Despite revenues of US$4bn, YouTube isn’t actually making Google any money

26 Feb 20153 Shares

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Even though much online media content is filtered through YouTube with 100 hours of content uploaded every minute, the site’s revenues of US$4bn is only breaking even for its owner Google.

The figure of US$4bn covers its revenues for 2014 and actually marked a 25pc increase on the previous year, having made about US$3bn in 2013, which The Wall Street Journal attributes to the site’s roll-out of its Google Preferred premium adverts service.

Speaking last week, Robert Kyncl, head of content at YouTube, said customers now spend 50pc longer watching his company’s videos, and Google Preferred has driven revenues up 70pc for those taking part.

However, while YouTube accounts for 6pc of Google’s overall revenues, the site is having difficulties in developing a regular audience who would ‘tune in’ to YouTube to follow their daily subscriptions, outside of the younger demographics, particularly teenagers and children who flock to watch YouTube stars such as PewDiePie, Zoella or StampyLongHead.

Another issue, the paper highlights, is that much of YouTube’s content is used outside of the site itself through embedded links, which doesn’t count as a site visit.

There is also the growing issue of competitors coming into the fray, particularly social network Facebook, which is attempting to use the power of its 1bn-plus daily users to draw traffic away from YouTube. So instead of linking to Google, it could share videos directly through Facebook, which is all good for advertisers.

Author of the piece Rolfe Winklers says Google is now looking to follow its social media competitor by introducing auto-play videos as a means of offering better options for future advertisers.

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Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com