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Used VPN for cheaper YouTube Premium? Congrats, your subscription has been canceled
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this post was submitted on 19 Jun 2024
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It's not a pure monopoly by choice. While it's true Youtube has a monopoly in terms of number of creators, viewers and content, it's still not a profitable venture. I heard it was burning through money to keep up with the sheer amount of content they have to deal with. Youtube is doing all this monetization now because they have ran out of VC money and upper management decided that it needs to be self-sustaining. Even the obscene amount of data Alphabet is gathering from Youtube does not create enough revenue to generate profit. But it's a "too-big-to-fail" product now so Alphabet will continue to invest. Competitors saw all of this and just noped out.
Other commercial video services, like Nebula, have popped up but they are subscription-oriented right from the get-go, like Netflix. This means they have a very small audience and it will take years to build up an audience like Youtube. So I don't see them growing, at least in the near future.
This very much feels like disloyal competition. If you burn through your money in the hopes of sweeping out the competitors, and then you have to dial back on your competitor's practices, it's a dead giveaway you've done something fishy
Yup, but that is quite literally the name of the game in Silicon Valley.
You know YouTube is owned by Google, not VC firms right?
Big companies sometimes keep a division / subsidiary less profitable for a time for a strategic reason, and then tighten the screws.
They generally only do this if they believe it will eventually be profitable over the long term (or support another part of the strategy so it is profitable overall). Otherwise they would have sold / shut it down earlier - the plan is always going to be to profitable.
However, while an unprofitable business always means either a plan to tighten screws, or to sell it / shut it down, tightening screws doesn't mean it is unprofitable. They always want to be more profitable, even if they already are.
Source? My understanding is that Google doesn’t publish Youtube’s expenses directly but that Youtube has been responsible for 10% of Google’s revenue for the past few years (on the order of $31.5 Billion in 2023) and that it’s more likely than not profitable when looked at in isolation.