Is Google Finally Catching Up On Live Streaming?

GOOG: Alphabet logo

Reports suggest that Alphabet Inc.’s subsidiary Google (NASDAQ:GOOG)  is developing a live-streaming app called YouTube Connect, which will provide live streaming capabilities to most of its users.  Currently YouTube offers this capability via its app called Creator Studio, for users who have a verified channel of good standing on YouTube. Google’s competitor Facebook recently announced that it is extending its live video streaming capability “Facebook Live”, which was launched in August last year to all Apple iOS and Android users in the U.S.  Another popular live streaming app, Twitter’s Periscope, has generated over 100 million live broadcasts from users since its launch last year. Twitter recently integrated the live broadcasts directly into Tweets. While Google has not confirmed news reports of YouTube Connect, we believe investing in live video streaming capability on a large scale via a mobile app will be essential for YouTube to maintain its competitive edge.

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Live Streaming Expected To Play A Major Role In Digital And Social Marketing

Live streaming of videos has been in existence in some form or the other for some time.  However, apps such as Meerkat, Periscope and Facebook Live are ensuring that streaming capability is available to mass users via their mobile phone.  As noted, YouTube already offers live streaming via Creator Studio, although it is restricted to users with verified channels in good standing. The new app reportedly being developed by Google is expected to provide broader access to this capability, allowing all YouTube users to stream live videos.

According to a January 2016 research report by Brandlive, nearly 80% of U.S. retail executives stated that producing live streaming video events helps them create more authentic interaction with audiences. A survey from Cowen and Company, cited by eMarketer and  published in Q1 2016, estimates that U.S. digital video ad spending will reach $28.1 billion in 2020, up from $9.9 billion in 2016. While Facebook and Twitter are actively innovating in the live streaming space, YouTube needs to catch up to ensure that it does not lose out to these competitors. If the new app is able to provide analytics and advanced features to monitor viewership, it could succeed in the mobile live streaming space, despite a late entry.

According to our estimates, YouTube accounts for nearly 3% of Google’s valuation and we expect the number of YouTube users to grow at a steady pace from nearly 1.2 billion in 2016 to 1.6 billion by the end of our forecast period.

In order to ensure a steady user growth YouTube needs to ensure that users stay on its platform for video viewing, including live streaming. While Facebook and Twitter are attracting users in this space, a new app from Google to provide wider access to live streaming through mobile devices with advanced features should enable YouTube to maintain and grow its user base in future.


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