They take 45% of YouTube premium subscription revenue. That’s higher than the App Store (30%), Spotify (30%), and any other content marketplace on the internet.
I think they get a free pass for now because they allow creators to monetize with their own native ads within videos. If I had to guess, this may become a point of contention in the future…
The fact that we’ve accepted such ridiculously high profit margins from tech companies is simply due to their network effects monopolies, and the impossibility of competing with them.
Just look at any other marketplace business with more competition, like say a grocery store or any brick and mortar retail. Their net margins are often sub-5%. Physically shipping goods across the world is far more expensive than delivering video.
Only other monopolies, like Governments, can get away with charging 45% taxes. Having known a few Youtube employees and also a few federal government employees, I would say the low stress, low effort, low fear of layoffs, low work output expectations are...ahem...similar.
Youtubes profit margin isn't that high so it is pretty close to that, it took a long time for it to get profitable even with Google ads, unlike the digital stores that serves customers for basically nothing compared to how much revenue they bring in.
Twitch also takes around that much from streamers and they still aren't profitable since it costs more to serve the streams than they make.
And then charge even higher rate if you give them more money. Ask them how they spend it? Proudly poorly. /rant
Are you sure? It is a logistics issue, not a technology issue. Streaming video, near instantly, around the world, without any perceivable user-experience issues, infinite times, for infinite users is a massive-massive technology issue.
Amazon same day deliver was problably the most revolutionary thing that came to the domain, but otherwise shipping 1000 cars across the world, while impressive, is a pretty straight forward task. The technology that you need are ships and trucks. You can use a 1950s era technology to do that.
Do you think bandwidth and storage are free?