YouTube ad revenue dropped 2.5% YoY in Q1, but paid subscription sales increased 9%
The global digital advertising slowdown in 2022 continues to be a drag on YouTubead revenue for the first quarter of 2023 (ends March 31).
However, YouTube’s parent company Alphabet has seen significant growth in subscriber numbers during this period – including its music streaming service, YouTube Music.
In its latest earnings report, released on Tuesday (April 25), Alphabet reported YouTube ad revenue of 6.69 billion USDdown 2.5% annually from the first quarter of 2022, when revenue reached 6.87 billion USD.
This is the third consecutive quarter of a year-over-year decline in YouTube ad revenue, although this quarter’s numbers flap Analysts’ expectations about $6.6 billioncompiled by FactSet.
The most recent was a year ago – ie Q1 2022 – Alphabet reported YouTube ad revenue grows double digits.
However, while YouTube lost ad revenue in Q1 2023, YouTube earned revenue from paid subscriptions.
Alphabet of “Google Other categories”, including YouTube TV, YouTube Music and YouTube Premium, saw revenue increase 9% annuallyfrom 6.81 billion USD in Q1 2022 to 7.41 billion USD in the first quarter of 2023.
“We are pleased with the significant subscriber growth that is taking place in both YouTube Music Premium and YouTube TV,” Alphabet Chief Financial Officer Ruth Porat said on Tuesday’s Alphabet earnings call.
She added that YouTube “saw signs of stabilizing in ad spend” during the quarter, a phrase repeated by other Alphabet executives during the call, though without a detailed explanation. .
YouTube Music and YouTube Premium subscriptions obtain 80 million at the end of last year, up 30 million from just 13 months earlier. Alphabet hasn’t released any updated subscriber figures in its latest earnings report.
“More than 100,000 creators, artists, and brands have connected their own stores to their YouTube channels to sell their products. We are excited about the potential ahead.”
Phillip Schindler, Alphabet
Aside from the success of its subscriber-driven model, Alphabet is looking to monetize YouTube in other ways, including through YouTube Shopping, which allows content creators to promote their own products or stores. them through video and live streaming.
“Last year, we brought shopping to more creators and brands by partnering with commerce platforms like Shopify,” said Alphabet Senior Vice President and Chief Business Officer, Phillip Schindler, said during the earnings call.
“Now more than 100,000 won Creators, artists and brands have connected their own stores to YouTube channels to sell their products. We’re excited about the potential ahead,” he said, adding that it’s “still very early” for YouTube Shopping.
YouTube has also put a strong focus on “Shorts,” videos that are less than one minute in length that push creators into production. It’s a move that many observers see as YouTube’s response to the growing popularity of short-video platform TikTok.
Porat said on Tuesday’s call, Alphabet is “encouraged by Shorts’ monetization progress.”
The decline in worldwide advertising revenue, which analysts have struggle to explainholding in the second half of 2022 and many market experts today say they did not see the recovery happen This year.
Despite the drop in ad revenue, Alphabet overall posted upbeat numbers for Q1. beat analysts’ expectations. Net income for the quarter was at $1.17 per share, beating expectations of $1.07 per share. Revenue comes at 69.79 billion USDOne 3% annually increase and return 1 billion USD more than analysts had predicted.
Former YouTube CEO Susan Wojcicki left the company in February and was succeeded by Neal Mohan, who was previously YouTube’s chief product officer.Global Music Business