It upsets me to see YouTube Premium apologists despite all the hostile moves by YouTube. YouTube Premium is an extortion scheme. When there are enough paying customers, YouTube Premium will begin showing ads to them. They won't forget sugarcoating ads as being “unobtrusive” or “environment-supporting” or whatever. But guess what? If you don't want to see them, you can upgrade to YouTube Premium Plus and continue being an apologist.
One might also say it was unsustainable from the start, video is incredibly expensive to host and especially moderate.
All we're seeing right now is the beginning of the end of the ad-financed world. Someone has to pay the bills in the end and advertisement spending is on the way down, more and more of it is going to influencers/TTL instead of traditional ATL/BTL marketing.
While that may be true, subscription services are a capitalist move that’s pricing premium well above profit margins.
‘YouTube is failing because free tier is too expensive to be offset by ads’ and ‘YouTube premium is overly expensive’ can both be true. Shareholders care about maximising profits now, not overall product longevity.
> While that may be true, subscription services are a capitalist move that’s pricing premium well above profit margins.
Agree in principle, but I'd raise the serious question if Youtube is profitable in the first place. Every minute, 500 hours of video are uploaded [1], so the storage growth given 1.5 GB/h is at least (not including compression, duplication across multiple DCs, edge nodes, whatever) 750 GB / minute, 45 TB / hour or 1.080 TB / day.
At 10 $/TB (and that is a figure from before the AI boom making all costs explode) they have to spend 10.800 $ per day just in HDD costs, on top of that comes the server hardware, racks, switches, datacenter construction costs, and then the cost of running all of that - electricity for the servers, cooling, internet egress bandwidth (in total, all video sites made up 65% traffic of the entire Internet pre-AI boom).
It is estimated that YT makes about 36 billion $ of revenue [3], assuming a split of 50/50 with creators [4] that means 18 billion $ end up in Youtube as gross revenue. From that, take off 10% for music licenses (estimated [5]), 25% for taxes (assuming for simplicity an average 20% corporate tax plus 5% VAT), that leaves 11.7 billion $. And that's... not that much, given that R&D, infrastructure investment, advertising expenses, costs of preferential deals with device manufacturers and phone carriers ("zero rating"), operational expenses (i.e. electricity, bandwidth) and headcount (moderation!) haven't been taken into account.
In the end, I think that unlike 2015 [6] Youtube is actually profitable - but barely, nowhere near close to the profit margins of Google Ads. Certainly not enough to appeal to the stonk markets and beancounters, and that is what drives the ever increasing push for ads and premium.
As a side question... I think what irks Google the most is that individual "influencers" can make millions of dollars in monthly income from sponsorships but Google sees nothing of that money at all.
But think how hard it is for them to earn money to make up for all the billions they’ve used to create de facto monopoly in video space? Won’t someone think of poor capitalists trying to squeeze the niche dry?
