hit the big time when it was acquired by tech giant Google -- now called Alphabet (GOOG 0.23%) (GOOGL 0.33%) -- in 2006. YouTube was here before services like Netflix's streaming service and Disney's Hulu. It was also, from the start, different. While some of the best-known streaming giants focus on professionally made TV and movie content, YouTube was made to host user-uploaded content.

YouTube now has a live TV service (YouTube TV) as well as professionally made content. But its user-generated content and self-made stars remain a huge draw, especially to younger viewers. YouTube has a stunning 2 billion active monthly users. The service enjoys massive popularity on mobile and computer screens, and it's fast improving its presence on TV screens: YouTube viewers logged an average of 250 million hours per day as of March of last year, a figure that should catch the attention of TV-focused streaming competitors like Netflix. But none of this means that YouTube is invulnerable. Here are a few rivals with their sights set on one or more of YouTube's big areas of focus.

A streaming video icon

Image source: Getty Images.


YouTube's user-generated content comes in all forms and at all levels of production. In fact, the big budgets and massive popularity of some YouTube stars make it clear that they are professionals, blurring the line between TV, film, and "user-generated" independent content. But some of its most popular content is fairly simple. A video capture card, a webcam, and a video game to play is just about all a user really needs in order to create a "let's play" video. Watching other people play video games has long been a big deal on YouTube, and the service's single biggest star, PewDiePie, built his career in this genre.

But if PewDiePie got his start today instead of in 2010, what platform would he use? There's an argument to be made that it would be Twitch, the video game-focused streaming platform owned by Amazon (AMZN -1.16%). Twitch enjoys massive popularity with users, and it's benefiting from a surge in viewership during the COVID-19 pandemic: Its viewership shot up 23% in March when widespread lockdowns reached the United States. Twitch is after video game video content, and that's a pretty significant genre for YouTube to defend.

YouTube has also had a lot of success during the COVID-19 pandemic, and it retains an edge in that it's more focused on on-demand videos (Twitch streamers and viewers favor live broadcasts). YouTube does offer the ability to stream videos live, and it can easily be seen as a huge threat to Twitch -- something Quartz explored in detail earlier this year. The best way for YouTube to strike back would be to lure top streamers away from the platform, as Microsoft's Mixer did with streaming mega-star Tyler "Ninja" Blevins. And in fact, that's just what YouTube is doing: YouTube poached Twitch star Rachel "Valkyrae" Hofstetter earlier this year.


Reminiscent of Twitter's short-lived Vine platform, TikTok is a micro-vlogging platform with a fast-moving, social media-like feed of user-generated videos. It's very different from YouTube in some ways. The videos are very short, for example, and the never-ending scrolling feed of auto-playing videos feels more like Facebook than like YouTube.

But TikTok does have certain things in common with YouTube. It relies on user-generated and user-uploaded content, for one. And while it is similar to Facebook and other social media platforms in some ways, it builds stars in a way that is arguably more reminiscent of YouTube (with its video entertainers) than Instagram (with its glamorous influencers), though TikTok certainly has both content-creating stars and hip influencers.

Perhaps most importantly, TikTok is killing it with YouTube's best demographics. YouTube owes a lot of its success to its popularity with younger viewers. It's not that hard to imagine YouTube-style content overtaking traditional TV as YouTube's biggest fans age into adulthood. But another possibility is that YouTube simply ages into permanent un-coolness, while TikTok becomes the next big thing. More than half of all TikTok users are between the ages of 16 and 24, and many are younger still.

There are no guarantees either way. TikTok could just as easily be seeing a short-term explosion similar (in spirit if not scale) to the one that Snapchat had. Even if TikTok falls short, there are rewards even for waning platforms and extremely un-hip ones (Facebook is still king, after all, even though Mom and Dad are on it). But it's still something worth thinking about: How much of YouTube's audience can TikTok take away, and how permanent would such a shift be?

YouTube is clearly feeling the heat. The company is reportedly working on a spin-off product called "Shorts" that will compete directly with TikTok.

Facebook (and Instagram)

YouTube is relatively unique among streaming services, and the ways in which it is unique invite comparisons to social media. That's part of why TikTok looks like a threat to YouTube, and it's also why YouTube will also need to fend off Facebook. Facebook, and its image-and-video service Instagram, have long eyed videos in general and live broadcasts in particular as an important growth area.

Facebook has even looked at professional broadcasts and live TV; exclusive Major League Baseball (MLB) games, among other broadcasts, have hit the platform. Social media rival Twitter has done the same. YouTube is battling the social media companies on this front, too. YouTube has at times been the high bidder for these live streaming broadcasts of professional sports. YouTube also has an entire live TV "skinny bundle" service called YouTube TV, something that could fill an article on its own but deserves mention here. And while interest in sports, in particular, seemed to have waned a bit in 2019 relative to 2018 and 2017, it's hard to say if that's a permanent change.

Facebook doesn't have YouTube's history or its video viewership, but Facebook has the advantage of the social media feed, which sticks user-made videos in front of Facebook users. Auto-playing videos turn Facebook's formidable user base into an instant audience.

It's a problem that helps illustrate YouTube's enviable yet difficult spot. How can a service fend off competitors from so many different areas at once? Some of YouTube's usurpers are social media sites, others vlogging platforms, and still others sports and e-sports broadcasters. It's a lot for YouTube to handle, but it's also a sign of just how strong the service is right now.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Stephen Lovely owns shares of Amazon, Facebook, and Netflix. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Facebook, Microsoft, Netflix, Twitter, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short July 2020 $115 calls on Walt Disney. The Motley Fool has a disclosure policy.

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