Google parent company Alphabet has provided a rare update on the performance of its virtual MVPD YouTube TV and other premium subscription services.
During the company’s fourth-quarter earnings call, CEO Sundar Pichai said YouTube TV now has more than 2 million paid subscribers. That reveal likely still puts YouTube TV behind Dish Network’s Sling TV – which ended the third quarter with 2.69 million subscribers – but ahead of AT&T TV Now, which finished 2019 with fewer than one million subscribers after losing another 219,000 subscribers in the fourth quarter.
Pichai also said that YouTube now has more than 20 million music and premium paid subscribers, and that the overall business ended 2019 at a $3 billion annual run rate in YouTube subscriptions and other non-advertising revenues.
The premium subscription figures come as Google is increasing the transparency in its quarterly reporting, and providing glimpses of just how big its YouTube business has grown.
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YouTube ad revenue pushed past $15 billion in 2019 thanks in part to approximately $4.7 billion in revenue during the fourth quarter. YouTube’s ad revenue for 2019 was up substantially over 2018 ($11.15 billion) and 2017 ($8.15 billion).
During the earnings call, Bank of America analyst Justin Post estimated YouTube monetization levels to be about $7 or $8 per user based on 2019 revenue totals and an estimated user base of 2 billion. He asked Pichai if Google sees much room to raise those levels, and Pichai said that both direct response ads and commerce are two big potential growth areas for YouTube.
“So, looking across, I think, there is more room, significantly more room, over the mid- to long-term on monetization levels. And so, I think we see that as a big opportunity and are investing for it,” Pichai said according to a Seeking Alpha transcript.
Google CFO Ruth Porat said the disclosures, which Google is making for the first time, are meant to give investors a clearer window into the business. In the past, Google usually reported consolidated revenues for its multiple business segments. However, Google did not provide operating income information for YouTube or Google Cloud.
“To provide further insight into our business and the opportunities ahead, we’re now disclosing our revenue on a more granular basis, including for Search, YouTube ads and Cloud,” said Porat in a statement.
