YouTube is massive, both in popularity and in the amount of videos one has access to when visiting the website. Whether you’re looking for streaming content on your favorite cooking recipes, reviews on the latest tech products, walkthroughs and reviews for games, or just some good old fashioned fail videos, YouTube likely has it, and you can stream it anytime you want so long as you have an internet connection handy. With all of this available content at one’s fingertips, YouTube pulls in roughly around 1 billion monthly subscribers, which is quite a lot to say the least. All of those subscribers though still fail to allow YouTube to earn a profit for Google.
According to a report from The Wall Street Journal who sites sources familiar with the matter, YouTube earned about $4 billion in revenue in 2014, but even with all that cash they barely broke even and left virtually nothing in regards to profit to be gained. Some of it can be attributed to the costs that Google incurred to run YouTube, which includes the equipment they purchased for keeping video streaming at a fast pace as well as the cost of content that they had to pay for. This is leading YouTube to change up the way they deliver targeted ads, as the sources state YouTube will be coming up with and launching a new ad-targeting campaign later on in 2015.
So far there aren’t any specifics that tell us what the campaign will consist of, but whatever it is YouTube will surely be doing plenty of research as they want to try and turn a profit for the year going forward. Breaking even is still better than losing profit however, and YouTube still managed to raise their overall revenue in 2014 from the roughly $3 billion in 2013. Still, Google, like all companies, are in the business of making money and they want YouTube to be a part of their services that brings in earnings. YouTube also faces some competition in the video sharing space as Facebook and Twitter are both looking into video content sharing services of their own, which could potentially snag content providers as well as subscribers from YouTube. Another part of the reason YouTube struggles to make a profit is because it’s largest audience are those of a younger generation, and broadening their reach to bring in older viewers is something they need to strive for. The way YouTube targets ads is of course another reason according to executives why the video sharing service doesn’t bring in earnings, and the reason for why they’re exploring a new ad campaign.