YouTube rolls out major TV app overhaul to strengthen position in streaming wars

The news: YouTube announced the launch of a major update to its connected TV app at this week’s Made On YouTube event, where the platform also unveiled new creator tools.

The overhaul aims to improve the viewing experience by adding features in line with traditional streaming services like Netflix and Disney+.

• Creators can organize content into episodes and seasons, mimicking how viewers navigate subscription platforms. YouTube is also adding "immersive previews," with automatically playing trailers similar to Netflix, aligning it more with traditional video-on-demand services.
• While videos are playing, the updated TV app will feature a more prominent subscribe button, as well as QR codes generated from links in video descriptions, in a bid to increase subscribers and engagement.

Creators on your TV: YouTube is seeing significant growth in creators earning most of their revenues via CTV, with a 30% year-over-year increase, per a company blog post. Over the past three years, top creators have seen a 400% increase in watch time on TV screens, indicating a major shift toward TV as a critical platform for content consumption.

• The new features, aimed at improving subscription rates and engagement through TV, could further boost monetization for both creators and YouTube. Advertisers are willing to pay premium rates to reach audiences on TV screens.
• By organizing videos into episodes and seasons, YouTube is positioning itself to attract more long-form content creators and binge-watching audiences, emulating the experience on major streaming platforms. This could broaden its appeal and increase viewer retention on TV.
• YouTube's focus on UGC keeps production costs low while maintaining profitability through ads, without the expense of original content creation. It requires less revenue per video to succeed due to these lower costs.

The competitive landscape: As of August 2024, YouTube accounted for 10.6% of all streaming on connected TV devices, surpassing Netflix (7.9%) and Prime Video (3.1%), according to Nielsen data. YouTube has held the top spot on Nielsen's Gauge report for 16 consecutive months.

Our take: As it continues to make major inroads in turning connected TVs into a key consumption vehicle, YouTube's TV app updates position it as a strong competitor to streaming giants like Netflix—while maintaining a key advantage against other UGC players like TikTok and Meta, who don’t dominate the living room nearly as much.