This is another sign of how youtube’s story of “we’ve never made a profit” is bogus. More and more organisations are advertising on youtube, youtube is pushing the limits on the amount of advertising that viewers can stand & at the same time they’ve started paying creators less.
It looks like they’ve really started abusing their market position in the last few years: more income and less expenditure. And it’s probably no coincidence that there are no financial figures for youtube alone.
Ok, what are the alternatives? A fully kitted out server rack, switches, redundancy, CPUs, multiple drives, backup storage or tapes, backup batteries, own power supply, software and licenses can cost as much as a new mid sized car?
Asking for a friend…
I found an estimate of annual expenditures of 3.25 billion, without content payouts, but with engineering/legal/moderation costs. As 2024 revenue I found back 36 billion from advertising & 14.5 billion from subscriptions. Forbes had an article where Google claimed to have paid out $70bn in 2021-2023 to content creators, this number probably includes subscriptions. In those 3 years youtube had an ad revenue of 89.5 billion, but I have no number for subscriptions. These are all very opaque numbers. Based on these opaque numbers, I’d guesstimate youtube’s profit margin at 42%, which I find excessive.
Edit, how I got to my guesstimate of 42%:
36bn ad revenue in 2024. An average of 30bn ad revenue in the 3 years prior. Estimation for the subscription income in those 3 years: 30/36 x 14.5 x 3=36 billion. 73bn expenditures & 126bn income = 53bn profit. 53/126 = 42%.
This is another sign of how youtube’s story of “we’ve never made a profit” is bogus. More and more organisations are advertising on youtube, youtube is pushing the limits on the amount of advertising that viewers can stand & at the same time they’ve started paying creators less.
It looks like they’ve really started abusing their market position in the last few years: more income and less expenditure. And it’s probably no coincidence that there are no financial figures for youtube alone.
Someone did the math and estimated YouTube would cost $2bn in cloud costs (i.e. no creator payments) if hosted on AWS.
AWS is incredibly expensive, if you’re hosting something like GitHub or Netflix on them instead of just owning the servers, you’re incredibly dumb
Ok, what are the alternatives? A fully kitted out server rack, switches, redundancy, CPUs, multiple drives, backup storage or tapes, backup batteries, own power supply, software and licenses can cost as much as a new mid sized car? Asking for a friend…
I found an estimate of annual expenditures of 3.25 billion, without content payouts, but with engineering/legal/moderation costs. As 2024 revenue I found back 36 billion from advertising & 14.5 billion from subscriptions. Forbes had an article where Google claimed to have paid out $70bn in 2021-2023 to content creators, this number probably includes subscriptions. In those 3 years youtube had an ad revenue of 89.5 billion, but I have no number for subscriptions. These are all very opaque numbers. Based on these opaque numbers, I’d guesstimate youtube’s profit margin at 42%, which I find excessive.
$36bn ad revenue + $14.5bn subscriptions: https://www.businessofapps.com/data/youtube-statistics/
$3.25bn annual expenditures: https://www.clrn.org/how-much-does-youtube-cost-to-run/
$70bn payed out to creators from 2021 to 2023: https://www.forbes.com.au/news/innovation/youtube-70-billion-creator-payments/
Edit, how I got to my guesstimate of 42%:
36bn ad revenue in 2024. An average of 30bn ad revenue in the 3 years prior. Estimation for the subscription income in those 3 years: 30/36 x 14.5 x 3=36 billion. 73bn expenditures & 126bn income = 53bn profit. 53/126 = 42%.
Does that include the storage costs of the existing exabytes of videos, plus the terabytes of new videos being uploaded every day?
If they’ve never paid taxes then they must never have turned a profit.
Checkmate.