Youtube doesn’t have a large competitor challenging it for market share like other major companies do. There are plenty of streaming services, but YouTube is the only game in town when it comes to people generally browsing video content and following their favorite creators.
Coca-Cola has Pepsi. McDonald’s has Burger King. Toyota has Honda. Why doesn’t YouTube have one?
In: Economics
YouTube is only financially viable because it is piggy backed in Google’s Adsense stack and infrastructure.
Building an YouTube direct analogue is just way too expensive for anyone else to do it.
YouTube is insanely expensive and data intensive to run and it doesn’t make Google much money despite that. The vast majority of YouTube content is worthless commercially and people are constantly evading ads when not ignoring them.
As an independent entity, YouTube was certainly going to go bust.
I’d like to suggest that there is competition, just not in the way you think.
TikTok and Instagram are basically the next gen of video entertainment (*sigh*).
Evidently reels exist in all three apps despite YouTube being very different from them.
Videos takes up a lot more data compare to other forms of media, so streaming them, whether live or just browsing, is very expensive. For all the shit people have been giving to Youtube, they actually have some of the most sophisticated video streaming infrastructure, with good servers running at competitive cost. This essentially kills competition from smaller startups.
For other giants that wish to break into this space, they also need to having proper monetization scheme so the creators would go professional and not just treat it as a hobby. In this regard Google is far, far ahead of everyone else, even in adjacent industries; streaming is usually subsidized by a parent company (Amazon for Twitch, Stake for Kick), while short form sites opt to simply not pay their creators. There’s a reason why Tiktokers with a large following often migrate to Youtube shorts, but rarely the other way around. So for long form videos, no one is able to compete.
YouTube has plenty of direct competitors for its actual business, which is getting the attention of consumers and selling that attention to advertisers. Their top competitors are Instagram and Tik Tok.
Youtube doesn’t even know what to do with me and just recommends videos I’ve already watched
Three reasons, which you have to look at combined together:
1) Hosting high quality web video is extremely expensive, in both storage and bandwidth. You need a huge amount of money to even get started hosting something that’s remotely close to YouTube in terms of size and quality – there are only a few dozen companies around that could physically afford to do it – Alphabet, Google’s parent company, is the 18th highest grossing company in the *entire world*.
2) In order to make it worthwhile, you have to drag both creators and viewers away from YouTube. Creators won’t move until there’s enough viewers/ad revenue to make it worth it, and viewers won’t move until there’s content they want to watch, so the process is cyclical – not enough viewers is caused by not enough creators, and not enough creators is caused by not enough viewers.
3) You have to do all of the above, while still being at least as good, and ideally better, than YouTube for creators and viewers. That’s really hard, and probably going to be expensive, further compounding the above problem.
YouTube had the benefit of growing from nothing in a world where YouTube didn’t exist yet. The fact that YT started off tiny, and the videos started off potato quality didn’t matter, because very few other places on the internet were doing what they were doing – it was new technology.
We now exist in a post-YT world, where the idea of high quality internet videos is no longer either exciting or special, so any potential platform that wants to compete with them has to offer *more* than that.
There are rivals in China such as Bilibili, and before that Tudou was super-popular there. However, they never became popular in other countries.
It’s not worth the effort.
Too expensive to build, even if you succeed you have to convince people to use it.
There are 2 ways to make money as a streaming service ads or subscriptions.
If you do ads you are just YouTube with less leverage and smaller userbase. People also hate ads and use of adblockers is common and so this is just not worth the investment.
So everyone does a subscription service. You get a smaller community and less content, but more money.
YouTube is like a full service restaurant while IG, TikTok etc are fast food.. So it’s more of a stratification of the same market versus head to head.
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