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YouTube generated $31.5 billion in advertising revenue in 2023. https://www.businessofapps.com/data/youtube-statistics/#:~:text=YouTube%20improved%20its%20perc

YouTube generated $31.5 billion in advertising revenue in 2023. https://www.businessofapps.com/data/youtube-statistics/#:~:text=YouTube%20improved%20its%20percentage%20revenue,generated%20%2431.5%20billion%20in%202023 https://www.businessofapps.com/data/youtube-statistics/#:~:t.... That's... a lot! Plenty of historical precedent for fully advertising-supported media with high expenses, from OTA network television and radio to free weekly newspapers... or inexpensive subscriptions to daily newspapers subsidized by advertising. Advertising has been paying the bills for electronic media for a century now.

KennyBlanken 2y ago
Revenue is not net profit.
- Waterluvian 2y ago
  No, but it demonstrates they have at least $31 billion to make it all work.
rgbrenner 2y ago
Yes. For comparison, Netflix has about $30B in revenue... paid up front for all of its content (something youtube doesnt) and accounts for a larger percentage of internet traffic (likely because of higher quality streams)... and they still made $6B net profit.
- londons_explore 2y ago
  Netflix content is highly coachable (tiny library Vs YouTube), which dramatically reduces the cost of serving the data to users.
  - luke-stanley 2y ago
    I think londons_explore means "cacheable" - able to be cached. But I don't think either would need to cache the whole catalogue ahead of time.
    - joseda-hg 2y ago
      I thought it was more directed towards "Coachable" as getting to select and train /trend towards more profitable content
      - luke-stanley 2y ago
        Yeah I thought that way too at first, it's an interesting take. These days maybe ML could help auto-coach promising content producers. For the other take: maybe pre-caching content that's more cost saving to cache than it is to not cache it can be aided by ML too. But replicating smaller libraries of content at all regional replica nodes is probably more straight forward at first.
  - whiplash451 2y ago
    Which also means that diversity is a bad deal for Netflix. They have a direct financial incentive to have more people watch the same thing.
    - robertlagrant 2y ago
      It's not a "bad deal" - there will be lots of factors to consider.
samspenc 2y ago
The mind-blowing thing about this I found out recently, is that analysts think that Youtube is still losing money, even after making $31.5 billion in revenue! From 2015 "Some unnamed person at Google reportedly said that the site is "roughly break-even." https://www.cbsnews.com/news/4-reasons-youtube-still-doesnt-make-a-profit/ https://www.cbsnews.com/news/4-reasons-youtube-still-doesnt-... which in turn quotes https://www.wsj.com/articles/viewers-dont-add-up-to-profit-for-youtube-1424897967 https://www.wsj.com/articles/viewers-dont-add-up-to-profit-f... From March this year (2024): "Analyst Michael Nathanson of MoffettNathanson estimates that YouTube TV will become profitable this year" https://www.newscaststudio.com/2024/03/29/youtube-tv-profit-leader-2024/ https://www.newscaststudio.com/2024/03/29/youtube-tv-profit-... Part of this could be because they pay out roughly 40-60% of the revenue to the content creators, that leaves Google / Youtube with half the revenue that they use to pay salaries, maintain infrastructure, including storage, hosting and serving content.
- rgbrenner 2y ago
  Netflix spends over 50% of it's revenue on content production and licensing ($17B out of $30B), and they made $6B net profit in the past year.
  - Ferret7446 2y ago
    Netflix doesn't need to subsidize anything. YouTube subsidizes a lot of videos which don't have ads.
    - rgbrenner 2y ago
      Netflix serves a slightly larger portion of internet traffic than YouTube on the same amount of revenue. So whatever subsidization youtube is providing for those videos, is clearly outweighed by the monetization of the remaining videos. YouTube has higher revenue per GB of bandwidth served than Netflix.
      - octodog 2y ago
huijzer 2y ago
I think this is the answer. Also, storage and compute purchase prices are probably falling roughly as fast (or maybe even faster) than their storage and compute requirements go up. So even with their massive storage requirements, I wouldn't be surprised if they are more profitable each year.

KennyBlanken 2y ago

Revenue is not net profit.

Waterluvian 2y ago
No, but it demonstrates they have at least $31 billion to make it all work.

rgbrenner 2y ago

Yes. For comparison, Netflix has about $30B in revenue... paid up front for all of its content (something youtube doesnt) and accounts for a larger percentage of internet traffic (likely because of higher quality streams)... and they still made $6B net profit.

londons_explore 2y ago
Netflix content is highly coachable (tiny library Vs YouTube), which dramatically reduces the cost of serving the data to users.
- luke-stanley 2y ago
  I think londons_explore means "cacheable" - able to be cached. But I don't think either would need to cache the whole catalogue ahead of time.
  - joseda-hg 2y ago
    I thought it was more directed towards "Coachable" as getting to select and train /trend towards more profitable content
    - luke-stanley 2y ago
      Yeah I thought that way too at first, it's an interesting take. These days maybe ML could help auto-coach promising content producers. For the other take: maybe pre-caching content that's more cost saving to cache than it is to not cache it can be aided by ML too. But replicating smaller libraries of content at all regional replica nodes is probably more straight forward at first.
- whiplash451 2y ago
  Which also means that diversity is a bad deal for Netflix. They have a direct financial incentive to have more people watch the same thing.
  - robertlagrant 2y ago
    It's not a "bad deal" - there will be lots of factors to consider.

samspenc 2y ago

The mind-blowing thing about this I found out recently, is that analysts think that Youtube is still losing money, even after making $31.5 billion in revenue! From 2015 "Some unnamed person at Google reportedly said that the site is "roughly break-even." https://www.cbsnews.com/news/4-reasons-youtube-still-doesnt-make-a-profit/ https://www.cbsnews.com/news/4-reasons-youtube-still-doesnt-... which in turn quotes https://www.wsj.com/articles/viewers-dont-add-up-to-profit-for-youtube-1424897967 https://www.wsj.com/articles/viewers-dont-add-up-to-profit-f... From March this year (2024): "Analyst Michael Nathanson of MoffettNathanson estimates that YouTube TV will become profitable this year" https://www.newscaststudio.com/2024/03/29/youtube-tv-profit-leader-2024/ https://www.newscaststudio.com/2024/03/29/youtube-tv-profit-... Part of this could be because they pay out roughly 40-60% of the revenue to the content creators, that leaves Google / Youtube with half the revenue that they use to pay salaries, maintain infrastructure, including storage, hosting and serving content.

rgbrenner 2y ago
Netflix spends over 50% of it's revenue on content production and licensing ($17B out of $30B), and they made $6B net profit in the past year.
- Ferret7446 2y ago
  Netflix doesn't need to subsidize anything. YouTube subsidizes a lot of videos which don't have ads.
  - rgbrenner 2y ago
    Netflix serves a slightly larger portion of internet traffic than YouTube on the same amount of revenue. So whatever subsidization youtube is providing for those videos, is clearly outweighed by the monetization of the remaining videos. YouTube has higher revenue per GB of bandwidth served than Netflix.
    - octodog 2y ago

huijzer 2y ago

I think this is the answer. Also, storage and compute purchase prices are probably falling roughly as fast (or maybe even faster) than their storage and compute requirements go up. So even with their massive storage requirements, I wouldn't be surprised if they are more profitable each year.