Social platform YouTube has reported an 8% drop in ad revenue for Q4, 2022 to $8bn – the result of a downturn in the economy. There was better news in terms of audience metrics, however, with YouTube Shorts recently hitting 50 billion daily views.
The new figure for YouTube Shorts comes just days after the platform switched on monetisation for its short form content ecosystem. Commenting, Google CEO Sundar Pichai said this figure is “up from the 30 billion I announced (in Q1, 2022). This will reward creators and help improve the Shorts experience for everyone”.
Pichai was speaking during an earnings call following the release of Q4 2022 financial results for Alphabet, the parent company of Google and YouTube. Picking out recent YouTube-related highlights, he summarised as follows: “Our subscription business continues to grow, with YouTube Music and Premium surpassing 80 million, including triallers. Together with YouTube Primetime Channels subscriptions and YouTube TV, we have good momentum here. YouTube’s NFL Sunday Ticket will accelerate that by helping to drive subscriptions, bring new viewers to YouTube’s paid and ad-supported experiences and create new opportunities for creators.”
Picking up the story, Philipp Schindler, SVP and chief business officer, Google, said “we’re confident in YouTube’s long-term trajectory.” Digging into the platform’s strategy, he said: “It all starts with the creator ecosystem. Creators are the lifeblood of YouTube. In 2022, more people created content on YouTube than ever before. What sets YouTube apart is that we give creators more ways to create content and connect with fans and more ways to earn money than any other platform. More creators, means more content, means more viewers, which leads to more opportunities for advertisers.”
Schindler said YouTube’s revenue share models “have been structured around ROI for our partners, from Play developers and online publishers to YouTube creators, artists and media orgs around the world. Over the last three years, we’ve contributed more than $200 billion to these key ecosystems. We remain as committed as ever to fuelling the next generation of businesses, media companies, and creativity”.
Going forward, Schindler said the company has four key priorities for YouTube. “First, Shorts. Viewership is growing rapidly. It’s been impressive to see the ways creators use Shorts to introduce their content and extend existing channels. We’re focused on providing creators with the best content creation and monetisation tools; new, richer features; and analytics capabilities that help individualise and optimise their content strategies. It’s early days for Shorts, but we’re confident the runway is long.”
Secondly, he said, “Connected TV, where users are increasingly watching creators on the big screen. According to Nielsen, YouTube is the leader in US streaming watch time. Advertisers are leaning in. With AI powered solutions, we’re helping brands deliver reach and ROI and address pain points like frequency and measurement.”
The third priority is subscription offerings. “It’s clear the future of online video is about helping users seamlessly discover and watch content across ad-supported and premium services. Our goal is to be a one stop shop for multiple types of video content.
Finally, Schindler identified an ambition to create “a shoppable YouTube”. While he acknowledged that it is still early days, he went on to say: “we see lots of potential in making it easier for people to shop from the creators, brands and content they love.” He noted later in the call that Shorts are also shoppable, suggesting that the company is keen to see short form emerge as a gateway to social commerce.
Quizzed about Shorts monetisation, Schindler said: “we are pleased with our progress”, He added: “Closing the gap between Shorts and long-form is a big priority for us; as is continuing to build a great creator and user experience.”
