However former WWE Chief Digital Officer Lou Schwartz believes consumers are ignoring “two sleeping giants” in the industry: Google and Facebook.
“YouTube is absolutely sort of a streaming service within Google,” Schwartz said Thursday on FOX Business’ “Varney & Co.” “It's actually a large contribution to Google's overall revenues. Last year, it contributed $15 billion to Google at a 50 percent contribution margin.”
YouTube is not your typical subscription-based streaming service, but Google sees revenue surface through advertising.
“The principle sort of revenue stream from YouTube is advertising, which is why Google is so enamored with their video service,” Schwartz said. “They also sort of offer to creators the ability to monetize their feeds by having their own subscription or direct-to-consumer subscription offering.”
“[YouTube] is obviously a big growth driver for Google in the future,” Schwartz said. “I think the biggest underestimation is the amount of data that's being collected by Google. I think in five years, we're going to look back and see the entities that succeed the most in OTT [over-the-top] or direct-to-consumer are the ones that are able to capture the most granular data.”
Collecting data and targeting consumer interest is reportedly key to how these streaming services will break through the competition.
“The ability to personalize the viewing experience and knowing your behavioral consumption pattern, knowing your interest graph, knowing the types of content that you're interested in consuming and delivering that to you delivers a highly personalized, engaging experience.”
“Facebook has Facebook Watch and they have Facebook Live,” Schwartz said. “So they have the ability to retain users and deliver compelling content and monetize sort of that content at very high levels because of this granular data and because of their ability to know who you are, who your friends are and what your friends are watching at any given time.”
“The future of streaming is all about how much data you've got on all those individuals out there and what they want. That's the name of the game.”