A view from Gideon Spanier

Thinkbox/YouTube spat is the start of an epic battle

Many people's first reaction on hearing that Thinkbox, the commercial TV trade body, has attacked YouTube's reach with millennials is: what took it so long?...

YouTube enraged broadcasters by claiming in October last year that its research showed advertisers should spend 24 per cent of their TV ad budget to reach 16- to 24-year-old Britons. But Thinkbox has taken six months to compile its own research, using independent data, before it felt ready to go public.

Now, the results are in and Thinkbox estimates that YouTube accounts for only 10.3 per cent of time spent by 16- to 24-year-olds consuming video. And, importantly, when it comes to their viewing of video advertising, YouTube falls to a mere 1.4 per cent of time spent.

How come? Thinkbox reckons it’s because YouTube tends to run only one pre-roll ad before each video, many ads are skippable, it has less premium content than traditional TV and the majority of viewing is by a small number of heavy users. All of which reduce its reach.

Funnily enough, Thinkbox’s research also found that traditional TV, including catch-up and broadcaster video-on-demand, has retained much of its reach. While TV only accounts for 57.5 per cent of all video viewing by 16- to 24-year-olds, it is responsible for 87.6 per cent of their video advertising viewing. So YouTube’s claims were "ill-founded" and "irresponsible", Thinkbox says.

Naturally, YouTube strongly disagrees and suggests the trade body is "struggling to keep up" with online viewing data. Alas, YouTube’s owner, Google, won’t give out its own figures about time spent viewing ads.

The truth probably lies somewhere in the middle – YouTube likely has less reach than it claims, but more than Thinkbox would like to concede.

However, what is more significant is the direction of travel, and that has to be away from broadcast and towards on-demand and online.

Look at how James Corden’s Carpool Karaoke films for his US TV show have become a global hit thanks to YouTube. Or how Mark Zuckerberg is pushing live video and virtual reality at Facebook. Or how Netflix keeps growing (albeit showing no ads).

The TV ad market may be buoyant but broadcasters should be alarmed by the discrepancy between the proportion of time spent watching TV and of time spent watching advertising on TV. That looks unsustainable. 

Ultimately, this row matters because it is part of a bigger fight to control the market for TV and video entertainment – the most lucrative category in media.

Both Thinkbox and YouTube say TV and online can coexist, but the lines are blurring as broadcast and online delivery merge. This skirmish is the start of an epic battle.