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A Look Behind the Scenes at YouTube

Posted by Andre' Savoie on Jul 28, 2014 9:34:31 AM

If I asked you to list the top five websites in the entire world, chances are you’d probably get pretty close, even if you don’t often check in on that stat.

You’d say Google, of course.

Facebook would probably make the list.

Chances are YouTube would get included as well.

And you’d be right.

youtube

YouTube is consistently within the top five most visited sites not just in the US, but on the entire planet. However, The Information recently published a report (subscription required) that calls into question how long the website will be able to hold onto that distinction (or how much it’s even worth, for that matter).

Key Metric for YouTube - Viewing Hours per Day

One of the metrics the report highlights is how many hours of video are watched on YouTube per day. The company has its own internal-goal and, being a division of Google, it’s more than just ambitious.

By 2016, YouTube hopes to have hit a billion hours of video watched every single day.

No need to refresh your browser…yes that’s 1 BILLION hours of video each day.

youtube2016

Currently, the number sits below 300 million. While, that’s apparently up from just 100 million back in 2012, the site still needs to put some aggressive strategies into play if it wants to add another 700 million in less than 2 ½ years.

The Need to Grow Gross Revenues

Another metric that got attention in the report is YouTube’s gross revenue. In 2013, the website reportedly brought in $3.5 billion. That’s no small number, of course, but it was about $1.5 billion short of where many financial analysts thought they would be.

Nonetheless, YouTube is apparently still turning a profit, despite handing over 55% of its revenue to “content creators” (the company flat out pays some of its more popular users to continue uploading videos as this brings in views).

Future Tactics

Obviously, some things need to change if YouTube wants to keep growing. One thing they’ve already done is bring in Susan Wojcicki. Previously, Wojcicki handled advertisements for Google. However, her new job title is CEO. Although she’ll oversee all of YouTube, her main focus is said to be accelerating the company’s revenue growth.

We’re not talking by modest amounts either. According to The Information, her goal is to get the website up to tens of billions of dollars a year.

Another change that could give YouTube the help it needs is a streaming music service that was actually scheduled to launch this past year. Due to issues with rights and various internal disputes (depending on whom you ask), the service was delayed. However, given the popularity of streaming music and the website’s relationship to the industry, this could provide an impressive boon to the company’s profits.

Serious Competition

Aside from new sources of revenue, YouTube also needs to be concerned about some serious competition that has proven it’s more than game for going head-to-head with the media giant.

While it’s impressive that YouTube’s numbers often exceed those of traditional television, that number hasn’t proven to mean much. At least, it doesn’t provide the potential returns YouTube could be seeing if it had “branded” content. Netflix and Hulu both have this. Google Play does too, but it exists outside of YouTube.

Plus, there’s even more competition for people’s attention spans when you consider Facebook, Twitter, Pinterest, Vine and other companies that continue to grow and figure out ways to get people to show up and stay for long periods of time.

When Google acquired YouTube in 2006 for $1.65 billion, it was largely seen as a play to bring in advertising dollars on a television channel’s level. While the site has been successful in attracting eyeballs, it’s fallen short of turning that patronage into profits. Though it’s certainly far too early to call for the curtain, it’s clear that YouTube has a lot of work to do if the company still plans on keeping living up to that promise.

Sources:

 

Topics: social media, You Tube

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