Is YouTube in Financial Trouble?

Joel Eisenberg

The company’s originals division recently closed, and questions have arisen about the long-term health of the venerable video sharing service.

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Author’s Note

This article is free of bias, and is based on national statistics and accredited media reports. All listed facts within this article are fully-attributed to economic and media outlets, including TheWrap.com, TheGuardian.com, Deadline.com, Decider.com, NBC.com, The New York Times, CNBC.com, and BusinessofApps.com.

Introduction

It may be easily forgotten that one of the biggest worldwide television hits of recent years, “Cobra Kai,” aired its first two seasons as a YouTube original before selling to Netflix. For further information, see my January, 2021 NewsBreak article on the “Karate Kid” and “Cobra Kai” mythos here, entitled “‘The Karate Kid’ Resurrected: How ’Cobra Kai’ Became One of the World’s Best-Loved Series.”

However, despite reintroducing the world to iconic martial arts rivals Daniel LaRusso and Johnny Lawrence, and attaining substantial critical and commercial acclaim in the process, YouTube sold the series to Netflix where the viewership is higher than ever. According to TheWrap.com, Season Three began strongly, though not as strongly as other Netflix originals. See here for “‘Cobra Kai’ Season 3 Draws Big Viewership, but Nowhere Near ‘Bridgerton’ or ‘Queen’s Gambit.’”

The article went on to state: Netflix projects 41 million households will watch some of ”Karate Kid“ sequel series’ third season within the first 28 days.

The Guardian reported higher numbers, up to 73 million for just under the first month. See here for
“Cobra Kai: From Dumped YouTube Gambit to Netflix Smash Hit.” It should be noted these numbers rivaled that of “Bridgerton” and “The Queen’s Gambit” during the same period.

During its second week of the current fourth season, estimated viewership has been even higher, at a reported 107.81 million hours according to Deadline.com.

The Deadline piece, entitled “‘Cobra Kai’ Repeats At No. 1 on Netflix’s Weekly Most-Watched TV Shows Chart; ‘The Witcher’ Moves Up All-Time List,” states: The data for the most recent frame was released Tuesday as part of Netflix’s weekly rankings for its film and TV fare, based on hours viewed in a title’s first 28 days on the platform.

But “Cobra Kai” was a hit from the beginning. According to Decider.com, first-day views for the first episode on what was then YouTube’s $9.95 monthly subscription service, YouTube Red, exceeded 5.4 million viewers. See here for “Exclusive: “YouTube Reports 5.4 Million First-Day Views for First Episode of ‘Cobra Kai.’”

Why then, did the video streaming service sell it?

Some have said their other originals were not performing, for one, and “Cobra Kai” was their only real hit which was not deemed enough for a $9.95 monthly subscription. The company seems to disagree with that perspective. See here for January 18, 2022 NBC report, “YouTube Officially Shuts Down Original Content Group.”

Excerpted from the article: When it first started out in originals, YouTube had planned to make a run at the subscription-streaming business. But within a couple of years, it pivoted — and starting in 2018, YouTube killed off its slate of scripted TV series and movies: Several of its projects moved to other outlets: “Cobra Kai” has gone on to Netflix; “On Becoming a God In Central Florida” went to Showtime; and “Step Up” was acquired by Starz. Instead, Daniels and her team shifted to focus on unscripted fare in three different areas: music, celebrity and creator-focused originals, and educational programming. Now YouTube is ending its efforts in those areas, as well.

Let us explore further.

YouTube Financial Report

An archived 2019 article from the New York Times, “YouTube is a Big Business. Just How Big is Anyone’s Guess,” elaborated on the business of the Google-owned company: YouTube probably generates $16 billion to $25 billion in annual revenue, making the video service big enough to crack the top half of the Fortune 500. But that’s just a guess. Even though financial analysts on Wall Street think YouTube makes about as much money as the Gap, General Mills or Netflix, the video service’s financial results are a secret. They are lumped in with the rest of Google, an even larger internet company that last year generated $137 billion in revenue.

Shortly after the Times piece was published, Google began sharing YouTube financials for the first time. See CNBC article here, entitled, “Alphabet Discloses YouTube Ad Revenues of $15.15 Billion, Cloud Revenues of $8.92 Billion for 2019.”

In 2022, BusinessofApps.com published a comprehensive piece on YouTube’s current financials. In their article entitled “YouTube Revenue and Usage Statistics (2022),” all reported numbers have been updated.

Excerpted from the article:

  • YouTube generated $19.7 billion revenue in 2020, a 30.4 percent increase year-on-year
  • Over 2.3 billion people access YouTube once a month
  • YouTube’s most subscribed channel is T-Series, however Ryan’s World generated the most revenue in 2020
  • YouTube Premium reached 30 million subscribers in 2020

YouTube, despite the rumors, is in healthy financial condition.

Conclusion

YouTube was purchased by Google in 2006, and remains safely ensconced as part of its portfolio. Though the video sharing company has pivoted in its business model in recent years, the company’s bottom line appears to have been positively impacted.

Thank you for reading.

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I am an award-winning author, screenwriter for film and television, and producer. My mission on News Break is to share socially important perspectives on both culture and pop-culture. Member of PEN America, and the WGA.

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