YouTube is one of the most popular video-sharing platforms that allows you to watch, share, upload, rate, comment on videos, and subscribe to other video channels of other users. You can get an idea of the popularity of YouTube by the fact that every minute hundred of videos are uploaded on YouTube. Moreover, every single day five billion videos are watched on YouTube, and around 30 million visitors visit YouTube per day.
When we think of YouTube, several questions come to mind, like how YouTube makes money? Or does YouTube make a profit? Or where does YouTube get the money? If all these questions often come in your mind, then you are in the right place. We have answers to all your questions.
YouTube was started as a dating website in February 2005 by Steve Chen, Jawed Karim, and Chad Hurley. At the present time, it is the largest video sharing website of the world and the second-largest search engine on the world wide web. It is available in 76 different languages and not only used by individuals, but is also used by celebrities, big brands, and many other influencers who use the platform to promote themselves and earn money through it.
How YouTube Works?
YouTube is a Google-owned website, and it allows users to upload and share videos. It also allows users to subscribe to the video channels of other users. You do not have to pay anything to watch videos on YouTube. YouTube also renders a specialized platform to the users for music and games. Now you must be thinking how such a type of platform earns money on which the content is free to access.
Business Model of YouTube
As mentioned earlier, the content present on YouTube is free to access. You are allowed to watch millions of videos without any charge. The actual product in the business model of YouTube is its users. The business model is based on earning profit through advertisement.
Every month, YouTube pulls around 1.8 million users. The activities of users on YouTube and other websites are recorded by Google, and then it combines the activities to their profiles in order to assist the advertisers in running target advertising campaigns on Youtube.
The other model that is used by YouTube to make money is based on subscriptions for YouTube Premium. The channel offers specific benefits to the subscribers by charging normal membership fees. The membership renders access to the users for different movies and web series that could only be watched by premium membership owners.
How YouTube Makes Money?
Most of the revenue is earned by YouTube from advertisements. The company is slowly adopting the subscription-based business model, but advertisement still remains the secondary source for earning revenue. Below mentioned are some of the ways through which YouTube earns money.
Embedded advertisements are one of the best advertisement revenue streams. Varied advertisements are embedded in a wide range of YouTube videos. These advertisements are players before the beginning of the actual videos. In addition to these, small advertisements are also embedded between the videos, which also contribute to YouTube profit.
In this case, the revenue generated by the company is based on the number of views that are attained by the ads. A specific amount of that fee attained through this add is paid to the creator of the video.
Sponsored videos are another way through which YouTube makes money. You can see sponsored ads at the top of a page on YouTube.These sponsored videos are paid ads, and the advertisers make payment to YouTube on the basis of the number of views that an ad gets. It is also known as SERP advertising. In the world of digital advertising, sponsored videos are growing at a rapid pace as they help the advertisers in reaching new demographics by means of sponsoring content from trusted influencers. Sponsored ads make a remarkable contribution to YouTube profit.
YouTube Affiliate marketing, affiliate links are placed in the actual videos or in the description of videos. The main intent of these links is to redirect traffic on the landing page of the affiliate.
Many videos on YouTube show advertisements for related products. These products are associated with affiliate partners who pay a fee to YouTube if someone buys these products.
The revenue sources of YouTube are not limited to advertisements. The features of channel memberships and sponsorships allow the publishers to engage adequately with their fans and earn remarkably from Youtube. The feature allows the Youtube partners to add a “Join” button on their Youtube channel and pages of videos. This feature allows the partners to offer special advantages like discounts, merchandise and offers on official products to the subscribers who pay the subscription fee. Youtube keeps a specific amount of subscription fees paid by users.
Due to the increasing popularity of subscription-based models like Netflix, YouTube has also introduced its subscription-based revenue model known as YouTube Premium. The subscription to YouTube premium renders you an uninterrupted and enhanced experience across YouTube Music, YouTube Gaming, and YouTube. Below mentioned are some of the benefits of YouTube Premium membership.
- Access to Youtube Music
- Access to exclusive content present on Youtube.
- Ad-free videos.
- Offline songs and videos.
- Allows you to play background music while using another app or when the screen of your phone is off.
Youtube TV is an exclusive US-based live TV streaming service that allows subscribers to watch channels like Disney, ESPN, NBC, FOX, and any more on YouTube. This service is based on subscription and is growing at a rapid pace.
YouTube TV has more than a million users and makes remarkable contributions to the revenue model of Youtube. The service is rendered at a specific price and allows the users to stream from around 70 networks. Nevertheless, there are certain premium channels that can only be subscribed by paying an additional fee. The best part about YoutubeTv is that it can be streamed on any device.
Above mentioned are some of the ways through which YouTube makes money. I hope the article is helpful to you, and now that you know how YouTube makes money, please let us know about your views on the article through your comments.