Why is YouTube Not Returning Profit?
YouTube has become a cultural staple when it comes to streaming music, interviews and in some cases, TV shows and clips. You’d think that business would be booming with a reported one billion active monthly users and $4 billion in revenue.
That thought, however, would be inaccurate.
In a report conducted by the Wall Street Journal, Youtube, which was acquired by Google for $1.65 million, saw a growth in revenue from 2013-2014 that accounted for six percent of Google’s overall sales, but the percentage did not contribute to earnings.
A Google representative told Business Insider, “a vast majority of its traffic comes from the homepage or its mobile apps.”
With embed access and social media sharing availability, visitors do not necessarily have to type in “YouTube.com” to get the content they’re searching for. Now, content can be accessed right on a website’s page and shared easily with just the click of a button. This cuts out the gain of direct visitors.
In turn, leading the site to only break-even in returned revenue.
Initially the creators of the streaming service wanted YouTube to become the TV-alternative — the content you want, when you want it, additionally providing multiple channels of entertainment.
Not giving up the fight, YouTube is looking for ways to up revenue. WSJ reports that the company plans to introduce a new way to target Google ads.