Google Demands Profitless YouTube: Earn More
Google attracts more than one billion users on YouTube each month. It will be generating huge revenue from the site which it developed into a mainstream video-sharing website with consistent struggle. This is what I believed before I was taken aback by this story by Rolfe Winkler on the WSJ, in which he reveals that YouTube is still a business of no gain for Google.
Last year, YouTube saw an increase in revenue ($3 billion in 2013 to $4 billion in 2014) but that was roughly break-even bottom line. In other words, YouTube’s total contribution in Google’s total top-line was 6%. This unimpressive performance has put a lot of pressure on YouTube to grow audience and maximize earnings.
Despite of the fact that the YouTube is being compelled by Google to increase its audience, its current audience is phenomenal. Then the question is why a site with hundreds of millions of users is unable to make a notable income? Major cause of YouTube’s failure in money matters is the way in which the users make use of the video sharing platform. Most of the videos in the portfolio of YouTube are shared with links from other sites.
To rectify this problem, Google is making earnest efforts. It is making huge investments in its original content creators like Michelle Phan, Bethany Moto, and Epic Rap Battles of History, build their followings and create better videos. The company’s efforts are focused to attract people to YouTube’s homepage; it wants them to visit the homepage directly instead of following links before getting navigated to the site. To this effect, Google has revamped its homepage too.
But “people close to YouTube say the site still struggles to attract users directly, rather than via links,” Winkler reports.
Further Winkler’s sources say that the company is planning to launch more auto-play videos to capture the audience. Auto-play feature works with playlists – playing songs one after another in a specific order.
In a nutshell, Google is looking for some exceptional financial contribution from YouTube, the site which it acquired for $1.65 billion back in 2006. How much successful Google will be in its endeavor? Only the time will decide.