YouTube recently announced that it would launch a TV service with 40+ broadcast channels for $35 a month. However, another announcement could be more important for YouTube and the pay TV industry. Comcast announced that it would make YouTube available on X1 set-top boxes to the 10+M homes with Xfinity TV service.
Here 5 reasons both Comcast and YouTube benefit from the integration, and two problems it doesn’t help with at all.
Being on X1 a good deal for YouTube
No engagement like TV
According to Nielsen data smartphone video viewers spent 51 minutes a week watching video on their device in Q2 2016. Connected TV viewers spent more than that everyday watching online video through their TV connected device of choice. When your business is driven by ad views, the television is hands-down the best platform to be viewed on. And Comcast X1 set-top boxes delivers.
Increases TV reach
Google’s Chromecast had sold 30M worldwide by the middle of 2016. However, that translates into just 6% of U.S. households. It’s also unclear how many of those devices are used on a regular basis. One thing is certain: virtually all of Comcast’s X1 set-top boxes are used daily by Xfinity TV subscribers. And signs are that those users are embracing online video through the device. Comcast reports that 30% of X1 customers are using Netflix on the set-top box just 90 days after the release of the app on the box.
Having YouTube on X1 a good deal for Comcast
Search for a clip, watch a movie
YouTube is a favored place by consumers to watch movie trailers. However, there is a danger if a consumer watches a movie trailer on their smartphone, they may rent or buy the movie from Google Play or another online store. Comcast has specifically integrated X1 voice search to work with movie trailers. This makes it as easy to search and watch that trailer on TV as on the phone. All an X1 customer needs to do is grab the X1 remote and say “YouTube, find ‘The LEGO Movie trailer.” And then it’s one quick search to rent the movie from Comcast’s On-Demand system.
Bowing to the inevitable
In 2014, nScreenMedia found that 92% of U.S. broadband users watched YouTube video, while only 78% reported using pay TV. YouTube says that it reaches more adults than any TV network. The company also claims that viewing of its videos already makes up over half of people’s time watching online video on television. Having customers stay within the Xfinity experience to watch YouTube videos is a better for Comcast than letting them flip to a Roku of Chromecast.
YouTube and Comcast still not the perfect match
There are some things the pairing of YouTube with X1 just can’t fix. Google says that 92% of YouTube viewers watch YouTube on their smartphone while at home. Integration into the X1 set-top might reduce that activity some, but it will remain a common behavior in X1 homes.
Worse still, it’s not going to have a beneficial impact on people watching YouTube during the ad breaks. YouTube says two-thirds of people pick up another device during the ad breaks. Virtually no-one is going to flip to the YouTube app on X1 during the commercial break. To do so would risk missing some of the show they are currently watching.
Why it matters
Everyone is focused on the YouTube TV virtual MVPD announcement.
However, YouTube on X1 set-top boxes could have far greater impact.
The integration benefits both companies, but challenges remain.