YouTube has one billion users a month and generated $4 billion in revenue last year. Videos from the Google-owned site are everywhere on the web. But despite being around since 2005, the site has still not turned a profit.
YouTube’s revenue just $1 billion from 2013 to 2014, according to sources for The Wall Street Journal. However, the site did not contribute to Google’s earnings. One source said that it is only breaking even, as it spends money on delivering quick videos and paying for content.
The issue with YouTube is that many people aren’t specifically going there to find videos. Most users are just watching embedded YouTube videos on other sites or clicking on links posted on social networks. In addition, YouTube is still struggling to find a wide audience beyond teenagers.
Soon, YouTube might not even be able to rely on social networks to direct traffic. After all, both Facebook and Twitter allow companies and individual users to post videos directly there. It has also failed to compete with Amazon and Netflix, as it doesn’t have a subscriber service to stream movies or TV shows. You can buy and rent movies on YouTube, but there’s no subscription offered.
YouTube has also failed in its dreams to become a television hub on the Internet. In the past, executives there have paid millions to get professional content producers to create channels, but they didn’t drive traffic. Another effort was made to change the front page to help promote videos. But the channels essentially failed and most YouTube stars haven’t become stars outside of the site.
They are still trying to expand the user base. For example, Billboard notes that YouTube did sign a new deal with the NFL to host content there.
Google has owned YouTube since 2006, spending $1.65 billion. It wasn’t until 2010 that the company began selling skippable ads before popular videos.
screenshot via YouTube Spotlight video