For the first time ever, Alphabet has revealed how much the company makes from YouTube advertising. The company's three years of revenue figures shows that the numbers have risen from $8.15 billion in 2017 to $11.16 billion in 2018 and finally, to $15.15 billion in 2019, representing an 86 percent growth in revenue stream over that time. This rise has also resulted in YouTube ads accounting for 9.4 percent of the company's total revenue.
This reveal is important because it shows just how much more money YouTube is making for Google when compared with traditional cable TV. Ad-revenue numbers from 2018 show that NBC made a total of $7 billion, CBS made $6 billion, and Fox made a measly (by comparison) $5 billion. This makes YouTube a titan among media competitors, with 2 billion monthly users and 250 hours of video watched per day.
Despite the immense revenue stream coming in from YouTube, it's likely that most of that money goes back into the system to pay content creators who show those ads on their videos. Still, Alphabet CEO Sundar Pichai is optimistic: "There is significantly more room on [YouTube] monetization levels," he said.
YouTube's success should be no surprise to anyone who's been paying attention to digital ad revenue trends over the last few years. Revenue for digital ads in the United States passed the $100 billion threshold for the first time in 2018. And since digital ad dollars matched TV in 2016 and has surpassed traditional media spending, YouTube's ascension was just a matter of time.
When you consider that YouTube's parent company, Google, is the primary reason Alphabet has been so successful, it's worth wondering how much more successful the conglomerate will be if ad revenue and monetization levels continue to rise.
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