WSJ: ‘YouTube: 1 Billion Viewers, No Profit’

Rolfe Winkler, reporting for the WSJ:

The online-video unit posted revenue of about $4 billion in 2014, up from $3 billion a year earlier, according to two people familiar with its financials, as advertiser-friendly moves enticed some big brands to spend more. But while YouTube accounted for about 6% of Google’s overall sales last year, it didn’t contribute to earnings. After paying for content, and the equipment to deliver speedy videos, YouTube’s bottom line is “roughly break-even,” according to a person with knowledge of the figure.

Shows just how hard it is to make money from a “give something valuable away for free” model, even at YouTube’s massive scale and with Google’s advertising expertise.

★ Thursday, 26 February 2015