this post was submitted on 28 Apr 2024
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I'm not here to defend the soulless multi-million dollar corporation, but we don't actually know how much money it costs for youtube to stay up. The scale they are operating on is immense, I wouldn't be surprised, if they were still making a loss with 10 midroll ads.
They almost certainly are running at a loss. Same as Twitch, their parent companies are generally okay with it, because they also serve as pretty solid tech demos for other services they offer (YouTube runs on Google Cloud Platform, Twitch runs on Amazon Web Services), and that pays off indirectly.
Moreover, their parent companies can use them as free advertising. Google about to launch a new phone? Guess what you’re gonna see ads for!
I think the term for this is “loss leader”
Big businesses are perfectly capable of releasing financial documents indicating what branches are making and losing money. If they don't do so, there's a good reason for it. Often that reason involves them doing things that are either shady or lying to the public about what's actually happening.
We should not give them the benefit of the doubt in situations like this, because we would only be feeding their manipulation tactics.
So they could either be making money in ways they are not proud of, or there is nothing to be (not) proud of in the first place.
Number of ads does not necessarily scale linearly to amount of income. If the ads alienate viewers, then they become worth less. I know I personally watch less when they started sometimes subjecting me to 30 seconds of unskippable ads to watch a 90 second video. Recently, I hit "skip ad" and it took me to another ad, which made me less likely. The other day whole watching a video someone told me to watch, I paused to look at some text. After a few moments it started rolling an ad while I was trying to read the text. The more this happens, the less likely I am to watch. Wild be interesting to know statistics on viewership versus more obnoxious ad behavior, but there's likely at least some decline in per ad avenue versus number of ads crammed in the face of viewers.
It's a fair point. The honest answer might be that with current technology there is simply no way to make Youtube profitable. If Google can't pull this off I don't think anyone can. In which case we will see a slow, but profitable death for Youtube as they make increasingly user-hostile moves, like raising prices, increasing ads, and eventually becoming increasing aggressive about deleting rarely watched videos. This will kill their user base over time of course, but they are still sitting on a massive treasure trove of content. The one thing in their favor is that storing and transmitting data gets cheaper every year. Maybe that's what they're holding out for.
Youtubes video platform's annual ad revenues amounted to 31.5 billion U.S. dollars in 2023.
Costs are $2.0 billion a year for hosting fees, if you were to run YouTube on AWS.
Take off creators fees and you are still in the black.