If asked to judge major social platforms based on how immune they are to being upended by a rival, I'd probably rank Facebook Inc.'s (FB) - Get Reportcore service first. But Alphabet Inc./Google's (GOOGL) - Get Report YouTube might very well be second.
YouTube certainly faces far more competition in the realm of short- and medium-length online video -- much of it from Facebook itself -- than Facebook does in the realm of social networks meant to connect a user with family and friends. But between its colossal base of viewers, content creators and advertisers, and how it's able to put all of its viewing data to use, the odds of a rival usurping YouTube's position in its core market, rather than just slowing down its still-impressive growth, look pretty low.
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Last Thursday, June 22, YouTube, which hadn't updated its user count since announcing in 2013 that it had over a billion monthly active users, announced that it now had over 1.5 billion monthly active logged-in users. Though a large percentage of YouTube users are likely logged in -- anyone logged into a Google account is effectively logged into YouTube -- it's possible that there are a few hundred million viewers who aren't.
YouTube also disclosed that its viewers on average now watch over an hour of video per day on mobile devices alone. This reveal comes four months after YouTube said its total daily viewing had eclipsed 1 billion hours, a tenfold increase from 2012 levels.
Some context: eMarketer estimates the average U.S. adult spends slightly over 4 hours per day using mobile apps and browsers. Thus for its base, YouTube might account for about a quarter of mobile app and web usage.
And from the looks of things, a significant portion of YouTube viewing still happens on non-mobile devices such as PCs and streaming set-tops. Telecom equipment firm Sandvine estimates YouTube accounted for 17% of North American downstream video traffic from fixed-access devices in the second half of 2016. That only trailed Netflix Inc.'s (NFLX) - Get Report35% share, and wasn't far removed from YouTube's 21% mobile video traffic share (#1 overall).
After factoring non-mobile viewing, total average YouTube viewing might be around 90 minutes per day. That's still less than the roughly 5 hours per day of live and time-shifted TV that Nielsen estimates the average American adult to watch -- to be fair, the number is lower for the younger demographic groups YouTube viewing skews towards -- but appears to be above the usage claimed by any other big social platform.
Facebook reported in April 2016 its daily active users (DAUs), which now total 1.28 billion, spend over 50 minutes per day on Facebook proper, Messenger and Instagram; WhatsApp, which claims over 1.2 billion MAUs, wasn't included in the tally. Snap Inc. (SNAP) - Get Report reported in May that its 166 million DAUs average over 30 minutes per day on its app.
The usage stats shared by YouTube this year drive home how successful it has been at growing per-user viewing for its site and apps over the past few years -- even as ad-free subscription streaming services such as Netflix and Amazon.com Inc.'s (AMZN) - Get Report Prime Video have taken off, and video has become a core part of the user experience for Facebook and many other other social media platforms. The fact that YouTube's short-form content is well suited for phones and tablets certainly hasn't hurt. But the bold moves YouTube has made to overhaul its site and apps also have a lot to do with it.
These moves have included creating a personalized home page feed of videos that YouTube thinks a user will like, and using its volumes of viewing data and Google's machine learning investments to improve video recommendations over time. They've also included making it easy to access videos from "subscribed" accounts and trending videos uploaded by others, and adding a picture-in-picture mode that lets a user keep watching a video while browsing other material. An in-app messaging service that lets users share videos with contacts is on the way.
The video giant's efforts have also included emerging markets-friendly features such as Smart Offline, which lets users automatically downloads videos overnight while a user is at home, and thus avoid having to stream them in places where mobile connectivity is limited or expensive. And on the advertising side, YouTube's attempts to keep users happy have included killing off its unskippable 30-second ad format and selling mobile advertisers on its 6-second Bumper ads.
One, of course, can't also ignore YouTube's enormous network effect, one that perhaps only Facebook and a handful of messaging apps can match. YouTube's massive user base and effectiveness at monetizing content make it an indispensable distribution platform for independent and big-media content creators, which in turn keeps users coming back. Meanwhile, recent issues over extremist content notwithstanding, video advertisers consider YouTube vital both due to its scale and because of how effective (with Google's help) its ad targeting has become.
It's possible that Facebook, whose reach matches YouTube's and which is starting to get serious about turning its Video tab into a professional content hub, could slow YouTube's growth in the coming years. The fact that Facebook, unlike YouTube, plans not to show "pre-roll" video ads that appear at the beginning of a video in favor of "mid-roll" ads that appear later, gives it one way to differentiate. But Facebook has a lot of catching up to do, and for now, most of the video viewing on its app consists of videos picked out by an algorithm to appear on the news feed, and which are often played without sound.
In the meantime, YouTube continues to be Google's second-biggest revenue growth engine behind mobile search, helping Google's paid ad clicks and impressions rise 44% annually in the first quarter. Last September, eMarketer estimated YouTube's net ad revenue -- it excludes payments to content creators -- would total $3.5 billion in 2017 in the U.S. alone, and approach $4 billion in 2018.
Judging by YouTube's viewing trends, such revenue growth seems attainable even if recent advertiser problems take a little while to fix.