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Business News Digital
YouTube has 20 million premium subscribers, $15 billion a year ad revenue
By Chris Cooke | Published on Wednesday 5 February 2020
Google has revealed that YouTube generated nearly $5 billion in ad revenue in the last quarter of 2019, which is mainly of interest because the web giant has previously been hazy about the value of its video platform. Total YouTube income for last year was $15 billion.
Having got into a YouTube stats spiel during a quarterly financial update from parent company Alphabet, the company also said that it now has more than 20 million subscribers for its premium YouTube options, which include the platform-wide ad-free premium package and its standalone YouTube Music service. Subscription monies are listed separately from ad income as part of a rather unhelpful income category called “other”.
Cynics in the music industry have often suspected that one of the reasons Google was traditionally vague about YouTube’s earnings was so that it could down-play the importance of the video site to the wider business when negotiating deals with the companies whose content feed the platform.
Is the new transparency on YouTube earnings a sign that Google is now more willing to admit just how valuable content owned by companies like the record labels and music publishers is to its wider business?
It does come amid chatter that – after YouTube’s high profile battle with the music community last year over the European Copyright Directive – bosses at the video site are now seemingly offering some concessions to placate the record companies and music publishers. And the majors had already softened their anti-YouTube stance following the launch of the standalone YouTube Music service.
However, the increased transparency on the YouTube business is really to satisfy demands from investors. It also meant that Alphabet could brag about revenue growth within its YouTube division, which was significantly higher than growth in its core Google search business. Though, while the growth rate may be impressive, most investors were actually disappointed with YouTube’s current earnings, which were less than they previously assumed.
Another reason for putting a brighter spotlight on YouTube during Alphabet investor calls is that all the other big tech and media companies are very busy indeed bigging up their new video streaming companies. Google is possibly keen to remind the investment community that it was an early innovator in that market and remains a formidable player in it today.
