AYESHA RASCOE, HOST:
Nielsen, the company that traditionally tracked broadcast viewership, now also includes streaming services in its rankings. Its July report was released earlier this month. And topping the list of TV viewing in the U.S. - it wasn't NBC and Peacock with the Olympics.
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RASCOE: And nah, it wasn't Netflix, even though it did have a "Beverly Hills Cop" making a comeback that month.
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RASCOE: And it wasn't even Disney, which owns Marvel and has so many outlets - Disney+, ABC, ESPN.
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CHRIS EVANS: (As Steve Rogers) This is the fight of our lives. And we're going to win.
RASCOE: For the first time, it was YouTube. Lucas Shaw covers Hollywood for Bloomberg and writes the newsletter Screentime. Thanks for coming on.
LUCAS SHAW: Thanks for having me.
RASCOE: So put this in perspective. What does it mean to have a streaming-only service, YouTube, top the list of how folks in the U.S. watch TV for a month?
SHAW: Well, it speaks to a really dramatic shift in television over the last five or 10 years. When YouTube started, most people were watching it on their laptops. Then over time, they were watching it a lot on their phones, and that still happens. But YouTube has made television a huge priority over the last few years because it wants to capture as much of those advertising dollars that go into the TV business.
And it has successfully gotten millions and millions of people to watch YouTube on a TV, and that's everything from cat videos and highlights to vloggers to all these other things. And it's seen a steady increase from being sort of a second-tier player to now being bigger than every other media company. It's really astounding when you consider, you know, how much that companies like Disney and NBC Universal own.
RASCOE: I mean, are - there are some caveats here, though, right?
SHAW: Yeah. Well, I would say, actually, some of the caveats work in YouTube's favor 'cause we're talking about just TV viewership, so it's not capturing viewership elsewhere. The biggest caveat in terms of these numbers is that they capture the summer, and so much of TV viewing these days comes from live sports. And the summer is when most of the most popular live sports stop, right? There's baseball, and this summer, we had the Olympics.
But that's where a lot of these other companies generate a lot of their viewership. Disney, CBS, NBC, Fox - all these companies generate so much from football, and that's not included. So these are seasonal, and I assume when you see the Nielsen numbers in September, October, November, some of these other companies will pick up. But the long-term trend is sort of unmistakable, and that's that YouTube is just growing faster than most of these other places.
RASCOE: And so do you have any sense of what's driving this growth for YouTube and who is watching what?
SHAW: Well, look, YouTube just plays a different game than most of these other companies, right? Netflix, even though it's different from the Disneys and NBCs of the world 'cause it started as an Internet service - it is primarily a place for professionally produced film and TV. There's only so much that's available there.
Look, YouTube doesn't really pay for any programming. It's not a place that is commissioning. It's not a studio. It's not an entertainment company, at its core. It's a tech platform that allows anyone to upload video. And so if you're YouTube, you're ingesting hundreds of new hours of video every minute. And so that just gives you more supply than anyone else.
And, oh, by the way, you're free, and you're available everywhere, and you work seamlessly. That's sort of its advantage - is that a lot of people now default to YouTube for watching things. You know, if you're thinking of the Olympics, which happened, there are some people, certainly, who watched the live events on NBC and its various TV networks. There are a lot of people who watched the Olympics on Peacock. But there are as many, if not more people who caught up with different events just watching clips on YouTube.
RASCOE: Are these ratings for YouTube translating into, you know, dollars, you know, the green stuff from advertising...
SHAW: (Laughter).
RASCOE: ...Or other revenue?
SHAW: In terms of revenue, absolutely. You know, YouTube is actually a little bigger than Netflix in terms of revenue. It - you know, it generates tens of millions of dollars in advertising revenue a year. What we don't know is if YouTube is profitable 'cause YouTube's owned by Alphabet, which also owns Google. And as a company, Alphabet makes more than any of these Hollywood companies.
But they don't break out YouTube in that regard. They do now break out numbers for YouTube in terms of revenue but not profit. Most analysts think that YouTube is probably breakeven, maybe a little bit profitable, which goes to show you how expensive it is to sort of host all that video.
RASCOE: That's surprising to me. I would have thought they've been making money hand over fist.
SHAW: I figure, long term, they're going to figure it out. And one thing that YouTube has started to do effectively is also get people to pay for things, right? They have a YouTube Premium, where you can pay if you don't want to watch ads. They also have their YouTube TV service, which is rapidly becoming one of the largest live TV services. And it's safe to assume that one day, it may pass Comcast and Charter and DirecTV.
RASCOE: That's Lucas Shaw of Bloomberg News. Thank you so much for joining us.
SHAW: Thanks for having me.
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