What Paramount needs is more scale to compete with media and tech behemoths like Amazon, Google, Disney and NBCUniversal. Upfront negotiations are a blaring reminder that advertisers put their biggest spend commitments behind the largest content portfolios.
The problem is that this tactic is often confusing for viewers and can result in churn. Licensing doesn't "create a habit among consumers to subscribe and stay subscribed" to a service, says industry analyst Brian Wieser. Why pay for a Paramount+ membership when you can find the same shows on, say, Netflix or Prime Video?
Martin contends Alphabet would be better served liberating YouTube - perhaps not from its strategic alignment with Google advertising, but at least by making it a separate entity. "There is this hidden value in YouTube that people can't separately trade, and so it's trapped in Google in a conglomerate that has a lot of other risks," she tells Bloomberg.
On the other hand, it's hard to disentangle YouTube's immense ad revenue from Google, considering Google's DV360 DSP has exclusive access to the inventory and YouTube campaigns are deeply infused with search data. Not to mention products like Performance Max that don't distinguish between Search, Gmail or YouTube, including YouTube TV and Shorts.
But don't hold your breath, by the way. Google would ditch its ad tech stack long before even contemplating a YouTube spinoff.
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