Analysis

Google claims ‘significant growth in YouTube revenues’


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Google’s latest financial results have impressed Wall Street, with the company reporting revenues of $17.7bn (up 11% year-on-year) and a net profit of $3.9bn for the second quarter of this year.

And Google pulled out two factors in particular as responsible for its growth: “Ongoing momentum in our core search business particularly mobile, complemented by significant growth in YouTube revenues,” as its CFO Ruth Porat told analysts.

YouTube loomed large during the analyst call. “Growth in watch time on YouTube has accelerated and is now up over 60% year-over-year, the fastest growth rate we’ve seen in two years. Mobile watch time has more than doubled from a year ago,” said Porat.

SVP Omid Kordestani provided more stats. “On mobile alone, YouTube reaches more 18 to 49 year olds in the US than any US cable network,” he said. “On mobile the average viewing session is now more than 40 minutes – up more than 50% year-over-year.”

That’s an important figure, reflecting how people – and young people in particular – are using YouTube on their mobile devices. This isn’t just snacking: it’s moving towards television-style viewing sessions.

Advertisers are gravitating towards them too: “The number of advertisers running video ad on YouTube is up more than 40% year-over-year and for our top 100 advertisers, the average spend per advertiser is up over 60% year-over-year,” said Kordestani.

It is no surprise to see Google talking more about YouTube’s growth, even if some stats (breaking out its revenues and profitability) remain private – latest estimates suggest $4bn of revenues in 2014, when YouTube was roughly break-even.

Facebook is preparing for a big push into ad-supported video; Snapchat is giving its video-heavy Discover section more profile within its app; and new players from Twitter to Spotify are courting advertisers with their own video offerings.

Yet YouTube, with its billion monthly viewers, remains the 900lb gorilla in the zoo, with an advertising business that appears to be accelerating. While music wasn’t mentioned directly during the analyst call, labels and publishers will be eager to understand how that growth can pay off for their businesses, and the creators that depend on them.

Stuart Dredge

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