According to a new report, YouTube isn’t making any money despite its overwhelming dominance of the online video space.
YouTube attracts more than a billion users every month, yet it still doesn’t contribute to parent company Google’s bottom line.
According to the Wall Street Journal, while YouTube posted revenue of about $4 billion in 2014 – some six percent of Google’s overall sales – it didn’t end up contributing to Google’s earnings.
YouTube’s massive investment in content and equipment has apparently meant that it is only able to break even.
In actual fact, while it sounds like a lot, YouTube’s revenue is relatively poor. Compare it to Facebook, which attracts a similar number of users to YouTube, and the figures look grim. The social network managed to make $3 billion of profit from $12 billion in revenue last year.
The reason YouTube is struggling to bring in a similar amount of money to Facebook is because of the way its users access its content.
People don’t commonly navigate to YouTube’s home page hub, which is where all of the rich advertising content possibilities lie. Rather, they access YouTube videos through links and embedded videos on other websites.
Read More: Netflix vs Amazon Prime – Which is best?
Google and YouTube are trying to make YouTube more of a destination in and of itself by creating more original content. However, on that front it faces stiff opposition from Netflix and Amazon, while there’s also the looming threat of rival video services from Facebook (again) and Vessel, which is said to be poaching YouTube’s stars.
In other words, while YouTube continues to rule the world of online video for now, it’s not going to find it any easier to turn a profit in future.
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Editorial independence
Editorial independence means being able to give an unbiased verdict about a product or company, with the avoidance of conflicts of interest. To ensure this is possible, every member of the editorial staff follows a clear code of conduct.
Professional conduct
We also expect our journalists to follow clear ethical standards in their work. Our staff members must strive for honesty and accuracy in everything they do. We follow the IPSO Editors’ code of practice to underpin these standards.
