How Does Youtube Make Money?

YouTube was bought by Google in 2006 for nearly $ 1.7 billion. Earn money from advertising and subscription revenue. YouTube’s advertising network is part of Google Ads and generated over $ 15 billion in revenue in 2019. YouTube is also monetizing its paid subscriptions and premium content.

Original history on YouTube

Going back and looking at the history of YouTube can be a good exercise in understanding the huge success it has seen in a short period of time and what the YouTube business model will look like in the future.

YouTube Launch: It All Began at the San Diego Zoo.

On April 23, 2005, Jawed Karim, a boy born in Germany, moved with his family to Minnesota in 1992 and uploaded a video titled “Me at the Zoo:”

It was the first inaugural video shot at the San Diego Zoo for YouTube which shared the platform that would become the most famous site after Google in the period of about ten years.

According to the report by AdAge, as early as July 2006, “Youtube’s demand is increasing at a tremendous rate as web traffic to the video-sharing website increased by 75% during the week ending July 16, passing from 7.3 million to 12.8 million unique copies. Viewers, as per Nielsen / NetRatings, site traffic has nearly tripled (297%) since January, which made it the fastest growing online site. ”

YouTube Copyright issues and methods to fix them

As growth accelerated, problems with copyrighted content arose. The founders of YouTube met with media executives for convincing them of the business value of a YouTube listing.

Google to buy YouTube for $ 1.7 billion in not more than two years.

Explosive growth: how YouTube surpassed two billion views in 2010
In 2010, YouTube recorded more than two billion views per day. Only five years ago, YouTube’s founders, earlier PayPal colleagues, sat up all night testing and preparing the video-sharing place to be purchased by Google – just 19 months after that night!

By then, YouTube already had more than 2 billion views per day, much more than the US networks combined. In 2012, YouTube will increase the number by two folds. In 2012, YouTube continued to consolidate its enormous international expansion.

YouTube is one of the most famous platforms in the world.

As per the estimates from Comparable Web, from March to August 2019, YouTube is the second most famous platform across the globe, just after Google. And it has excellent participation statistics.

With nearly 30 billion total views per month, an average visit duration of over 23 minutes, and nearly 10 page views per session, YouTube is incredibly sticky.
This is also the reason for YouTube’s importance in Google’s business model. As the search engine changes, it offers more variety of content. In the upcoming times, Google may show more video content to users.

It could make YouTube even more valuable for many years to come.

YouTube Job Description

As elaborated on the YouTube site “We believe that everyone deserves a voice and that the world is a better place when we listen, share and build community through our stories.”

How Much Money Does YouTube Make?

As part of the economy for Google, we do not know the profit of this platform. In 2006, Google announced that YouTube’s revenue was “negligible” (in short, they do not have to write about it). but anyhow

Since the acquisition of Google, YouTube has contributed more than $ 15 billion through its ad engine alone. Other YouTube revenue is included in Google’s other revenue and relates to paid subscriptions to the platform.

This means that the YouTube acquisition has proven to be very successful so far, as the company can be worth between $ 50 billion and $ 100 billion (depending on the multiple you can use).

Is Advertising the Apt Business Model for YouTube?

As elaborated in Google’s yearly report: “As user-advertiser interactions change and online user behavior evolve, we continue to expand and develop our product offerings to meet your changing needs.

We expect our revenue generation trends to fluctuate over time. For example, we’ve seen an increase in engagement ads on YouTube, which are generating less revenue than traditional desktop search ads. In addition, we still see a change towards programmatic purchasing, which gives advertisers the opportunity to get in touch with the right users, at the right time and in the right context. Programmatic purchases have a different revenue generation profile than traditional purchases through ads on Google services.

Clicks paid through our Google real estate advertising program increased from 2016 to 2017 as a result of the increase in engagement ads on YouTube. The decrease in cost-per-click is mainly due to the continued growth of engagement ads on YouTube, where the cost-per-click is still lower than our other advertising platforms.

The media advertising business model is nothing new and is the main source of revenue for Google today, and we can well assume that it will be the main driver of Google and YouTube for years to come.

As explained in Google’s annual report, “We also saw revenue growth from YouTube, mainly driven by video ads on TrueView with an increasing contribution from ad purchases on DoubleClick Bid Manager, as well as format and format improvements. the dissemination of announcements. ”

The advertising business model is not the only one possible. Since Netflix became a multi-million dollar company with its subscription business model, YouTube has experimented with it as well.

Meanwhile, Google (now Alphabet) is turning YouTube into a full-fledged ad engine, which so far doesn’t seem so far removed from how Google makes money on its pages.

YouTube Premium, earlier YouTube Red, includes functionality on YouTube and the new YouTube Music application, and access to all YouTube Originals series and movies.

What does YouTube Premium mean?

Ad-free videos: watch millions of ad-free videos

Downloading videos for offline viewing: Saving videos and making playlists to mobile and view them offline

Background Playback: Continue to play videos while working on another application or during the time when the screen is off

What is YouTube Music?

Search music easily with the latest improved YouTube Music application.

Ad-free music – Continue listening to the songs ad-free

Download Music to Listen Offline: You can begin saving music and playlists in the YouTube Music application and later listening to them offline

Background play: Play the music while working on other apps or when the screen is off

Summary and conclusion

  • YouTube Ads machine made more than $15 billion in revenue for Google in the year 2019 only.
  • The organization is worth much more than $50 billion based on the multiple applications.
  • YouTube is also diversifying its revenue sources to numerous other services like paid memberships.
  • So far YouTube was one of the most successful acquisitions that Google, now Alphabet, has made.

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