A General Description of the Organization
YouTube is a leading digital video hosting service headquartered in California, United States. It operates in the online video and entertainment market, and its line of business is offering user-generated videos through its website. Users and corporate entities globally can upload, view, and share diverse multi-media content through this platform freely or on a subscription basis. The media content provided are videos, television shows, ads, short documentaries, edutainment media clips, and live streaming (YouTube, 2020). Much of the material on YouTube originate from individual users, but some corporate content is also available. Google is YouTube’s parent company that operates the website currently.
YouTube is among Google’s best-performing subsidiaries based on revenue and daily visits. The company has an estimated net worth of $300 billion, and in 2019 it generated $15.14 billion in global advertising revenue and spent $8.5 billion on content acquisition (Iqbal, 2020). The company’s dominant payment model for company ads is paying per click or view. In the past few years, YouTube has reported strong growth due to a growing smartphone market and strategic partnerships with major firms and media houses such as BBC. Paypal employees co-founded YouTube in 2005 as a video-sharing service. Google acquired this company in 2006 at a cost of $1.65 billion (YouTube, 2020). Since then, YouTube has experienced phenomenal growth by harnessing users’ creativity and making content readily available to a mass audience.
– Market dominance in online video sharing
– Broad and diverse content
– User-generated content
– Copyright infringement
– Limited paid subscription and exclusivity
– Minimize dependency on ads
– Growth in internet and smartphone use
– Intense competition
– Podcasting is growing
- Market dominance – YouTube has a strong presence locally and overseas; its popularity is attributed to content variety and rising mobile viewers.
- E.g., it is ranked the second based on the number of followers, with 62.9% of corporations sharing video content on YouTube (Iqbal, 2020).
- Broad and diverse content – The company provides multiple content categories, including YouTube TV, live streams, viral videos, and learning topics, increasing user traffic to the site.
- E.g., more than half of YouTube users (51%) log in to the site daily, contributing to higher ad viewership and revenue (Iqbal, 2020).
- User-generated content – Famous personalities and brands produce videos shared freely on this site; thus, YouTube’s operational costs are low.
- E.g., the company earns millions of dollars from viral videos uploaded on the site.
- Copyright infringement – Copyrighted material shared via YouTube affects its reputation and leads to revenue loss.
- E.g., it is hard for YouTube to identify and remove patented material before it goes viral.
- Limited paid subscription and exclusivity – The company lacks a paid subscription model and exclusive content; thus, users can access similar videos from other sites.
- E.g., it is a challenge for Youtube to develop strategic goals without paid viewership.
- Minimize dependency on ads – A paid viewership model can give YouTube more control over the content users access.
- E.g., companies, such as Netflix, have used this model to attract YouTube users dissatisfied with its many ads.
- Growth in internet and smartphone use – The penetration of the internet and android-based mobiles to remote areas present a growth opportunity for YouTube.
- E.g., with the increasing adoption of the android operating system by phone companies, viewership of YouTube content through its app is bound to rise.
- Intense competition – Netflix and Amazon Prime Video compete with YouTube by providing uninterrupted paid service.
- E.g., Netflix’s current subscription exceeds 160 million globally compared to YouTube’s 2 million subscribers (Iqbal, 2020)
- Podcasting is growing – Podcasters increasingly provide content via private websites, generating revenue directly from advertisers.
- E.g., many brands have shifted to advertising through channels operated by bloggers and podcasters.
Ways to Create a Competitive Advantage
Efficient processes reduce operational costs, providing a competitive advantage in the market. According to Lee and Yoo (2019), attaining a low-cost structure ensures the provision of quality products or services at the lowest price. YouTube can launch features that allow uploading video links from other providers or social media. This cost-efficient strategy is recommended to enhance traffic to the site by providing quality content freely.
YouTube users are dissatisfied with ads and poor quality videos. According to Lee and Yoo (2019), producing products or services with the most valued attributes enhances customer satisfaction and competitive gains. A paid viewership model is recommended for YouTube to reduce ads on its site. Also, partnerships with original content creators and film producers will ensure quality videos for users without risking copyright infringement claims that damage brand reputation.
Responsiveness to Customers
A customer-centric approach is a critical success factor in a competitive business environment. High-performing firms strive to understand and respond to customer needs and preferences (Lee & Yoo, 2019). YouTube can address client issues and concerns about its online content by conducting surveys and acting on feedback. The company should ask its users to rate its services and recommend how to improve them to increase customer satisfaction levels.
Trends in the technology industry require companies to be innovative in their business processes and models. Therefore, innovation is an efficient strategy for YouTube to compete effectively in its market. It should enter new niches such as live streaming events and video conferencing by adding new features on its app. Additionally, extending its current product, YouTube Red that supports offline viewing of videos, to more countries can lead to competitive gains.
Iqbal, M. (2020). YouTube revenue and usage statistics (2020). BusinessofApps. Web.
Lee, K., & Yoo, J. (2019). How does open innovation lead competitive advantage? A dynamic capability view perspective. PLoSONE, 14(11), e0223405. Web.
YouTube. (2020). About YouTube. Web.