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They also pay creators and have much higher storage costs
by scarface74 4y ago
They also pay creators and have much higher storage costs
- xyzzy123 4y agoNetflix pays for content too.
- scarface74 4y agoAnd until recently, Netflix has been borrowing billions - more than its net income to produce and acquire content. Netflix pays once for content and it owns it. It’s a fixed cost. YouTube content creator costs scales with popularity
- nl 4y agoBut Youtube controls how much they pay creators to a much greater extent than Netflix does. Netflix commissions shows, and they have to have hits to drive subscriptions. Youtube pays a percentage of the ads shown on each channel, which scales directly with the popularity. As the channel becomes more popular the creator gets paid more, but Google makes more money because the advertisers pay by views too. Netflix doesn't have that property.
- nl 4y agoI have a better source now, estimating Google's gross profit margin for YouTube at 38%: https://mannhowie.com/youtube-valuation https://mannhowie.com/youtube-valuation Basically: - 55% of Ad revenue goes to creators - 7% of revenue on storage and data center costs (based on Google's 2019 annual report that reported how they depreciate their data center assets). On top of that there are operating expenses, so operating profit margin is 3-18% (this is assuming their op-ex is much higher - almost twice - Netflix, but comparable to Facebook.)