Youtube has 2 revenue streams, Ads and Premium content (Youtube Red, TV, etc.)
Since Youtube is the number one video hosting and sharing service in the world, they have built their main revenue stream around advertising. With their large amount of user data, tailoring advertisments to specific searchs or user communities seems like a no brainer. And this revenue stream is strictly from businesses / creators.
However, Youtube has recently built a new sub-product “Youtube TV”. Since Youtube is so integrated into many devices and has penetrated a majority of screen time entertainment, they decided to enter the “TV streaming” service with competitors like Hulu, HBO max, Paramount +, and more. This is a subscription based service that daily Youtube consumers would purchase.
These 2 revenue are largely different in 2 ways: first, one focuses on monetizing business with advertisements and the other is targeting everyday users of Youtube as an entertainment service. The second difference is the size of each of these revenue streams. Advertising makes up nearly 70% of all of Youtube’s revenue and because of the growing competition in the red ocean that is TV streaming, Youtub TV’s revenue stream is not nearly as large.
I think the TV revenue stream is less about making money, but growing Youtube’s dominance in the screen entertainment space.
