YouTube is making significant investments in its app with a focus on delivering a best-in-class experience to streamers who are increasingly watching both long-form and short-form content on the biggest screen in the house, its chief executive said at an investor event on Thursday.
Speaking at the inaugural MoffettNathanson Technology, Media and Telecom Conference, YouTube CEO Neal Mohan said the Alphabet-owned service has seen an explosive growth in consumption of its videos on big-screens in living rooms both domestically and overseas, in part because a new generation of TV viewers grew up with the service and naturally gravitate toward it.
"Young viewers, when they turn on the TV, they're turning on YouTube," Mohan affirmed. "And when they turn on YouTube, they want all of their content in one place...their favorite movies, live sports. And that's the power of our presence in the living room, and that's what powers our service."
Mohan said the number of users regularly engaged with YouTube on their living room TVs has grown to 150 million, and the trend is replicated in overseas markets, where YouTube for years has provided a platform for live sports and other content in addition to its user-generated videos.
The shift toward living room TVs doesn't necessarily mean consumers are viewing less YouTube content on their phones and tablets, but it does mean YouTube needs to become more focused on delivering a good, if not better, experience on the biggest screen in the home.
"We're trying to bring the full magic of the YouTube product that people know and love on their mobile products to the living room," Mohan said. "So that means interactivity, that means all of our formats, that means our advertising products."
One format that has worked particularly well on TVs is YouTube Shorts, the platform's attempt to replicate short-form, vertical-shot video content that exploded in popularity thanks to rival TikTok. It seems unusual that viewers would want to watch vertical videos on a screen that is horizontal, but Mohan said a version of its Shorts app specifically designed for the living room was a "sleeper hit" when it launched last year.
YouTube is also re-tooling some of its advertising products for the big screen: During its upfronts presentation called Brandcast on Wednesday, YouTube executives revealed the service will soon add 30-second, unskippable ads across some of its most-popular content. Those ads are intended to replicate the type of inventory found on broadcast and cable television, and they could allow advertisers to repurpose their TV spots on YouTube.
Figuring out how to attract advertisers is a top priority at YouTube, which has logged ad revenue declines over several consecutive quarters. In April, parent company Alphabet revealed YouTube brought in $6.7 billion in revenue during the first three months of the year — which includes income from its YouTube Music, YouTube Premium and YouTube TV divisions — a 15% decline from the previous quarter and a 2% year-over-year dip.
But Mohan is convinced that YouTube's worst days in terms of ad revenue declines could be behind them, and says investing in things like YouTube Shorts and bolstering YouTube features for living room TVs is good for creators, users and advertisers alike.
"If we do that, that's what creates this incredibly vibrant ecosystem that brings the fans to the platform, and that's incredibly attractive, that engaged reach is incredibly attractive to advertisers," Mohan said.
YouTube TV focused on features
Consumption in living rooms is also one reason why YouTube has pushed forward with YouTube TV, its virtual MVPD streaming cable television replacement that offers around 80 linear broadcast and cable channels.
Mohan said YouTube was in a prime position to innovate around the live TV experience, bringing viewers things like key stats from in-progress sports games to an unlimited cloud DVR where they can store as many movies and TV shows as they want.
It seems to be working: Despite YouTube TV raising prices steadily over the last few years (at launch, it cost $35 a month; today, that price has jumped to $73 a month), TV fans have flocked to the service. Mohan said YouTube TV has "5 million-plus subscribers," making it the most-dominant streaming cable replacement in the country.
When asked if YouTube TV would consider a "skinny bundle" of just news and sports channels, Mohan demurred, arguing that YouTube TV's programming strategy is largely based on subscriber feedback.
"We're really happy with our channel lineup," Mohan said. "It has grown over the years and that is in response to the direct feedback from customers on YouTube TV."
Mohan suggested YouTube TV isn't thinking so much about programming as it is about ways to launch new features that add value to the service. To that end, YouTube is just a few months away from offering the NFL Sunday Ticket package to subscribers (which can also be purchased as an à la carte option through YouTube without a TV subscription), which will also see the service roll-out a much-anticipated multi-view feature that was teased during the recent March Madness tournament.