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YouTube revives its television business. Watch out, Roku and Tubi

March 23, 2022, 5:54 PM UTC

A heavyweight just re-entered the streaming wars, with the potential to knock out some promising young fighters.

YouTube announced Wednesday that it will now host free, ad-supported TV shows on its platform for U.S. viewers, aiming for a cut of a fast-growing, multibillion-dollar entertainment sector. The move comes two years after YouTube stopped producing TV series for its subscription service, YouTube Premium, and mere months after it killed off its original content division.

More than 4,000 TV episodes are now available on YouTube in a dedicated section of the site, with plans to add thousands more in the coming months. The offering is separate from its YouTube TV package, which carries traditional network and cable channels for a monthly fee.

For now, YouTube’s free TV selection leaves very much to be desired. Series earning top billing include second-rate reality shows (Hell’s Kitchen, Scream Queens), Canadian semi-hits (Heartland, Sanctuary), and dusty classics (Father Knows Best, Unsolved Mysteries).

But while the move certainly smacks of YouTube once again lurching around the streaming television space, its re-entry actually holds some promise.

After dominating the streaming wars for the better part of a decade, subscription-based services such as Netflix and Amazon Prime are finally losing a bit of ground to competitors that offer free TV with advertising. 

Kantar, a leading media analytics firm, reported in January that 18% of American households used a free, ad-supported television (FAST) service in 2021, up from 8% in 2020. The most popular FAST outlets included Peacock, IMDB TV, Tubi, and Roku Channel.

“In overall streaming, being able to watch without ads is a declining driver of sign up, signaling that ad-based platforms will continue to benefit,” Nicole Sangari, Kantar’s vice-president of entertainment on demand, wrote at the time. “If FAST continues this content forward approach, expect the category to chip away at screen time of paid competitors and potentially even drive churn of paid competitors.”

As YouTube looks to catch up to its ad-supported streaming rivals and capitalize on growing FAST interest, the Google division also offers something that most of its competitors can’t: superior targeted ad capabilities. It’s easy to envision streaming advertisers flocking to well-established YouTube, which generated $29 billion in ad revenue last year, over a company like Roku, which is still building out a newer advertising ecosystem.

On a simpler level, YouTube also benefits from its ubiquity. As Tubi (51 million active users) and Roku (60 million active users) fight for downloads of their streaming apps, YouTube already boasts more than 2 billion users worldwide. About 135 million people accessed YouTube on their internet-connected televisions alone in the U.S. in December 2021, Variety reported, citing Nielsen data.

To gain a foothold in the fight for viewers, YouTube will need to bolster its disappointing library, which will mean ponying up for more expensive content or reviving its original productions. As it stands, all of its competitors (Peacock and IMDB TV, in particular) offer superior shows—albeit nothing compared to top subscription streamers.  

YouTube’s advertising might and deep pockets could prove enticing to rights holders looking to offload content. But after abandoning its television ambitions in the past, YouTube’s success or failure in this new television foray could come down to its level of commitment to winning this battle.

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Jacob Carpenter

NEWSWORTHY

Containing the damage. Online authentication company Okta said Tuesday that a January cyberattack by the hacking collective Lapsus$ impacted no more than 366 of the firm’s 15,000-plus business clients, which rely on the firm to manage digital passwords, Reuters reported. Okta officials added that Lapsus$ did not gain access to downloadable databases or company source code, though the hackers claimed Okta understated the scope of the breach. Okta’s chief security officer said the hack stemmed from a cyberattack on an outside contractor’s employee. Lapsus$ hackers have posted data and screenshots in the past few months showing breaches of systems run by Nvidia, Microsoft, and Samsung.

Off and sprinting. Venture capitalist Katie Haun announced Tuesday that she has raised $1.5 billion for her new Web3-centered firm, a record haul for a solo female founding partner, Bloomberg reported. The disclosure comes four months after Haun left venture capital giant Andreessen Horowitz, where she co-founded and jointly led the firm’s multibillion-dollar funds investing in blockchain-based startups. In a separate announcement, Yuga Labs, the company best known for its Bored Ape Yacht Club non-fungible token collection, said it has raised $450 million in a funding round that values the company at $4 billion, CoinDesk reported.

Taking their medicine. Tencent executives signaled Wednesday that they will fall in line with China’s crackdown on tech giants’ power, even as the company reported its lowest-ever quarterly revenue growth increase, Bloomberg reported. Tencent president Martin Lau said the firm is “proactively embracing changes to better align ourselves with the new industry paradigm,” comments that follow an increase in audits, investigations, and fines levied against China’s largest tech companies by the republic’s regulators. The sprawling tech conglomerate reported an 8% year-over-year growth in quarterly revenue, slightly below analyst estimates. 

Sure you didn't mean Credit Karma? Apple has acquired Credit Kudos, a small UK-based banking and lending startup, in a deal potentially valued at about $150 million, The Block reported Wednesday, citing sources familiar with the transaction. Credit Kudos, founded in 2015, helps lenders make better and faster loan decisions by drawing on bank data to analyze risk. Apple has not commented on the reason for the acquisition, though it launched a credit card and accompanying consumer-focused financial tools in the past few years.

FOOD FOR THOUGHT

A costly doctor’s visit. Hackers had a grand old time getting access to your medical records in 2021. A Politico analysis of federal data showed nearly 50 million people in the U.S. had their private medical info stolen last year, with residents of Florida, Nevada, New Mexico, and Wisconsin hit the hardest. Hackers treasure medical records because they can be used to file fraudulent Medicare claims and glean personal information for stealing identities. Cyber crooks also can sell records on the dark web to fellow fraudsters who carry out the financial crimes.

From the article

The widespread unauthorized access of this data raises significant privacy and security concerns for consumers and the industry — costing billions every year — and highlights some of the potential consequences as health care modernizes and information flows more seamlessly. …

“Unfortunately, the industry is pretty much easy pickings, and they’re hitting it because they’re getting paid,” said Mac McMillan, CEO of cybersecurity company CynergisTek. “It’s [not] gonna slow down until we either get more serious about stopping it, or blocking it, or being more effective at it. From the cybercriminals’ perspective, they’re being successful, they’re getting paid, why would they stop?”

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BEFORE YOU GO

A calming influencer. That random video of a babbling brook or serene sunset in your social media feed apparently has a name: “digital resting point.” As The Washington Post reported Tuesday, content creators and doomscrollers alike are gravitating toward these momentary online off-ramps that let users take a break from the barrage of politics and pop culture. The breaks are most often seen on Instagram and TikTok, where aesthetically pleasing images and videos flourish. If these intermissions don’t work for you, there’s always another option: put down the dang phone. 

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