Let’s talk about money
21 August 2019
“Don’t talk about money” is a well-loved German saying. Even the Romans agreed: “Pecunia non olet” (“Money doesn’t smell”). But let’s talk about money.
In YouTube’s statement to Forbes magazine about our proposals, they said they share “the majority of revenue” with Creators.
We have a few questions.
Is this more than half of all YouTube’s revenue, or just half of the revenue from ads placed on Creators’ videos?
What would the whole picture look like if we added YouTube’s other revenue streams and payment models, like Premium, Music, and Gaming?
On the other side of the coin, what do YouTube’s expenses look like? Does YouTube make a profit? Are some parts of YouTube wildly profitable and other parts “loss leaders”?
What is YouTube worth?
We aren’t aware of any (public) numbers that would decisively answer these questions. But there are estimates. In 2016, Mark Mahaney, then at the Royal Bank of Canada, estimated that the platform took in around $10 billion of revenue, with about 40% annual growth, according to a story in the Los Angeles Times. But others have published higher estimates, even up to $20 billion.
It would be nice – even for investors – to know for sure. But YouTube’s financial details are hidden in the financial reporting of Alphabet, Google’s parent company. Alphabet’s overall numbers are public. Alphabet’s value has grown tremendously in the past few years, to almost $680 billion.
But the lack of transparency around YouTube’s financials raises questions about the true accuracy of YouTube management’s claim that they share “the majority of the revenue” with Creators. We need real numbers. And not just numbers for the company. Each Creator should be able to see their own numbers: Which videos got which ads? How much income did they get for each ad? These are reasonable details for “partners” to be informed about. But so far, YouTube “partners” – Creators – just get a payout – that YouTube decides. More transparency is needed.