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Youtube Strategy for the next 5 years
To figure out the strategy for the next 5 years, we need to understand the companies current position in the market and the extra jobs the user base of the youtube is trying to do (to figure out where youtube could thrive ).
Youtube Users are doing the following jobs on the platform
Listen to music
Music enthusiasts
Watching Episodes
Series Watcher
Watching Movies
Movies Watcher
Watching News
News followers
Learn a new Skill
Edtech
Youtube Markets
Music Market
OTT Market
Edtech Market
News Market
How youtube is performing in this market in comparison to the other competitors in these markets
Youtube Markets
Music Market
Soundcloud, Spotify, Savnn,
OTT Market
Netflix, PrimeVideos, Hotstar
EdTech Market
Coursera, Udemy
News Market
Bloomberg, Facebook,
GAP analysis ( Customer Satisfaction)
Low satisfaction | Medium satisfaction | High Satisfaction | |
Music Market | Soundcloud | Youtube | |
OTT Market | Youtube | Primevideos | Netflix |
Edtech Market | Youtube | Coursera | |
News Market | Youtube | Facebook News | Bloomberg |
Product Strength measured based on the factors
Strength of social media market
Market Share
Technology
Brand awareness
Customer Loyalty
Cohesiveness to the products
Gap analysis ( Product Strength in the market )
Low Strength | Medium Strength | High Strength | ||
Music Market | Soundcloud | Spotify | Youtube | |
OTT Market | Youtube | Hotstar, Primevideos | Netflix | |
Edtech Market | Youtube | CourseEra | Udemy | |
News Market | Youtube | Facebook News | Bloomberg |
Youtube does not serve its OTT Market, Edtech Market and News Market with higher customer satisfaction
Youtube has weak product strength in these markets. We need to analyze these markets to figure out the attractiveness of these markets
Before we can conclude youtube could enter into these markets, we need to analyze how attractive these markets are
Market Attractiveness
Attractiveness of the Markets
Based on competitive rivalry
Supplier Bargain
Buyer Bargain
New Entrant Threat
Threat of substitution
Total Market Size
Ability to differentiate
Market Growth
Market Cost
Rate each market based on the parameters
Positive - If factor encourages the companies to enter into the market
Negative - If factors discourage the companies to enter into the market
Neutral - If factors does not affect much to the companies
Music Market | OTT Market | Edtech Market | News Market | |
Competitive Rivalry | Positive | Positive | Positive | Positive |
Supplier Bargain | Negative | Negative | Positive | Positive |
Buyer Bargain | Negative | Negative | Positive | Negative |
New Entrant Threat | Positive | Positive | Positive | Negative |
Substitution Threat | Neutral | Negative | Negative | Negative |
Market Size | Positive | Positive | Positive | Positive |
Ability to differentiate | Positive | Negative | Positive | Neutral |
Market Growth | Positive | Positive | Positive | Positive |
Market Cost | Positive | Negative | Neutral | Neutral |
Highly attractive | Medium attractive | Highly Attractive | Medium Attractive |
Measure Youtube strength in these markets by TOWS analysis
Objective
Strength and weakness of youtube to cover OTT Market
Strength | Weakness | |
Opportunity | SO1: Use an already built customer base to adopt the youtube OTT content. | WO1: By collaborating with industry experts in the media industry, content for OTT could be created. |
Threats | ST1: Given the Google backup, youtube can minimize the supplier bargain force |
Objective
Strength and weakness of youtube to cover Edtech Market
Strength | Weakness | |
Opportunity | SO1: Use an already built customer base to adopt the youtube course content. | WO1: By collaborating with industry experts in the media industry, course content could be created |
Threats | ST1: Given the Google backup, youtube can minimize the supplier bargain force |
Recommendations
Given the fact that
Youtube users consume OTT content along with music content on the platform however unsatisfied.
Youtube does not satisfy the needs of its customer segment which is consuming OTT content.
Youtube platform has low strength in OTT Market than comparison to other competitors like Netflix, PrimeVideos
OTT Market is attractiveness and thriving
Youtube TOWS analysis shows that youtube has the strength to enter and thrive in the OTT market.
I would recommend that Youtube should enter into OTT Market
Given the fact that
Youtube has good product strength in the Music Market.
Youtube has a good market share in the music market
The music market has high competitive rivalry like Spotify
Music Market has high buyer bargain
I would recommend that Youtube should keep satisfying the needs of the current customer base.
I would like to first describe where YouTube is today and its revenue model.
Then I will present the strategy I think its best and discuss its opportunity as well as its risks.
Youtube is a platform for users to share self-created video clips and for searching and watching these clips.
Its mission statement is to give everyone a voice and show them the world.
I think the strategy for Youtube over the next five years is to focus on becoming a leading streaming service for TV, such as Netflix.
Youtube today is a very successful business for Google with about $15G in annual revenues. It is though almost entirely consumed over mobile phones and tablets and not on TV.
The TV is undergoing an inflection point these days, moving from broadcast to streaming services where people can choose what to consume. These streaming services are using the internet for transport and are also becoming more interactive. E.g. viewers can rate films etc.
The TV Ad market is a huge, un-tapped, revenue opportunity for Gooogle. Despite the strong growth in digital, web advertising, TV still has a sizable portion of the overall ad market.
The move into streaming creates an opportunity for Goolge to leverage its Youtube service and turn it into a successful streaming service.
Youtube already has a very large user base consisting of mostly young aged users from 10 to 30.
Google can also use its strong search and user preferences data to optimize Youtube viewing suggestions.
Google can also leverage its Ad technology to serve more personalized ads to feature films and series which are much more profitable. It can also use its vision technology to embed ads inside films based on the viewer's attributes. e.g. change a billboard ad,
Google can choose also to use subscription services. In fact it already does, with Youtube prime, for customers who prefer not to see ads. This has the advantage of diversifying Google revenue sources from just ads.
On the flip side, to turn Youtube into a TV streaming service, Google would have to invest in buying content and producing content. This is something which is not in its DNA. We can see that Apple and Amazon have done so too, which Google can study and improve upon.
Youtube app today is more tailored for showing short clips on phones and tablets. The app would need to be adapted for TV. Programs suggestions algorithm should be adopted for TV programs as well as browsing capabilities. Ads are designed today for short clips and need to change.
The streaming market is competitive, Netflix, Apple TV+ and Amazon Prime are strong competitors and Youtube is coming late. It can leverage though its dedicated user base and maybe focus on a streaming service for Youtube user age group 10-30 to differentiate itself from the competition. On the positive side, viewers switching costs from one service to another are low.
Google's entry into streaming and TV may also help it with gaining more information on its users, leading to more income for Google search through more targeted advertising.
To summarize, the strategy I propose for Youtube is to focus on becoming a leading streaming service. Youtube should leverage its user base and have them use it over TV for consuming TV programs. Google can leverage its strong ad technology combined with its user data to be the best at monetizing TV ads.
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