YouTube Tops 20 Million Paying Subscribers, YouTube TV Has Over 2 Million Customers

YouTube Music and YouTube Premium together have more than 20 million paying subscribers, and YouTube TV — Google’s over-the-top subscription TV service — has more than 2 million subscribers in the U.S.

That’s according to Sundar Pichai, CEO of Alphabet and Google, who shared the details on the company’s Q4 earnings call Monday. It’s the first time the company has reported such subscriber numbers.

Google’s YouTube subscriber base gave the video platform a $3 billion annual run rate as of the fourth quarter of 2019 for subscriptions and other non-advertising related revenue, Pichai said.

The new details come after Alphabet, Google’s parent company, also disclosed YouTube ad revenue for the first time.

Alphabet’s announcement of the YouTube subscriber numbers was a signal to investors that the company believes it has more runway to boost subscription-service revenue. Its 22 million paying subs represent just 1% of YouTube’s total 2 billion monthly visitors. On the call, Pichai said Alphabet sees “significantly more room” to grow YouTube’s overall revenue haul, including increasingly through new ecommerce tools and programs.

Regarding YouTube’s subscription business, “it’s still in the early days there” and Alphabet is “making the sizable investment to build it out, taking the long-term view here,” Alphabet and Google CFO Ruth Porat told analysts on the earnings call.

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YouTube had $15.15 billion in ad revenue for 2019, up 36% from the year prior, according to Alphabet. For Q4 2019, YouTube advertising sales were $4.72 billion, a 31% year-over-year increase. YouTube’s ad revenue in 2019 was close to double over the prior to years (vs. 2017 ad revenue of $8.15 billion).

YouTube’s Q4 ad revenue growth was driven by a “substantial” uptick in direct-response advertising and “ongoing healthy growth” in brand advertising (which represents the largest revenue component), according to Porat. She said the company pays the majority of YouTube’s ad revenue to creators.

YouTube Premium, priced at $11.99 per month in the U.S., provides ad-free access to all videos (including music), offline and background playback and early access to YouTube Originals. YouTube Music costs $9.99 monthly for access to songs and music videos without ads (and offline access). YouTube TV, priced at $50 per month (after a rate hike last year), is available only in the U.S. (for now) and offers more than 70 live channels, including local stations, plus cloud-based DVR and other features.

Alphabet’s total cost of revenue (excluding traffic acquisition costs) was $12.5 billion, rising 19% year over year. The biggest factors for the increase were costs for Google’s data centers and content-acquisition costs — primarily for YouTube and mostly for ad-supported content, as well as for YouTube Music, YouTube Premium and YouTube TV, which “have a higher content-acquisition cost as a percentage of their revenues,” Porat said.

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