OTT (Over the Top) Content platforms have gained drastic traction in almost an exponential fashion, over the past 2-3 years. Thanks to such easy availability of genuine quantity of data to the common man, the taste and desire for authentic content has also shown an upward tick amongst masses.
We have covered plenty of articles showing reports of how more and more people are indulging and spending on subscription of various OTT platforms, rather than television packs. On similar lines, Sundar Pichai, the CEO of Alphabet and Google shared details of the company’s Q4 earnings on Monday.
He announced that Google’s OTT subscription TV service, Youtube TV has managed to bag more than 2 million subscribers in the U.S. Not just this, YouTube Music and YouTube Premium together have more than 20 million paying subscribers.
YouTube’s 2 Billion Monthly Visitors
Speaking of big numbers on Monday in Google’s Q4 earnings call, Sundar Pichai gave us a lot of details on Youtube’s ad revenue, for the 1st time.
Youtube subscriber base gave the video platform a $3 billion annual run rate as of the fourth quarter of 2019 for subscriptions and other non-advertising related revenue. According to Pichai, this is the first time the company has reported such subscriber numbers.
Alphabet’s announcement of the YouTube subscriber numbers was a signal to investors that the company believes it has more runway to boost subscription-service revenue. Not just this, these 22 million paying subscribers represent only 1% of the company’s total 2 billion monthly visitors.
Crunching Some Bigger Numbers
YouTube recorded $15.15 billion in ad revenue in 2019, which was reported to be 36% more as compared to the year before.
Speaking of Q4 2019, YouTube’s advertising sales turned out to be $4.72 billion, which in turn was a 31% year-over-year increase. YouTube’s ad revenue in 2019 was close to double over the prior two years.
As per Alphabet and Google CFO Ruth Porat, YouTube’s Q4 ad revenue growth was driven by a “substantial” uptick in direct-response advertising and “ongoing healthy growth” in brand advertising. She also said that the company pays the majority of YouTube’s ad revenue to creators.
- YouTube Premium, priced at $11.99 per month in the U.S., provides ad-free access to all videos: offline and background playback and early access to YouTube Originals.
- YouTube Music costs $9.99 monthly for access to songs and music videos without ads.
- YouTube TV, priced at $50 monthly, offers more than 70 live channels, including local stations, plus cloud-based DVR and other features.
Alphabet’s total cost of revenue was recorded to be $12.5 billion, rising 19% year over year. The biggest factors for this increase were costs for Google’s data centres and content-acquisition costs.
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