YouTube's $60B revenue revealed amid paid subscriber push
bbc.com
bbc.com
I think the magic wasn’t in those apps or websites but the traction they got and how that was preserved. Both FB and Google were very careful to preserve the origins when evolving.
I remember Google videos, it was very bad. If this wasn’t Google but Microsoft, they may have tried to integrate Youtube into their Video platform and destroy everything.
Being good custodian is just as important.
Many here will be familiar with how the founders of these tech companies basically keep control over their companies while holding minority stakes through different classes of shares. Zuckerberg was the only one to hold these shares I believe and could basically authorize the IG purchase by himself. And that's what he did. He told the board after the fact. At least that's the story I read.
IG was growing fast but it blossomed under FB's stewardship in a way that I'm not sure it would've had it stayed independent or someone else had bought it. For many years, IG was allowed to operate semi-autonomously within FB (kinda similar to Youtube under Google actually). They continue to have their own tech stack, which has caused its fair share of problems, and essentially operated seprately from a product perspective.
But scaling requires a whole bunch of infrastructure that isn't all technical. Things like site safety, taking down problematic content, creating an ads ecosystem and so on. FB had a lot of expertise and existing infrastructure for all of this because of, well, Facebook. And whatever fauts FB has, this is something they did very well.
I totally think Google would've screwed it up, for example.
I guess my point is that they didn't exactly buy a $100B+ business for $1B. They turned it into a $100B+ business. Just like Youtube.
That being said, I think IG has actually faltered from a product perspective over the last 5+ years. Reels (like Youtube Shorts) are a kneejerk reaction to Tiktok, who is eating both of them alive in short-form video. And Tiktok's recommendation algorithms are a step above of anything I've seen on FB, IG or Youtube.
I was never a big IG user but from what I hear from people who are or were and what I read online, it feels like IG has kinda lost its way and nobody really knows what it's for anymore. It's certainly not for sharing among your friends (which is how FB started too). Photo-sharing seems to be falling away to video. So who exactly is it for?
That's because their main UI isn't anything like Tik Tok. You start out with a normal feed on IG, on YouTube you might see recommended videos, but its not BAM HERES SHORT FORM. Tik Tok was by design this UI and recommendation scheme. I think its a UX issue not an algorithm issue necessarily. If I open YouTube shorts I get a lot of the content I keep going back on YouTube to watch, on IG probably not since I dont use FB or IG much if at all. If these UIs were more prominent, I could see them matching or competing with Tik Tok on these fronts.
What's funny to me is Tik Tok users quitting Tik Tok because they think the US has poisoned it, and then running to YouTube or reddit. Look on r/tiktok sometime, I have been checking on it anytime Tik Tok has 'drama' and it never disappoints.
But it's more than that.
When I started using Tiktok, Charli D'Amelio was the biggest creator I believe and not once did I ever see one of her videos. I'm just not in that demographic. I've had repeated experiences on Tiktok where I'd see a new creator and see they have like 17M followers and I'd think "how have I never heard of them before?"
The way I describe this is that Tiktok's content is effectively segmented and isn't "global". By "global" I mean if someone is a top creator on IG or FB or Twitter, you'll see them. The platform will push them out to you and Tiktok is just more sophisticated than that.
The second big difference is the responsiveness. It takes other platforms longer to learn. Maybe they've gotten better now but, from what I know, historically other platforms had daily jobs that updated user recommendation preferences based on your activity. So if I started watching a lot of gaming videos, this wouldn't be reflected in my feed until the next day. Tiktok I think was the first to have a truly real-time updating feed.
Now this isn't a straight real-time vs overnight situation. It is/was more hybrid than that. So in FB's case, recommendations were more real-time but updating your preferences wasn't.
Insta was tapping out of how much content (and therefore ads) they could show a user. They could either find new content to show or add more ads per unit of content. There are only so many friends, who only take so many photos. Social media stopped being “social” because it just wasn’t as good of a business as generic media. There are endless influencers and videos is way more engaging. Influencer content is semi-professional content and is way better made and way more engaging than your family who posts only at big events. Meta is very data driven, and they understand exactly how reels is increasing duration of app sessions - which means more ads.
UX is getting worse too, e.g. the save to list dialog closing after adding to a single list instead of allowing multiple to be selected. It wouldn't be so bad if it didn't take forever to open.
1) Spacebar sometimes skips to the next video when playing a playlist. Just why?
2) You never know if the small buttons like play next on the thumbnails will work or just play that video right away.
2) when on the homepage, you open a few videos in new tabs and close the homepage only to find out that you just open bunch of “this video contains paid promotion” disclaimer pages. Re-open the homepage to actually open the videos and they are all gone, the page shows a grid of different videos.
so yes, I agree that the web interface went downhill.
A bit like Google Maps though, a great visionary early investment that they then poured a lot of $ into to make them what they are today. No one else was just providing free satellite imagery for the entire world back then, not even Google Maps.
The investments to support these two products at least, have been really important in helping Google maintain its hold in other places too.
Lots of people still whinge about youtube, but standing up a solid competitor would take too many $ for anyone but other big tech now.
if they weren't, won't it make sense to drop it? So by empirical observation of the outcome, it seems like youtube produces enough value to google that it is worth the investment!
Now if you ask whether youtube is financially net-positive; ala, if youtube were to be spun off as an individual/separate entity without being owned by google, then that's another question altogether. I have doubts it is financially net-positive without the leverage that google provides in utilizing youtube's assets.
Looking back, I’m still pretty amazed they got so much of it right. Which is to say, a good chunk of the value wasn’t in the value of YouTube itself but in what Google brought to the table _or_ a synergy between the two.
Youtube came along and was basically spending money like there was no tomorrow. Well, for the time. It's nothing compared to the current crop of AI companies. So with Youtube, everybody was terrified of the bandwidth costs, with good reason. The cost to build a sufficient network was exorbitant using off-the-shelf hardware.
Google runs their own networking hardware and servers at the efficiency level at the time that was unprecedented. They measure things in a unit called PUE (power unit effectiveness). That's basically how many Watts each Watt of computing power cost. Things like cooling would eat that up. Typical data centers at the time were at like 1.5-2. Google's own data centers were more like 1.1. Google was actually lying and saying it was 1.2 and people didn't believe it was that low. The best Google data centers are I believe more like 1.05-1.08 now. Passing cooling and that sort of thing contributes to this.
So Google of anyone had the cost controls on computing power and and networking like nobody else. And Youtube was burning VC cash. That's why they got it so "cheap".
This still created huge problems for Google and as Youtube continued to grow it was heavily impacting national ISPs, peering connections and the like. When Youtube was acquired they came up with a bandaid solution (called Bandaid) where they bought commercial server racks from Dell and elsewhere and loaded their own software on them. They would give them to big ISPs. The software would locally cache the most popular Youtube videos to cut on the ISP's bandwidth costs and the latency. I believe that this temporary solution became permanent and continues to this day.
Nobody could monetize Youtube like Google either as in nobody else has a remotely comparable ad infrastructure and ecosystem.
And lastly, nobody could encode video like Google could. Nobody else had access to that much computing power and could use it as efficiently. That was a huge deal because the encoding requirements are massive.
So yes, it was an amazing acquisition but I think if anyone else at the time bought it, they would've failed.
Absurd? YT was acquired for 1.5 billion USD back in 2005 / 2006. (Google was already a billioncompany back then)
I tell you one thing: They are sitting in the basement each evening, counting the cash and laughing their ass off :-D :-D
Guaranteed :-)
This was by far one of the most strategic decissions they ever made.
There are also bussiness accounts which are really important depending on the location.
It is very hard to put a price to that, but its value is undisputable.
After that acquisition, they made it free for all and started chasing the $$$ with WhatsApp for business. And ads. No idea which is more profitable anymore. I think they'd still be able to monetize it more with WhatsApp payments and those ads in status updates. I'd definitely like to know what the numbers are looking like these days..
It was, but it was very cheap (UK pricing was £1 a year), and I believe had lots of free users anyway. My guess is that the revenue wasn't worth pursuing.
Meta isn't a charity. If they aren't making money off WhatsApp outright, the users are the value and they're making money off them some other way, encryption be damned.
Out of the 60bn they made only 325 ml from paid subscribers. The title made it like it was an important figure. There's also no YOY numbers or profit so it's difficult to draw a conclusion.
[1] https://outlierkit.com/resources/youtube-60-billion-revenue/
Recently a significant percentage of the folks I follow stopped making videos.
I wonder if this is a fair comparison, though. It strikes me that Netflix’ revenue model is simpler and their costs are also lower, but I guess we won’t know YouTube’s costs any time soon.
Netflix's content pipeline is hella expensive, due to their being boycotted by major content owners (like disney).
So i would imagine that youtube's revenue model is more efficient and thus generate a higher return than netflix's.
only if that video generated sufficient revenue to pay out - which is quite a high bar. But the long tail of content is what draws people onto youtube as a platform - so youtube derive a benefit from this long tail content that they do not pay for.
However, the long tail for netflix won't have this advantage at all (because even niche shows with low audience will cost money to produce).
Not to mention that netflix has to pay upfront for their content. Where as youtube only pays _after_ the content has had ads displayed that generated revenue.
One might imagine that the cache-ability is lower than Netflix, I can't comment on this, but GGC is very significant.
500 hours of video getting uploaded a min plus processing costs (including AI) for no upfront $$s. Far simpler CDN optimization
How so? Netflix has to license or produce all their content.
325 million people that don't know about Firefox and uBlock Origin?
So yeah, take my $13.99/month
Youtube is just profiting from it, by shoving mostly shitty ads in your face.
Just because it was the first one to gain traction..
• the good stuff is VHS-quality TV content that somebody pirated
• the ads, once nonexistent, are typically disreputable and now incessant
• the few 'creators' worth watching are lost in an ocean of audience-captured, brain-dead garbage "hey guys... [product placement disguised as organic content]... misinformation... remember to like and subscribe... [product placement disguised as organic content]"
• access becomes increasingly arcane due to ad-blocking measures
• one of the lowest quality comments sections - largely inorganic, rogue state-sponsored - on the internet
• increasingly just AI slop
The day I can't scrape videos via yt-dlp is last day I permit youtube domains on my network. Personally, I would prefer to eat a rotten cat carcass than pay a single cent to Youtube.
In a better world, youtube would be some kind of a protocol, not a mediocre company serving as a middleman.
For the TV, I would suggest VacuumTube (a frontend to the Leanback interface) on a free/libre box running Linux.
It works on Android and PC.
Well, first you can use youtube on your phone, tablets etc, without seeing ads ever, I didn't realize youtube has ads.
Initially, my kids would ask for toys and fast food that I knew they didn't know anything about. So I realized family subscription is way cheaper then me buying even a single $25 toy, and most of them were more expensive.
Over the years, my kids have grown healthier both in mind and body thanks in part of that subscription.
Now look where we are with short-form video, particularly Tiktok.
That's a lot of moolah!
Still frankly one of the few redeeming aspects of YouTube. My feed is disastrous.
My usage of Youtube seems to be near 100% intentional, meaning I'm looking for something in particular. I just don't really use Youtube for discovery. I'm sure other people differ. But I really wonder how much of this comes down to the UI and/or algorithm just not being that good.
the closest I get really is looking at my home page sometimes and seeing what channels I've previously watched have new videos, basically.
Now compare this to Tiktok. My usage of Tiktok is 99% on my fyp. There's a follwoing tab but I basically never use it. Almost everyone I follow I've found on my fyp. It's so good too. A big part is how quickly it learns. Watch one video on a topoic and you'll quickly be prompted with others in that category.
But how much of this is just the usage patterns I have chosen with Tiktok that I didn't for Youtube for largely historical reasons? I honestly don't know.
I've tested this many times. Your feed has what you watch. If it's disastrous, that's because that what you actually like to watch.
Stop watching a topic and it will go away. About 2 months later YouTube will offer it again to see if you want it, if you don't it goes away again.
I seems your feed is more consistent than mine.
And finally if you regularly watch stuff subscribe, it's a strong preference indicator.
I do get some junk in my feed now and then, but mostly I discover good stuff I enjoy. And that includes really small channels.