It’s doubtful that even Howard Stern himself would raise objection to MoffettNathanson principal analyst Michael Nathanson’s headline for his latest YouTube deep dive, in which he declares the Alphabet-owned video giant “The New King of All Media.”
Just last week, Nielsen published new data indicating that YouTube’s 11.6% share of all U.S. TV viewing in February didn’t just lead all streaming services and channels, it was bigger than the cross platform viewership share of any other media company, including incumbent champ Disney.
Nathanson’s broad-skewing report suggests that not only is YouTube generating more viewership than any other video content supplier, it’s creating more revenue.
Among a number of shiny objects in the equity research paper was the analyst’s subscriber estimate for virtual pay TV service YouTube TV: Nathanson pegs its current customer scale at 9.4 million.
Alphabet doesn’t regularly disclose customer numbers for its eight-year-old virtual MPVD — the last sign post was 8 million back in February 2024. But the count is increasingly relevant, as YouTube TV has evolved from a scrappy $35-a-month streaming skinny bundle into a full-fledged $83-a-month powerhouse, the only major pay TV service of any kind that’s actually growing in a meaningful way.
At the current levels of decline for its competitors, “YouTube TV is on a clear path to becoming the largest pay TV provider in the United States,” writes Nathanson, who foresees the service surpassing Charter Communications and Comcast in scale in around 2026.
More holistically, the analyst sees the broader YouTube, which generated $54.2 billion in revenue last year, surpassing Disney this year to become the most lucrative media company.
“If YouTube was a standalone business, public comps suggest the business would be worth $475 [billion] to $550 billion, or about 30% of Alphabet’s current valuation,” the analyst writes,
Nathanson believes YouTube is actually “under-monetized.”
Speaking of the potential of YouTube Primetime Channels, the third-party app market rendered far more accessible earlier this month with a redesign of the YouTube app’s homepage, Nathanson believes the company has a huge opportunity to expand even further. Not only is YouTube in a great position to capture a share of the $85 billion consumer pay TV market, it can also take a major slice of subscription streaming revenue through Primetime Channels.
By 2027, Nathanson estimates, YouTube could be generating more than $75 billion of annual income through subscription services (YouTube TV, YouTube Premium and Music) and advertising.
Finally, the emergence of YouTube as a revenue powerhouse (along with Google’s cloud efforts) have eased investor fears about the decline in Alphabet’s long-reigning search business, the analyst adds.