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Comment by iwanttocomment | Hacker News Reader

YouTube generated $31.5 billion in advertising revenue in 2023.

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.

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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-... which in turn quotes 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-...

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.

YouTube TV !== YouTube

YTTV is their "cable" product

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.

Netflix needs less storage than YT, because not everyone can upload to Netflix. This also makes edge caching easier.

Netflix doesn't need to subsidize anything. YouTube subsidizes a lot of videos which don't have ads.

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.

Netflix technically doesn't serve anything that isn't monetized YouTube does, and to some degree non-monetizable content skews the numbers Also, due to the nature of YouTube a large amount of content is repeated but still taking storage

Netflix needs (1) a copy of say Top Gun Maverick (And maybe variations for different resolutions), YouTube needs a bazillion Copies of it with small variations, clips with different music, people "commenting" on it, people actually making commentary, Highlights, YTP's, etc all of it with a wider range of resolutions and also to way more people, plus the overhead of checking against their master copy of copyright infringement

Do you have a source for that? I am surprised that Netflix would be bigger than YouTube.

> Do you have a source for that? I am surprised that Netflix would be bigger than YouTube.

Sandvine is the usual source in the industry and they say: "Sandvine's 2023 Global Internet Phenomena Report Shows 24% Jump in Video Traffic, with Netflix Volume Overtaking YouTube"

https://www.sandvine.com/press-releases/sandvines-2023-globa...

I wonder whether Netflix has a lot less content to cache, so they can push much more to edges.

Of course it's break-even if you don't want to pay taxes but prefer to pay employees more instead. Sure maybe Youtube itself is break-even but how many people inside it become rich?

Youtube TV is their cable replacement, not related to the website at all really.

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.

Netflix content is highly coachable (tiny library Vs YouTube), which dramatically reduces the cost of serving the data to users.

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.

I thought it was more directed towards "Coachable" as getting to select and train /trend towards more profitable content

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.

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.

It's not a "bad deal" - there will be lots of factors to consider.

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.

Revenue is not net profit.

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

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