Surprise! YouTube is not profitable

[viktik]

Content source

http://www.filecluster.com/news/surprise-youtube-not-profitable-4069/

There is no doubt that YouTube is the single most popular video platform of the world. Its name is easily recognizable, viral videos on the service gather millions and millions of views while there are also quite a few people who make a (very decent) living through videos that they upload on the Google-owned video hosting website.

With all that power, one might think that YouTube is also a very good source of money but alas, that is not the case. Despite the fact that YouTube actually got $4 billion in revenue last year, the site barely broken even after paying for its content and the equipment needed to run it. This was quite unexpected considering the fact that the company had a revenue of $3 billion in 2013 and was still unprofitable.

Of course, there are several reasons for this. For example, YouTube’s core audience consists of teens and young adults and the video platform does not have a lot of ways to monetize its content. Ad-blocking services are an issue but Google is trying to find new ways of upping the value of its services like providing original content and slowly turning YouTube into a video platform that will better resemble TV along with all of its merits (and potential downsides).

 

[viktik]

YouTube: 1 Billion Viewers, No Profit


Google Inc. nurtured YouTube into a cultural phenomenon, attracting more than one billion users each month. Still, YouTube hasn’t become a profitable business.

The online-video unit posted revenue of about $4 billion in 2014, up from $3 billion a year earlier, according to two people familiar with its financials, as advertiser-friendly moves enticed some big brands to spend more. But while YouTube accounted for about 6% of Google’s overall sales last year, it didn’t contribute to earnings. After paying for content, and the equipment to deliver speedy videos, YouTube’s bottom line is “roughly break-even,” according to a person with knowledge of the figure.

By comparison, Facebook Inc. generated more than $12 billion in revenue, and nearly $3 billion in profit, from its 1.3 billion users last year.

The results reflect YouTube’s struggles to expand its core audience beyond teens and tweens. Many YouTube users treat the site as a video repository to be accessed from links or embedded video players posted elsewhere, rather than visiting YouTube.com daily. Google executives want them to turn on YouTube the way they turn on television, as a habit, where they can expect to find different “channels” of entertainment.

That is a problem still facing veteran Google executive Susan Wojcicki as she begins her second year running YouTube, one that could be tougher to solve if declining profit margins for Google overall limit her ability to invest in new content and services.

Spoiler: More news

http://www.wsj.com/articles/viewers-dont-add-up-to-profit-for-youtube-1424897967