What’s on TV? For Many Americans, It’s Now YouTube

Disney DIS -0.45%decrease; red down pointing triangle—the parent of TV networks such as ABC and ESPN and streaming services including Disney+, Hulu and ESPN+—garnered 11.5% of total TV-viewing time in the U.S. last month, retaining its top position. The data, which Nielsen released Tuesday, for the first time captures the full audience that entertainment companies reach across cable, broadcast and streaming on people’s TV sets.

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YouTube’s growing share illustrates the power shift under way in the entertainment industry. The video app is standing toe to toe with companies that own TV networks as well as streaming services. Traditional media and streaming behemoths collectively spend over $100 billion a year on programming, according to Ampere Analysis.

Legacy players such as Warner Bros. Discovery and Paramount Global are dealing with the declining reach of their traditional TV networks as more Americans cut the cord. At the same time, they are spending heavily on slates of original content and sports programming to retain the viewers they still have and anchor their nascent streaming services.

The release of Nielsen’s data comes as entertainment giants present their programming plans for the coming TV season to advertisers—a process known as the “upfronts,” which began in earnest on Monday. 

YouTube’s share of total TV time as measured by Nielsen looks only at the YouTube app on smart TVs, which is free and comes with ads (an ad-free version costs $13.99 a month). YouTube parent Google is also a major pay-TV provider in the form of YouTube TV, which streams a package of more than 100 TV channels and sells access to the National Football League’s Sunday Ticket franchise. 

People who watch TV channels through services such as YouTube TV and FuboTV are taken into account in the Nielsen data, and credited to the owner of the channel, not the platform on which the channel is watched. For example, Disney gets credit when someone uses YouTube TV to watch ESPN, Nielsen said. Viewership trends can change seasonally.

The content that draws the most viewing on YouTube, particularly on television sets, is made by the likes of online celebrities such as MrBeast; Rhett and Link, co-stars of variety show “Good Mythical Morning”; and daredevil Michelle Khare, company executives said. 

“We’re talking about creators as the studios of the future,” said Mary Ellen Coe, YouTube’s chief business officer. The platform benefits from a steady stream of fresh content released daily and is particularly popular among people under 24.

Today, 150 million people in the U.S.—more than 40% of the population—watch YouTube on connected-TV screens each month, a spokeswoman for the platform said. It has benefited from new features that let viewers shop or chat with one another while watching big events, like a livestream of last month’s Coachella Valley Music and Arts Festival.

Unlike traditional media companies, which have to pay hefty sums upfront for programming that they hope will bring in larger amounts of subscription and advertising revenue, YouTube incentivizes the creation of content by sharing 55% of revenue from ads that run in creators’ long-form content, and 45% of revenue from ads on their short-form videos.

“Given the quality of work being done by the best creators on YouTube, the stigma of creator content that lingered, for frankly too long, is finally washing away,” said Brian Flanagan, president of Mythical, the entertainment company behind “Good Mythical Morning.” Mythical has produced about 7,000 episodes and specials across five shows on YouTube since 2007.

YouTube topped Netflix NFLX -0.48%decrease; red down pointing triangle as the streamer with the most U.S. TV time in early 2023, according to Nielsen data, and widened its lead in the early months of this year. Netflix attracted the sixth-largest share of U.S. TV time in April after Disney, YouTube, NBCUniversal, Paramount and Warner Bros.

The rise of YouTube isn’t necessarily detrimental to traditional TV programmers, many of which are choosing to make some of their programming available on the platform after years of being wary of video-sharing platforms.

“It’s really about this notion of, How do you extend the life of the content based on where the consumer is spending time?” Nielsen Chief Executive Karthik Rao said of programmers’ approach. 

Write to Sarah Krouse at sarah.krouse@wsj.com and David Marcelis at david.marcelis@wsj.com