YouTube reached over $15 billion in advertising revenues last year.
That figure was included as part of the platform’s first ever publicly disclosed advertising revenues (see below), published yesterday (January 3) by parent company Alphabet in its financial results for Q4 and fiscal year ended December 31, 2019.
It was also revealed yesterday that YouTube’s advertising revenues reached nearly $5bn ($4.7bn) in the three months ended December 31, which was up 31% year-on-year – an average of $1.57bn per month. (That’s in the region of $50m every single day, for those looking to contextualize how much cash YouTube is generating as you read this.)
The annual growth of YouTube’s ad revenues are startling: in 2017, says Alphabet, the platform turned over $8.15bn in advertising revenues; in 2018, this annual haul grew by just over $3bn to $11.16bn; and in 2019, this yearly figure grew again by nearly $4bn ($3.99bn) to $15.15bn.
According to Alphabet CEO Sundar Pichai, who took over the leadership role from co-founders Larry Page and Sergey Brin last year, the new revenue disclosures have been made “to give greater insight into our business”.
Speaking during the company’s earnings call, Pichai added: “We are pleased with YouTube’s growth in advertising and subscriptions and we are also pleased with the early results from other revenue options we offer creators, including memberships, brand integrations, merchandise, and ticket sales.”
“We are pleased with YouTube’s growth in advertising and subscriptions and we are also pleased with the early results from other revenue options we offer creators, including memberships, brand integrations, merchandise, and ticket sales.”
Sundar Pichai, Alphabet
In addition to the advertising revenue disclosure, Alphabet revealed that YouTube has over 20 million paid subscribers across YouTube Music and YouTube Premium, as well as over 2 million YouTube TV paid subscribers.
Those subscribing to YouTube Premium – which costs $11.99 a month in the US – receive a full subscription to YouTube Music as part of their package.
Meanwhile, YouTube ended 2019 at a $3bn annual run rate in subscriptions and other non-advertising revenues.
Also speaking on yesterday’s earnings call, Ruth Porat, Chief Financial Officer of Alphabet and Google, said that a majority of YouTube’s ad supported revenues are paid out to creators, “reflected in our content acquisition costs”.
Back in 2018, YouTube claimed that it had paid out over $1.8bn to music rights-holders in the 12 months to the end of September that year in advertising revenues alone.
The $1.8bn figure was revealed in Google’s ‘How Google Fights Piracy’ report, in which it was also claimed that YouTube had paid out more than $6bn to the music industry by that point in time – $3bn of which had come from the monetized use of music in videos via Content ID.
“We continue to invest across YouTube to grow over the long-term. In the ad supported proportion of YouTube, we pay out a majority of revenues to our creators, reflected in our content acquisition costs.”
Ruth Porat, Alphabet/Google
Added Porat yesterday: “We continue to invest across YouTube to grow over the long-term. In the ad supported proportion of YouTube, we pay out a majority of revenues to our creators, reflected in our content acquisition costs.
“On top of that, there are other expenses, including infrastructure and networking costs, as well as the costs of our content responsibility efforts to keep YouTube safe for users, creators, and advertisers. We’re also investing meaningfully to grow our subscriptions, which have higher content acquisition cost ratios.
“And then in YouTube, as I mentioned in opening comments, we do continue to build out our subscription services. It’s still in the early days there and we’re making a sizeable investment to build it out, taking a long-term view here.”
In 2019, Alphabet recorded total revenues of $162bn, up 18% YoY and up 20% on a constant currency basis.
Search and other Google properties contributed $98bn to that figure.Music Business Worldwide