How would you develop the strategy for YouTube for the next 5 years?

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How would you develop the strategy for YouTube for the next 5 years?

Asked at Google over a year ago

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Amit Aggarwal · Answer 1 · 2020-05-18T11:26:38+0000

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
1. Music enthusiasts
Watching Episodes
1. Series Watcher
Watching Movies
1. Movies Watcher
Watching News
1. News followers
Learn a new Skill
1. 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
1. Soundcloud, Spotify, Savnn,
OTT Market
1. Netflix, PrimeVideos, Hotstar
EdTech Market
1. Coursera, Udemy
News Market
1. Bloomberg, Facebook,

GAP analysis ( Customer Satisfaction)

	Low satisfaction	Medium satisfaction	High Satisfaction
Music Market		Soundcloud	Youtube Spotify
OTT Market	Youtube	Primevideos	Netflix Hot star
Edtech Market	Youtube		Coursera Udemy
News Market	Youtube	Facebook News	Bloomberg

Product Strength measured based on the factors

Strength of social media market
1. Market Share
2. Technology
3. Brand awareness
4. Customer Loyalty
5. 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
1. Based on competitive rivalry
2. Supplier Bargain
3. Buyer Bargain
4. New Entrant Threat
5. Threat of substitution
6. Total Market Size
7. Ability to differentiate
8. Market Growth
9. 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 1. Brand awareness 2. Huge customer base 3. Technology 4. Global Presence 5. Presence in the similar domain 6. Backed by Google	Weakness 1. Not in the content creation 2. Never in the market where supplier bargain is high
Opportunity 1. Thriving Market 2. Premium Market 3. Sparse Competition 4. Higher Customer Satisfaction on the same platform 5. Collaboration with Media Industry	SO1: Use an already built customer base to adopt the youtube OTT content. SO2: Having Music and OTT content on the same platform would lead to higher customer satisfaction	WO1: By collaborating with industry experts in the media industry, content for OTT could be created.

Threats 1. Supplier Bargain force is higher 2. Difficult to differentiate 3. Market Cost is high 4. Easy substitution	ST1: Given the Google backup, youtube can minimize the supplier bargain force ST2: Given the technological expert, youtube can differentiate the product in terms of quality ST3: Backed by Google, Youtube would be able to sustain the high cost of the market

Objective

Strength and weakness of youtube to cover Edtech Market

	Strength 1. Brand awareness 2. Huge customer base 3. Technology 4. Global Presence 5. Google has ventured into the edtech domain. 6. Backed by Google	Weakness 1. Not in the content creation 2. Never in the market where supplier bargain is high
Opportunity 1. Thriving Market 2. Premium Market 3. Sparse Competition 4. Higher Customer Satisfaction on the same platform 5. Collaboration with faculties of the Industry	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 1. Supplier Bargain force is higher 2. Difficult to differentiate 3. Market Cost is high 4. Easy substitution	ST1: Given the Google backup, youtube can minimize the supplier bargain force ST2: Given the technological expert, youtube can differentiate the product in terms of quality ST3: Backed by Google, Youtube would be able to sustain the high cost of the market

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.

Avi Grabinsky · Answer 2 · 2020-04-09T15:13:52+0000

The question is clear, and I have no clarifications needed.

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.