And it also has stellar position on mobile, as 25% of its total views come in from mobile devices. In 2012, YouTube turned out to be the most downloaded free app on Apple Inc. (NASDAQ:AAPL)‘s app store for devices running on iOS. In addition to YouTube, Google Inc (NASDAQ:GOOG) Maps was also a leading app in Apple’s app store, in part due to the Apple’s map fiasco. YouTube also shows ads on mobile-based devices using the TrueView format on the iPad and other gaming consoles. Android’s market share of mobile devices compared to iOS based devices along with global consumer trends should drive a lot of mobile-based revenues for YouTube down the road.
YouTube is increasingly walking into the ball-park of traditional TV by segmenting its platform into channels. In addition to the user-generated content, YouTube gets a lot of content from third-party platforms like news sites, music channels etc, and it also sells movies and TV shows on a pay-per-view basis. The video sharing site also contains large amounts of free movies, and content uploaded by users. YouTube is categorizing a portion of this content into channels based on genre, and type.
However, the main benefit of building channels comes from YouTube being able to earn more revenue on its video ads by categorizing content according to genre. This carries substantial amounts of appeal for different advertising groups. For example, a Nike ad will likely get a lot more interested users, if it is portrayed on a sporting video, as opposed to a dog on a skateboard video.
With a huge installed user-base of more than 1 Billion and the ability to provide highly targeted ads to these users using channels represents a big value proposition of YouTube for the marketers.
The number of advertisers on YouTube will grow as users tune into the Internet with more tablets, and other mobile devices. Google Inc (NASDAQ:GOOG)‘s new line of devices should also drive more traffic to YouTube’s platform and as well as on Google Inc (NASDAQ:GOOG) Play. YouTube represents a major threat for any video company and regular TV, due to its gigantic library of free and professional content. Its channel strategy and TrueView formats should aid in roping more users and more importantly, advertisers from regular TV and other online and offline media companies.
YouTube’s dominance of the online video market is increasingly becoming like Google Inc (NASDAQ:GOOG)‘s position of the search engine market. And just like the cash-generating capabilities of the search business of Google, YouTube is rapidly becoming a major cash cow in itself.
The article YouTube’s Disruptive Impact originally appeared on Fool.com and is written by Ishfaque Faruk.
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