Here’s Why YouTube Go Can Drive User Growth For Google In India

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As online video consumption increases among the younger population, data costs and connectivity issues are impacting usage in emerging economies. Social media companies such as Facebook and LinkedIn are working on making their content adaptable to slower connections in India, while Netflix is currently focusing only on users with high speed internet connections. Alphabet Inc.’s (NASDAQ:GOOG) subsidiary Google has joined the race to woo Indian users in smaller cities and announced the pilot launch of YouTube Go, and app designed to be “offline first” and work even when there is low or no connectivity.  With this app, the company plans to address another issue, that of less powerful mobile phones being used in emerging markets.  In this light, the app is cost effective in providing transparency of data usage. India is a huge market for YouTube, with 350 million internet users, at least 70% of them consuming videos online.  In India, 50% of YouTube’s consumption comes from mobile phones and as value conscious consumers in India keep a tab on data charges, YouTube Go can meet these challenges effectively and drive user growth for Google in the region.

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Tapping Into The Growth From Smaller Cities.

Over the past year, YouTube witnessed an 80% increase in its viewership time in India. A significant part of this growth came from smaller cities in the region where challenges of low end smartphones and low speed internet connections remain.  With YouTube Go, Google will be able to tap into these users by providing a solution which is cost effective and works in no on-line connectivity zones. YouTube Go also has a user interface designed specifically for the Indian audience and a social experience which connects users with people and content they care about.

According to our estimates, YouTube accounts for more than 15% of Google’s valuation.  We expect the number of YouTube users to increase steadily from around 1.3 billion in 2016 to 1.8 billion by the end of our forecast period.

Emerging markets will be a key driver of this user growth where internet penetration is low and there is scope for rapid expansion especially in smaller towns of these countries. We believe YouTube Go can play a significant role in this growth as it addresses the common challenges faced by users in smaller cities of emerging nations. Competition in the online video space in these markets is increasing with Amazon launching Prime video in India and Netflix looking to expand in the region. However, Google’s strategy to use technology to provide solutions to common challenges faced by users in online video consumption should work in its favor.  The YouTube Go app can be instrumental in driving user growth in India.

 

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