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Picture Of Struggling YouTube Emerges From Report
The Information published a report (subscription required) about YouTube that paints a picture of the Google division as falling short of its own, internal ambitions in terms of viewing hours and revenue. (The figures below are from 9to5Google, which published excerpts of the article.)
YouTube seeks to reach an internally set goal of 1 billion “watch time” hours per day by 2016. It currently reaches “less than 300 million” hours per day. However, that’s reportedly up from 100 million in 2012.
Gross revenues at YouTube were reportedly $3.5 billion in 2013. That was below many financial analysts’ estimates, which put revenue at or above $5 billion. Nonetheless, YouTube is apparently profitable, though, pays 55 percent of revenue to “content creators.”
Former ads boss Susan Wojcicki has been brought in to accelerate revenue growth into the “tens of billions of dollars.” She replaced Salar Kamangar, who remains at Google, earlier this year.
An anticipated, streaming music service was supposed to launch under the YouTube brand, but has been delayed — due to rights issues and/or internal disputes, depending on the report.
While millions of people watch YouTube regularly and its numbers reach or often exceed traditional TV, services such as Netflix and Hulu offer “professional” or “branded” content that YouTube mostly lacks. Google Play has that content; however, it resides outside of YouTube.
The article cites “Netflix, Facebook, Twitter, Vine, Amazon, Comcast, Yahoo and others” as part of the intensifying competition facing the Google division.
When YouTube was acquired in 2006 for $1.65 billion it was Google’s bid for TV-like brand advertising dollars. It was also seen by some as a “social network” acquisition at the time. Google has largely been successful attracting brand and TV-style advertising, but is not yet able to capture TV-like ad revenue.