A recent NYT article about YouTube highlighted three factors that suggest YouTube has significant room for growth:
(i) YouTube users are spending more time watching more video clips than in the past
The average time spent on YouTube has increased 50% since last year and an average YouTube visitor watches about 83 clips per month, up from 53 a year earlier.
(ii) Time spent watching TV is still 20x greater than time spent on YouTube
Despite the increase in time spent on YouTube, the average visitor still only spends about 15 minutes per day on the site compared to average TV viewership of 5 hours per day. YouTube could capture more of the TV viewership time by making engaging content easier to find.
(iii) YouTube is making it easier for users to find interesting content and spend more time on YouTube
As mentioned in the article, YouTube has the equivalent of 100,000 full-length movies uploaded each week. With so much content pouring into YouTube, the site is working on making it easy for users to find what they’re looking for and stay engaged longer.
What could this mean for Google’s stock?
We estimate that the average YouTube user views about 164 page views each month on the site and that this will grow to about 270 page views by the end of the Trefis forecast period. However, if YouTube can continue to demonstrate 50% growth in user engagement and capture some of the TV viewership time, page views could be as much as an order of magnitude higher.
By what percent would the Trefis price estimate for Google increase if YouTube monthly page views were to reach 1,000 per user?
A. 1%
B. 5%
C. 10%
D. 15%
Make a selection above and increase the YouTube page view forecast to see the answer.
