As more advertising dollars flow to YouTube, it's making the already hugely profitable Google even more prosperous. On Thursday, Google's corporate parent — Alphabet Inc., based in Mountain View, Calif. — said the company overall earned $5.1 billion, or $7.25 a share in the third quarter, up 27% from the same quarter last year. After subtracting advertising commissions, revenue climbed 21% to $18.3 billion. Both figures beat analyst projections.
Making a lot of money on YouTube is not as easy as you might think. There are a lot of hurdles to overcome in the process. It's definitely not a way to get rich quick. However, if you have a hobby, are really good at a particular activity and would like to help people, are funny, or even if you just want to have some fun, YouTube is a great option to cash in some extra bucks doing something you love.
All that money is providing Google with more financial firepower to buy the rights to stream cable networks' shows on YouTube, too, which is likely to reel in even more viewers. It also is helping finance Alphabet's investments in projects such as self-driving cars and Internet-beaming balloons. That segment, known as Other Bets, lost $865 million during the July-September period, narrowing from a $980-million setback last year as Alphabet imposed more expense controls.
Should PewDiePie have known better? His critics say yes; though he has been dismissive about the uproar, this is far from the first time he has dabbled in alignment with alt-right beliefs, and he’s previously faced backlash for this type of incident so many times that it now seems more than a little intentional. But PewDiePie and his supporters say his critics are overreacting to a harmless mistake — all while tens of thousands of new subscribers have followed the anti-Semitic channel based on PewDiePie’s brief endorsement.
And though they don't appear to be huge revenue contributors at this point, the YouTube Red and YouTube TV subscription services can't be overlooked when trying to value the company. Particularly YouTube Red, which provides ad-free YouTube, some original shows and access to the Google Play Music service for $10 per month, and which led YouTube to become the top-grossing U.S. iPhone app in March. Later this year, Google plans to replace Google Play Music -- in many ways Red's weak link -- with YouTube Remix, a music service that's fully integrated with YouTube.
So, predictably, by the time it was 10 a.m., I had made and consumed two cups of coffee, taken out the trash, cleaned my room while taking a deliberately slow approach to folding my shirts, gone on a walk outside to clear my head, had a thing of yogurt and fruit to reward the physical exertion, sent an email to my aunt and sister, read about 100 Tweets (favorited three; written and deleted one), despaired at my lack of progress, comforted myself by eating a second breakfast, opened several tabs from ESPN.com on my browser ... and written absolutely nothing.
We have strict rules on what's allowed, and a system that enables anyone who sees inappropriate content to report it to our 24/7 review team and have it dealt with promptly. We educate our community on the rules and include a direct link from every YouTube page to make this process as easy as possible for our users. Given the volume of content uploaded on our site, we think this is by far the most effective way to make sure that the tiny minority of videos that break the rules come down quickly. (July 2008)
What kind of sales multiple does this fast-growing video juggernaut deserve? It's tough to think of a direct comparison. Netflix, which trades for over eight times its 2018 revenue consensus, relies on subscription revenue rather than ads. And whereas YouTube largely relies on ad revenue-sharing deals with content partners, Netflix directly pays its content partners for their material.
The good news is that income is rising, but efforts to generate a broad and loyal audience that turn to the service on a regular basis for original content appear to have hit a wall. The Journal points out how three years ago YouTube spent hundreds of millions of dollars on original content to build new channels, only to see many of them fail. Getting people to visit the site directly and regularly because there’s something specific they want to see, rather than dropping by occasionally via a link on another site or online service, appears to be a big challenge for the company.
Chandar met me and led me into a massive conference room. In addition to being the CEO, he composes music for ChuChu. He’s the public face of the company and, at 39, a few years younger than the other four founders, who each hold an equal stake. He sent a young man to get me a coffee, and then we sat down together with his friend B. M. Krishnan, a former accountant and a ChuChu co-founder who is now the company’s chief creative officer.
But what about the cost of servers, bandwith etc? I think it might be in the range of $750 million per year to as high as $1.5 Bn plus ( we will never know as Google never reveals cost of running youtube, and Google has invested heavily in this space ). I feel Youtube as a standalone business MAY NOT be as profitable a biz as Search and might never be since barely 10% of its content is actually monetizable. But for Google, with $30 Billion revenues, Youtube losses( even if money lost is as high as say $500 million per year) is chump change considering the strategic advantage it gives visavis competition. (Microsoft online businesses lost way more last 10 years). Youtube subsidy by Google has created a monopoly which has effectively destroyed all independent video ad network business plans.
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Though the furor around PewDiePie’s repeated antics has subsided after each of these incidents, his courting of alt-right ideas has not. Though he has never openly identified himself as a member or supporter of the alt-right, he has continued to like and promote channels run by alt-right-affiliated users, and earlier this year, he made a video in which he reviewed the right-wing personality and alt-right hero Jordan Peterson’s controversial self-help book. In the review, PewDiePie endorsed the book, called it a “fun” read, and said he would take some of its advice.
In January 2015, Google announced that 360-degree video would be natively supported on YouTube. On March 13, 2015, YouTube enabled 360° videos which can be viewed from Google Cardboard, a virtual reality system. YouTube 360 can also be viewed from all other virtual reality headsets. Live streaming of 360° video at up to 4K resolution is also supported.
YouTube was founded by Chad Hurley, Steve Chen, and Jawed Karim, who were all early employees of PayPal. Hurley had studied design at Indiana University of Pennsylvania, and Chen and Karim studied computer science together at the University of Illinois at Urbana-Champaign. According to a story that has often been repeated in the media, Hurley and Chen developed the idea for YouTube during the early months of 2005, after they had experienced difficulty sharing videos that had been shot at a dinner party at Chen's apartment in San Francisco. Karim did not attend the party and denied that it had occurred, but Chen commented that the idea that YouTube was founded after a dinner party "was probably very strengthened by marketing ideas around creating a story that was very digestible".