What YouTube’s TV AVOD Foray Means for Free Streaming

YouTube's Move to AVOD TV Shows
Yinchen Niu/VIP+

YouTube can now add AVOD TV shows to the list of services it offers users.

The update of the “Movies” tab to “Movies and Shows” within YouTube represents the formalization of what has always been available on the streamer. Whereas before a user would search for a title and find the official channel for a show like “Hell’s Kitchen,” a select number of shows — YouTube didn’t mention the number of shows, just the total number of episodes (4,000) — will be consolidated in one place.

YouTube’s absence from the world of free streaming (see VIP+’s “The A to Z of Free Streaming” report for greater detail) has been a head-scratcher for some time. VIP+ found in its Viewniverse report that YouTube was the most watched video brand at the end of 2020 for 18-44s, and not offering additional means to keep these viewers engaged for longer was letting free money slip away to free streaming rivals.

This is not something to be skipped over. Nielsen found that in December 2021 YouTube reached over 135 million viewers in the U.S. via connected TV. That’s a considerable audience that, even if 10% stuck around to watch free streaming content, would make it one of the top free streaming services in America.

This is certainly the beginning of a bigger play for more CTV ad dollars and an integrated FAST service within YouTube. And there are a number of factors behind this, both within Alphabet and externally.

Alphabet as an organization already carries several FAST channels. These are included in the YouTube TV lineup in an effort to pad the total channels offered (a practice many VMVPDs employ) and include Tastemade, ABC News Live, Fox Soul, LiveNOW from Fox, NBC News Now and TYT Network. Additionally, it was reported in September by Protocol that Google’s Chromecast would be adding a FAST service sometime in 2022.

Seeing channels integrated within YouTube would be a no-brainer, especially with the audience it has. From a speculative view, adding channels based on prominent YouTube stars would be especially attractive, as they’d be exclusive as well as content for which many already use the service.

Externally, FAST is already reaping profits for those who’ve invested in it. Paramount’s Pluto TV currently pulls in over $1 billion a year in revenue, while Fox’s Tubi TV expects to do so in 2023. True, these are hardly make-or-break figures for a company on the scale of Alphabet, but the lack of even offering a service here is leaving money on the table.

It’s also worth noting that fellow Big Tech firm Amazon does operate an AVOD and FAST service in IMDb TV, while Meta has AVOD-only Facebook Watch (perhaps it, too, should consider FAST). YouTube adding AVOD now and likely FAST later just means it is belatedly entering the free streaming game.

This venture will likely cause some existing services to panic a little. Perhaps not those with exclusive content based on IP, like Tubi with “The Masked Singer” channel or Pluto’s suite of legacy Viacom-branded channels. But for those with few big-brand deals offering content from the same providers licensing to YouTube, there will be a potential hit to their viewership as audiences stick to YouTube.

The new service will also ultimately boost the total number of U.S. consumers viewing free streaming daily. This is a good thing for the industry, as it will help quantify free streaming to advertisers as a legitimate source as well as boost the concept to viewers.

It also signals that free streaming is here to stay as a legitimate viewing source. When the likes of Google and Amazon are involved, as well as OEMs LG and Samsung and big media companies including Comcast, Paramount and Fox, it means that a format many dismissed even a few years ago has truly made it.