YouTube Nears Major Milestone Amid Emphasis on Subscriptions

February 5, 2019, 1:44 AM UTC

YouTube has reached a new milestone of nearly 2 billion monthly logged-in users, reflecting its still-growing popularity and its money-making potential.

Google CEO Sundar Pichai described YouTube on Monday as a key contributor to the company’s rise in fourth quarter revenue without offering any details about the video service’s financial contribution.

By pure numbers, viewership rose modestly from 1.9 billion monthly users in the previous quarter. But more importantly, the huge pool of users gives Google, and its parent company, Alphabet, a large audience to whom it can push YouTube’s growing subscription services.

Those are YouTube Music, the YouTube Premium service that comes without ads and allows for downloading videos for offline watching, and YouTube TV, a replacement for cable TV that is now available to 98% of U.S. households.

“We’re committed to making sure there is a premium experience,” Pichai said during Alphabet’s fourth quarter earnings call.

But as YouTube grows, its leaders continue to face challenges with controlling misinformation. Earlier this year, they said they would try to recommend fewer videos that contain misinformation—groups in Russia reportedly made more than 1,000 such videos during the 2016 U.S. presidential election—and conspiracy theories after being slammed for doing just that.

Pichai didn’t mention any of that on Monday, although YouTube has promised to do a better job of policing its service. Instead, he doubled down on YouTube as a video version of Google.

“YouTube is a place where we see users not only come for entertainment, they come to find information,” he said on Monday. “They’re coming to learn about things. They’re coming to discover research.”

While YouTube ad sales continues to grow at a “strong pace,” according to Google, the cost of adding video content is rising. Google’s CFO Ruth Porat attributed the increasing costs to a rise in demand for professional content and video for its newer services, YouTube Premium and YouTube TV.

YouTube TV is a bundle of dozens of local and premium channels that is an effort to appeal to cord cutters, people who abandon their cable television packages for streaming services. Executives did not say how many subscribers YouTube TV has added since it premiered with a limited footprint in April 2017.

Other interesting, yet mostly vague, information revealed on Monday included that number of YouTube channels with more than 1 million subscribers doubled in the last year. Additionally, the number of content creators earning between $10,000 to $1 million grew more than 40% compared to a year earlier.

Overall, Alphabet said it that had $39.32 billion in fourth-quarter revenue and $12.77 per-share profit, beating analysts’ expectations. Analysts had expected the company to report $38.89 billion in revenue.

Alphabet’s shares fell 3% in after-hours trading to $1,141.42 per share.

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