With Google finalizing its acquisition of YouTube, research firms are churning out statistics in support of the story. There's a significant problem with much of it.
While one research company has touted market share of visits to a few online video sites as a key metric with which to evaluate the transaction (reporting that YouTube has a 40 percent market share), comScore considers this to be misleading, especially when evaluating the impact of Google's acquisition. Analyzing the transaction using share of visits suggests that all visits to video sites are equally valuable-- but how can that be true? For example, one visit might result in only one video stream being viewed, while another visit can result in 20 video streams being viewed. With the potential to insert an ad in every stream, clearly all visits are not of equal value when considering the advertising potential of any site that offers streaming video. The problem is compounded if market share is measured only within a few select sites and not across the entire web.
Ultimately, the success of this acquisition will be judged on advertising sales, and Google's ability to monetize the YouTube visitors and their video streams through advertising. To that end, comScore has compiled data on actual video streaming activity-- which is to say, the number of streams initiated through the leading video sites.
The below table provides data on number of U.S. streamers and streams for the total internet and for each of the top 10 video sites. Importantly, these data show that YouTube accounts for nine percent of all streams (far below the 40 percent market share that has been reported using share of visits to only a few video sites) while Google accounts for about one percent of all streams served. As a result, through its acquisition of YouTube, Google has increased its number of streams by a factor of 10. (Google sites served 60 million streams in July, while YouTube served 649 million streams.)
"In acquiring YouTube, Google has, in one fell swoop, increased their number of video streams -- and potential ad revenue from streaming -- tenfold," says Gian Fulgoni, comScore chairman.
The below table also provides additional context on streaming activity on other sites, for comparative purposes.
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