MoffettNathanson has crowned YouTube the “New King of All Media” as the Alphabet-owned video platform has become a major force in Hollywood, dominating time spent watching TV.
The firm estimates that YouTube as a standalone business could be worth as much as $550 billion — or nearly 30% of the tech giant’s current valuation. The figure is based on the firm’s analysis of enterprise value as a multiple of revenue in 2024 for Netflix (10.5x revenue), Meta (8.8x), Roku (2.4x), Warner Bros. Discovery (1.4x), Fox (1.3x) and Disney (1.3x).
In 2024, YouTube was the second-largest media company by revenue at $54.2 billion, trailing behind only Disney. However, the MoffettNathanson analysts predict YouTube will take the top spot in 2025, becoming a leader in both engagement and revenue.
“YouTube has the potential to become the central aggregator for all things professional video, positioning itself to capture a share of the $85 billion consumer Pay TV market and the ~$30 billion streaming ex. Netflix market in the U.S.,” they wrote in a Monday research note. “On monetization, when comparing YouTube’s massive TV screen engagement to its estimated TV revenue, it remains significantly under-monetized relative to its scaled reach and differentiated offering. This signals a substantial runway for improving its monetization strategy.”
In February, YouTube accounted for a record 11.6% of time spent watching TV, per Nielsen, overtaking Disney in the measurement firm’s Media Distributor Gauge.
Time spent watching YouTube on TV is up 53% compared to the same month two years ago. The overall viewing bump has been driven by older audiences, with viewing from adults ages 65 and up increasing 96% year-over-year and nearly doubling in the last two years.
The demographic now represents 15.4% of the platform’s viewing, while viewers ages 50-64 accounted for 20.4%, 35-49 accounted for 19.4%, 18 to 34 accounted for 21%, 12-17 accounted for 6.9% and kids aged 2 to 11 accounted for 16.9%.
In addition to YouTube itself dominating watch time, YouTube TV has become a major player in the pay TV space with more than 8 million subscribers, becoming the fourth-largest provider behind Comcast, Charter and DirecTV and largest vMVPD. Meanwhile, YouTube Music and Premium reaches over 125 million subscribers globally, including trials.
For 2024, the firm estimates YouTube generated $7.8 billion in operating income, with operating margin of 14% and projects those figures will grow to $10.2 billion and 16% in 2025. By 2027, the firm projects YouTube will hit $13.8 billion in operating income with its margin expanding to 18%, “primarily driven by improved subscription economics.”
Looking ahead, MoffettNathanson expects YouTube’s subscription revenue to continue to outpace advertising, driven by subscriber additions. However, with no further price increases factored into its estimates, the firm anticipates a gradual slowdown in subscription growth as net additions moderate, particularly for YouTube TV, with total revenue growth expected in the low- to mid-double-digit range from 2025 through 2027.
It estimates that YouTube will have a 10% share of spend in the $85 billion pay TV market and become the industry leader by the end of 2026 as traditional pay TV distributors continue to collapse, which “should help their economics in content negotiations while creating a pricing opportunity.”
MoffettNathanson urged YouTube TV management to create a skinnier bundle of broadcast, sports and news linear networks and on-demand entertainment streaming platforms like Hulu, Paramount+, Peacock and Max, arguing the opportunity is “ripe for the taking.” It also called for “greater disclosure” on YouTube’s economics, noting that Alphabet only provides updates on revenue and engagement “periodically.”
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