YouTube’s advertising business surged 13% year-over-year to nearly $10 billion in the second quarter, according to Alphabet's latest earnings report. The growth is fueled by the platform's cementing its status as the undisputed leader in TV screen viewership, leaving traditional media and streaming rivals far behind.
King of the couch: The platform's success is a direct result of its "living room takeover". YouTube captured a record nearly 13% of all U.S. TV viewing time in June, according to Nielsen. Netflix trailed at around 8%, while all other services failed to capture even 5% of viewership.
A league of its own: While competitors scramble to build their own ad businesses, YouTube's lead looks insurmountable. Netflix, for instance, plans to double its ad revenue, a business currently worth an estimated $3 billion, according to analysts—a fraction of YouTube's latest quarterly haul.
Leaning in: The platform’s momentum stems from a fundamental shift in viewing habits, which CEO Sundar Pichai attributes to the "generation that grew up on YouTube" now watching in the living room. The company is doubling down on its sports TV dominance, preparing to stream its first-ever free NFL game globally this September.
Yes, but: Not everything was rosy, as investors showed some wariness over Alphabet's increased AI spending. The strong ad growth also contrasts with signs that its YouTube TV subscription service may be cooling off after a recent price hike. Meanwhile, the company is looking to the future by investing in new AI filmmaking tools for creators in partnership with director Darren Aronofsky, signaling a broader shift in AI content generation that will undoubtedly have impacts across the TV ad sector.
